btwea and forming a limited company

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fortuna

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Hi, first post so if I am in the wrong forum, I apologise.

I want to set up an ltd company, and have been advised that since I am on jobseekers allowance I should apply for btwea, this would be very helpful financially, however I have concerns if I need to employ myself to access funds from the company that the btwea will be cancelled, any advice would be helpful, thank you.
 
I receive the btwea and I've never been asked about other earnings...The money is just paid in to my account every week. I think that when I do my tax return that the btwea is taxable income.
 
Thanks January, how long does the process take from interview to when your approved (or not). Also how much detailed is needed. I intend to offer off shore technical support, I have customers sourced in the UK. Do they require detailed projections of turnover, costs etc. This is starting on a shoestring but it has a lot of growth potential.
 
I assisted one friend with this. The process is go to your local employment office and they will refer you to your local enterprise board. They will give a template of a business plan and this will need to be completed. It is the enterprise board that signs off on your plan and once this is done your jobseekers benefit will move to short term enterprise allowance.

The issue of whether you can be employed and receive stea is that you can't. If you are in receipt of salary (even from your own company) then your stea technically stops. Is there any way you can start off as a sole trader and transfer your trade to a company afterwards? Even if you start off with a company and take no earnings from it while your stea is being paid you may be okay. I know that my friend did ask above taking a salary from his own company and hit a brick wall. If you can even leave enough income outside the company, as a sole trade, this may assist. You will see when you do your business plan that the it assumes the income accrues to you and not a company owned by you.

As I suggested to my friend you can alway argue that director's fees are different from salary - this may be fine with the Revenue (who may understand the distinction) but for Social Welfare you would be bringing unnecessary attention on yourself and the stea may not be granted.

Best of luck but worth the effort. You can get your stea and earn money also.
 
Thanks for the advice dublin66, I hope all goes well for your friend. It's hard to understand their rationale. I wonder if it's allowable to set up as a sole trader as well, and then invoice the company for other services?
 
There is can always be a tax issue with invoicing a company as a sole trader, especially one controlled by you, if this is your only source of income. If you are invoicing twenty (for example) different businesses, including your own, for services there should be no problem.

However if it is your sole source of income then you may be considered an employee of the company. In this event Revenue, if you have a tax audit, would most likely consider that payments from the company were salary and PAYE/USC/PRSI should have been deducted by the company. Be careful on this one. No point in solving one problem and running into another one.
 
dublin66 said:
There is can always be a tax issue with invoicing a company as a sole trader, especially one controlled by you, if this is your only source of income. If you are invoicing twenty (for example) different businesses, including your own, for services there should be no problem.

However if it is your sole source of income then you may be considered an employee of the company. In this event Revenue, if you have a tax audit, would most likely consider that payments from the company were salary and PAYE/USC/PRSI should have been deducted by the company. Be careful on this one. No point in solving one problem and running into another one.
Click to expand...

Thanks dublin66, I took your advice and registered as a sole trader, and they seem happy to sign off on it when my tax reg comes through. When finances are more stable I will probably incorporate. It's a shame that this is such a grey area at the moment, but hopefully in the future it will be addressed. (sorry for delayed reply:eek:)
 
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