Terms & Conditions

[Anonymous]

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.

[Kay_Tade]

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

[Anonymous]

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.

[Kay_Tade]

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.

[Author]

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