Note: For comprehensive coverage of this area benefits see also our "HB For Self Employed Claimants" Workshop.
Thursday, 21st October, 2021.
Kingsley Holborn Thistle Hotel, Bloomsbury,
City Centre Venue. (Near British Museum)
Workshop Fee: £285 + VAT. 4th Place Free on same date & venue.
HOUSING BENEFIT FOR SMALL BUSINESS POWNERS (COMPANY DIRECTORS)
(PROGRAMME CURRENTLY UNDER REVIEW)
One of our most asked about areas of Housing Benefit has been how to gain an understanding of the financial issues of “small companies”, and how to calculate income and capital for claimants who work for a company in which they own a significant shareholding – namely people who have set up their own ‘limited company’ that is often just a small business enterprise run from home. This Workshop is specifically aimed at those people who need to look looks in detail at the issues involved when assessing or advising on housing benefit claims from people who set up their small business and become ‘company directors’.
A Workshop where we will consider a topic that is generating an increasing number of questions and discussions - How to assess the income and capital of the owner of a small private company. With more and more people deciding to work for themselves and set up their own small businesses, benefits decision makers and advisers/representatives are finding that they need to clearly understand how benefits apply to small private company owners in order to give knowledgeable and appropriate advice – including, for example, to claimants who work in building trades, market trading, internet businesses, etc.
We begin the day by establishing exactly what it means to be a company owner and in particular how this business model differs from self-employment. The pack includes a helpful glossary providing simple definitions of some of the concepts and terminology associated with small private companies:
• Why are the shares only valued at 1p each? And why are there 1000 x 1p shares – what’s wrong with having one £10 share?
• What are the different kinds of shares: “ordinary” shares, “preference” shares, “management” shares?
• Do the Directors always own the company?
• What are the “Articles of Association” and the “Memorandum of Association”?
• An increasing number of questions are being asked about ‘franchises’. For example, what is the situation if the claimant’s company operates a branch of, say, ‘Subway'.
When assessing HB for a company owner there are two principal matters for the Council to establish: How much earned income does the claimant get from his/her company? And what is the capital value of the claimant’s shareholding? The second half of the morning deals with capital:
• What methods are available to establish the value of a private company with no publicly quoted share price?
• Tangible assets, intangible assets and “good will”;
• Sometimes a company owner doesn’t seem to be a lot different from a self-employed person. The HB Regulations cater for this: When should that rule be invoked so that a company owner’s capital is assessed as if s/he were self-employed?
In the afternoon sessions we turn our attention to the income earned by company owners:
• If the claimant receives dividends as a shareholder, how are these payments treated?
• What if the claimant draws a low salary but the company makes a substantial profit and pays significant dividends?
• How do we deal with accounting devices designed to minimise tax liability, such as employing a spouse who does not draw his/her full salary?
• What do all the numbers and technical terms in the company’s accounts mean?
We round off the day with a couple of issues that crop up regularly:
• How do we deal with the director’s loan account or current account: A running tally of money owed by the company to the claimant, or owed to the company by the claimant?
• Rent agreements between the claimant and his/her company: Perhaps the claimant rents a flat from the company, or maybe s/he rents a shop or office to the company.
• Umbrella companies - what if the claimant receives his/her earings through an umbrella company?
This Workshop is designed to look specifically at benefits for “Directors of Small Limited Companies”. For a complete understanding of all the Housing Benefit issues affecting people who run their own business we recommend that delegates attend our separate Full Day Workshop on “Benefits For The Self-Employed” as well (for claimants that do not set up a limited company (i.e. Sole Traders), often in trades such as child minders, mobile hairdressers, taxi drivers, window cleaners, etc.)
9.30 Arrivals and coffee/tea
9.45 Introductions and course overview
11.15 Coffee/tea break
1:00 Lunch break
3.15 Tea/coffee break
4.30 Workshop ends
Contact us for In-House & 'Zoom' booking information for this topic.
We are always pleased to arrange most of our Workshops, such as this one, for staff from an individual organisation to be held at their own training venue. Please email us with your requirements for details.
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