Employment in your own business

[kayani2012]

thanks mate for replying.
thats mean it wont effect on my extension time but still its restricted on this visa?

[RizKCB]

@Olasunkanmi

1) I fully understand point 74 and also I accept Investment is acceptable in form of unsecured loan. It is clearly written in policy and I have no doubts about it.

2) Point (d) is also very clear and do not say anything about how much we have to spend. You are correct.

3) From A20's upper paragraphs; It is clear once again that unsecured director loan is acceptable by UKBA. No doubt

4) It is also clear, that investing not less than £200,000 or £50,000 will give us 20 points.

I fully agree with above points and there is no debate over it. These are very very clear.

My questions to you are: (according to last two paragraphs of A20 pasted down)
> Dont take it as I am making inquiry whether you are aware of it or not; Its just about my confusion and doubts and your answer could be helpful as ever before.

What does HO mean here?
Which points they will not award us?
What do they mean about Investment here?

"Money should be fully used in the business and not held in the business bank account in order to qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable."

@ Princess of Ammi
You are right on spot: "where to invest when there is no room to invest within business or company one has"
I am just presenting your sentence in two ways:

1) "where to invest when there is no room to invest within business or company one has"
There is enough room in your business account to INVEST at least 50K or 200K through unsecured loan. (20 Points Awarded)

2) "where to use when there is no room to use within business or company one has"
If you keep remaining money in your business account after using according to the available room, then HO says in A20: "Money should be fully used in the business and not held in the business bank account in order to qualify for the award of points" so which points they are talking about?

@ Princess of Ammi & @kayani2012
For 50K INITIAL Application; we must have to show the level of our business NOT less than 4. After initial application, when visa is granted; HO says that Entrepreneur could move to other business if in loss or depending on any other strategy or business plan (Whatever). But HO does not clearly say whether it must remain Level 4 or above through out. ON SAFER SIDE; we keep our business in level 4 or above.

At different places in this Forum, I have read that main business of level 4 or above could continue with some other side business of any other level (Even below level 4) and also the main objective should be level 4 or above business for extension as well. The authenticity of this working model for 50K guys is still doubtful or questionable.

On 50K T1 Ent visa holders BRP, the endorsement is T1 HS Enterpreneur where HS is Highly Skilled (May be in relation to level 4 or above). Is it also written on BRPs on 200K type visa holders?? In fact the main category is High-Value Migrants.

I dont think that kayani2012; TFL(Transport For London) will not allow you to get PHV licence until you get PH Operator licence. They might give you PHV licence after getting PH Operator Licence. They will do it after checking your Visa conditions and they could allow it as far as I know. Have you applied for it ??

[kayani2012]

i am in manchester and have done my medical just waiting of my CRB then will apply. let see what happen

[MTZ510]

@ RizKcb

1- Was just wondering whether the term "Amount Spent" in A20 is specifically meant for investment through Directors Loan and not for Investment through Share Capital. Because if the business has no third party creditors then the director can easily withdrawn investment without any tax implications where as in case of Share Capital one has to go into winding up to withdraw the investment. I had this feeling that the term "Amount Spent" is a sort of a safeguard to ensure the investment remain in the business. Any thoughts on this perspective.

2 -To offset the clause of directors salary not being considered as amount used in business can a director take interest on his loan, will the interest expense considered as money used in business?

[MTZ510]

@Olasunkanmi
Riz has given you very good reasons why one wants to work in his/her own company. I can expand it but in short it is tax efficient way.

May be they don't want T1 Entrepreneurs to be tax efficient.

[helpingperson]

@Olasunkanmi
Riz has given you very good reasons why one wants to work in his/her own company. I can expand it but in short it is tax efficient way.

May be they don't want T1 Entrepreneurs to be tax efficient.

I seriously don't understand why you bothered to comment on this. It is clearly one's choice to be PAYE and get salary in one's company.
RizKCB previous comment has given better reasons to do this.

[MTZ510]

@Olasunkanmi
Riz has given you very good reasons why one wants to work in his/her own company. I can expand it but in short it is tax efficient way.

May be they don't want T1 Entrepreneurs to be tax efficient.

I seriously don't understand why you bothered to comment on this. It is clearly one's choice to be PAYE and get salary in one's company.
RizKCB previous comment has given better reasons to do this.

No offence my friend. I am not questioning the reasoning of being employed in one's own business. I know its tax efficient. but i am looking at this from UKBA perspective.
You know the whole idea behind T1 Entreprenuer Visa is to put money in the economy.

[helpingperson]

Yes, it does not stop from being tax efficient. They want you to run a successful business which will be part of economy anyway. You can not throw money to please UKBA.

[MTZ510]

Yes, it does not stop from being tax efficient. They want you to run a successful business which will be part of economy anyway. You can not throw money to please UKBA.

