Boyfriend made me director ector of Ltd company but on universal credit please help!

[Madmaria69]

Hi I hope you can help this is advice for a friend not me personally but I can not advise her as I have no clue about these things but I feel do sorry for her as she is so worried. She lives with her boyfriend in a house she owns with their 2 young children. She is self employed and submits full accounts to hmrc but has recently come off maternity leave and has been getting universal credit. During the past 6 months her boyfriends company went bankrupt and with advice from his a accountant was advised to set up another company with his girlfriend as sole director with 100 percent of the shares. She is panicking now because she was told by this accountant that as long as she doesn't take any wage from this company it won't affect her universal credit and no need to worry about her. But she is worried can anyone shed any light on this confusion for her she is worried she is going to end up with a huge tax bill for money she hasn't had and puy in prison for tax evasion. I was under the impression that anyone could be a company director in name only without it affecting anything as long as you don't take a wage. But she has been told by other people that isn't correct . Please help she has got into this thinking she was being helpful and if she end up in trouble it is not fair as she struggles to make ends meet and works really hard to make ends meet and look after her children
please help thankyou

[echat11]

I have no doubt that members here has that knowledge in part or as a whole.
But you can get free advice from some solicitors, 1/2 free.

I'm not suggesting you contact the following, but you contact them or others as they encompass Tax, accountancy etc.

https://tmsterling.co.uk/tax-problem...or-accountant/

[Beancounter9]

Im not an expert on UC so cant advise on the implications of owning an asset (the shares) or holding an income-free directorship.

However i can say that it is unlikely that your friend truly has no income. If she is the sole director, and 100% shareholder, then any dividends taken from the company will count as taxable income for her. So, if her boyfriend is running this business and earning money (and more importantly drawing that money out) then the only way to cover those drawn amounts is by loan, salary, or dividend - to someone.

The only way i see to avoid you friend being the recipient of that income is if she sets up a PAYE scheme and employs her boyfriend - so all the money taken is covered by his salary.

As for being a director 'in name only' she is the sole officer of the company and bears huge personal responsibility to the company, its shareholders (ok that's her) and any creditors who may be left unpaid.

Personally i wouldn't advise a client to front a business in order that their partner could act as a shadow director - and that appears to be effectively what may be happening here. As such, your friend should consider whether this accountant is the right one for her.

[Okusentakag]

Since you agreed to pay it to you now, you didn’t have to believe him. In fact, according to the documents, you took it so that you don’t talk now, but no one forced you to do this

[Sam101]

A Director is responsible for the company and it'd dealings. The accountant does seem to want you to try and get round the law and possibly deceive the government. I believe that you should be very careful and not do anything someone else suggests until you have made sure it is legal, correct and will not affect you badly in the future. The advice given by others should be taken seriously.

[Madmaria69]

I know this is a late response but I wanted to thankyou all for your advice she has sorted it out now and is no longer a director of that company. I think when I told her how serious it was she acted on the advice you gave . Thankyou to all of you

[atticus]

Good. I was not here when you originally posted, but I have no doubt that in getting out of this your friend has done the right thing.