Value of a company

Currently, there are 0 users and 1 guest visiting this topic.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • #31898
    Anonymous
    Guest

    We have a claim where the clt (along with his missus) own a Ltd business company outright. The annual profit is quite substantial but the clt is only paying himself peanuts. The profit is being left in the business and he is not taking dividends.

    We think he is deliberately paying himself peanuts so as to get HB. In effect by paying peanuts the HB scheme are effectively subsidising his business as he doesn’t have to take a reasonable wage to pay his rent.

    I believe there are people out there who, if the business was put up for sale, who would buy the business. Therefore he has a capital asset??

    My question – can a saleable business be capital? If so, what reg covers this?

    Cheers in advance.

    #89194
    Kay_Tade
    Participant

    If you are treating him as an employee then the whole of the business is his capital……am I missing something here?

    #89195
    Anonymous
    Guest

    Thanks Kay.

    I’ve always understood matters to be that as the company is a seperate legal entity to him then any assets.profits belong to the company, not it’s employees. Even though he’s a director he’s also an employee.

    #89196
    Kay_Tade
    Participant

    See Peterb’s excellent explanation here.

    https://hbinfo.org/forum/viewtopic.php?t=18844&highlight=company+assets+director

    Yes the employee is a separate entity but as peter says you can’t have your cake and eat it. The fact he is not treated/deemed as self-employed means the business is his capital, as he also owns the company.

Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.