Company liquidation. NI fond = public funds ?

[AlexStiva]

I have a strong feeling, the company where I work may become liquidated soon ..not to mention I haven't been paid salary for 2 months there because of the tough financial situation.

My question is, - in the worst case, when the company won't be able to pay the monies it owes me, then, as I know, there is a compensation from National Insurance fund (btw limited to £290 pw, which is twice less than I earn).

Am I eligible to receive this money , as an HSMP visa holder ?


If anyone had the same situation, any input and advice will be much appreciated, tahnks.

[John]

Am I eligible to receive this money , as an HSMP visa holder ?

Yes you are. It needs to be appreciated that the "No recourse to Public Funds" restriction on the visa stops you getting, err .... Public Funds .... as defined by para 6 of the Immigration Rules.

That definition contains only a limited list of benefits, and OK some important ones like Income Support, but no way does it stop claims for all types of possible benefits from the UK Government.

You can receive that compensation without having any effect upon your immigration status.

[vin123]

Hi Alex

Effectively two ways you can deal with it.

- via normal National Insurance (£290 pw) claim as described

- When your company is liquidated they receive tax-free sums from the govt as per the DTI trading norms and regulations to pay off wages that are due - this depends on a lot on other ‘parameters’ the company tax accountants work out - normally in favour of their 'bosses'. What ever be the case, if you were taking £590 pw, from a personal tax point, you can account the lost £290pw when you do your self-assessment.

whic means, the cost involved for you do the job is £580pw and you were only given claim of £290 from NI funds. So effectively you claim £290pw tax-free for the rest of employment term shown in the P60's financial year.

Hope this helps

I have a strong feeling, the company where I work may become liquidated soon ..not to mention I haven't been paid salary for 2 months there because of the tough financial situation.

My question is, - in the worst case, when the company won't be able to pay the monies it owes me, then, as I know, there is a compensation from National Insurance fund (btw limited to £290 pw, which is twice less than I earn).

Am I eligible to receive this money , as an HSMP visa holder ?


If anyone had the same situation, any input and advice will be much appreciated, tahnks.

[AlexStiva]

Am I eligible to receive this money , as an HSMP visa holder ?

Yes you are. It needs to be appreciated that the "No recourse to Public Funds" restriction on the visa stops you getting, err .... Public Funds .... as defined by para 6 of the Immigration Rules.

Great, thanks ) I was confused by my friend's confidence in that ..

btw, I found that one is eligible for Job Seaker Allowance if he has contributed to NI fund above some level at the time he loses his job, didn't knew it before ..

The Jobseekers' Allowance is divided into income-based JSA and contributions-based JSA. Only income based JSA is listed as a public fund in the Immigration Rules. Claimants who have made the appropriate level of National Insurance (NI) contributions may receive contribution based JSA for the first 6 months of any claim.

[John]

Alex, that is totally right, Public Funds are defined as :-

"public funds" means

(a) housing under Part VI or VII of the Housing Act 1996 and under Part II of the Housing Act 1985, Part I or II of the Housing (Scotland) Act 1987, Part II of the Housing (Northern Ireland) Order 1981 or Part II of the Housing (Northern Ireland) Order 1988;

(b) attendance allowance, severe disablement allowance, carer's allowance and disability living allowance under Part III of the Social Security Contribution and Benefits Act 1992;, income support, council tax benefit and housing benefit under Part VII of that Act; a social fund payment under Part VIII of that Act; child benefit under Part IX of that Act; income based jobseeker's allowance under the Jobseekers Act 1995, state pension credit under the State Pension Credit Act 2002; or child tax credit and working tax credit under Part 1 of the Tax Credits Act 2002.

(c) attendance allowance, severe disablement allowance, carer's allowance and disability living allowance under Part III of the Social Security Contribution and Benefits (Northern Ireland) Act 1992;, income support, council tax benefit, housing benefit under Part VII of that Act; a social fund payment under Part VIII of that Act; child benefit under Part IX of that Act; or income based jobseeker's allowance under the Jobseekers (Northern Ireland) Order 1995.

(my emphasis)

[AlexStiva]

the cost involved for you do the job is £580pw and you were only given claim of £290 from NI funds. So effectively you claim £290pw tax-free for the rest of employment term shown in the P60's financial year.

Thanks, vin123.

Sorry, does the statement above means that, according to the example, for two months I get 2x4.5x£290 = £2610 as a lump sum, and then if I earn, e.g. £600pw on the new job, taxation is not applied to £290 from this amount ?

That's a bit confusing, firstly 290 is a net amount, and secondly 290 is ta-free amount, which isn't the same. I would understand that if during my next employment I was getting 600 tax-free up to 290 of tax equivalent ..

Sorry, accounting isn't my strongest skill, If you could clarify that or point me out to the source of this information that would be much appreciated.

Anyway thanks for giving hope to me.

[John]

So effectively you claim £290pw tax-free for the rest of employment term shown in the P60's financial year.

Sorry, why are you suggesting that any amount is tax free? Don't understand!

[vin123]

If an individual is on salaried job, is it safe to assume that the cost involved for him to do the job equals his full salary - but as you see, its not matched here.
If so, I meant, £290 remaining as cost incurred which could be claimed backed from the Revenue for that financial year during self assesment.

So effectively you claim £290pw tax-free for the rest of employment term shown in the P60's financial year.

Sorry, why are you suggesting that any amount is tax free? Don't understand!

[John]

If so, I meant, £290 remaining as cost incurred which could be claimed backed from the Revenue for that financial year during self assessment.

As a Tax Consultant, I still have not got a clue what you are talking about.

Clearly if he is earning less then there is less tax to pay. Surely it is as simple as that?

[AlexStiva]

If so, I meant, £290 remaining as cost incurred which could be claimed backed from the Revenue for that financial year during self assessment.

As a Tax Consultant, I still have not got a clue what you are talking about.

Clearly if he is earning less then there is less tax to pay. Surely it is as simple as that?

As I got it, vin123 means that (I use round numbers just for the sake of illustration): if I earn 500 a week, pay 20% tax form this sum, which makes 100 to IR. Then, if for 10 weeks in financial year I earned 5000, here is the calculations for normal pay and pay from NI fund:

normal NI fund
-------- ---------
Wages 5000 5000
Receive 5000 2900
Loss (exp) 0 2100
taxbase 5000 800
tax´to IR 1000 160
on bank a/c 4000 2740
----------------------------------

vin123, please confirm, is that what you mean ?