My be you are right may be not. All we are doing over here is a discussion and off course non of us is an expert.
As mentioned in previous post on this forum i couldn't understand the logic behind Directors Salary being not considered as money used in business, if you will look at my comment in this perspective you will understand what i meant.
I am not that much concerned about saving tax, i am more concerned about spending money in business to get extension, its about objective, i left a good career back in my country to settle in uk and can't afford to end up being rejected for extension.

Cheers.

[tomii]

I have been reading this thread with much interest, but I'm still unclear with the below points:

1. Are we saying that staff pay counts towards as money 'spent' from investment or not?
2. Shop/office rents counts as money 'spent' from investment or not? and what about stocks/goods?
3. Guidance doc states that 'Spent' excludes 'buying the business from a previous owner...', but does this not contradict the purpose of tier 1 entr is to 'setting up new or taking over existing business', how can you take over existing business without buying the business in the first place?

Cheers!

[NAR]

I have been reading this thread with much interest, but I'm still unclear with the below points:

1. Are we saying that staff pay counts towards as money 'spent' from investment or not?
2. Shop/office rents counts as money 'spent' from investment or not? and what about stocks/goods?
3. Guidance doc states that 'Spent' excludes 'buying the business from a previous owner...', but does this not contradict the purpose of tier 1 entr is to 'setting up new or taking over existing business', how can you take over existing business without buying the business in the first place?

Cheers!

1- Yes (all other staff, not you)
2- Yes, Yes (if stock/goods are of course for the business to be used and/or re-sell)
3- my understanding of this that if you used up the entire amount or most of it to buy a business from someone then No. Even though from business investment is ok, but they DONT want you to take that option, similar to they don't want you to invest in properties only. If you buy a share in business 50% or more with deciding power, they don't want your money to be paid to the previous owner's personal pocket as your money will not contribute to EXTRA 2 staff.

They want the money to be added to the business capital to help grow this business and get more staff and get it back on its feet.

If you buying a business that is failing and need money injection so naturally the first owner will not take money into his pocket as the deal would be for you to inject money into the business (not his pocket) to get share of the business and have equal or better votes in the direction/decision on this business.

As mentioned in previous post on this forum i couldn't understand the logic behind Directors Salary being not considered as money used in business

Totally agree with MTZ on this one. I am currently at the stage where MTZ was on Jan 2014, don't understand the logic and the procedure everyone is doing NOT taking salary. and i am sure they are not taking dividends either.

Show me any "new" business that will give dividends from the first month?! or even first year for that matter. So if you are moving to the UK with lets say £230K, on Tier 1 net, how you will do it?

It seems some are taking money from the 200K as they don't have to invest the 200K at once so they put in some for the business and live on some other part hoping to be making money in one or two years to invest back and so on. Only problem that they CAN'T show the 200K is available ALL the time during the 3 years. i don't think they will check, but just saying my 0.02.

[entrepreneur123]

Answer to ur question 3: They are talking about Goodwill so if you buy business from previous owner say for 60k and also pay previous owner goodwill of 20k then 20k will not count investment but 60 k will count investment.

I have been reading this thread with much interest, but I'm still unclear with the below points:

1. Are we saying that staff pay counts towards as money 'spent' from investment or not?
2. Shop/office rents counts as money 'spent' from investment or not? and what about stocks/goods?
3. Guidance doc states that 'Spent' excludes 'buying the business from a previous owner...', but does this not contradict the purpose of tier 1 entr is to 'setting up new or taking over existing business', how can you take over existing business without buying the business in the first place?

Cheers!

[entrepreneur123]

service based companies or businesses can make profit from first day without any investment. so taking salary, dividends or not taking any of them will depend on nature of business.

I have been reading this thread with much interest, but I'm still unclear with the below points:

1. Are we saying that staff pay counts towards as money 'spent' from investment or not?
2. Shop/office rents counts as money 'spent' from investment or not? and what about stocks/goods?
3. Guidance doc states that 'Spent' excludes 'buying the business from a previous owner...', but does this not contradict the purpose of tier 1 entr is to 'setting up new or taking over existing business', how can you take over existing business without buying the business in the first place?

Cheers!

1- Yes (all other staff, not you)
2- Yes, Yes (if stock/goods are of course for the business to be used and/or re-sell)
3- my understanding of this that if you used up the entire amount or most of it to buy a business from someone then No. Even though from business investment is ok, but they DONT want you to take that option, similar to they don't want you to invest in properties only. If you buy a share in business 50% or more with deciding power, they don't want your money to be paid to the previous owner's personal pocket as your money will not contribute to EXTRA 2 staff.

They want the money to be added to the business capital to help grow this business and get more staff and get it back on its feet.

If you buying a business that is failing and need money injection so naturally the first owner will not take money into his pocket as the deal would be for you to inject money into the business (not his pocket) to get share of the business and have equal or better votes in the direction/decision on this business.

As mentioned in previous post on this forum i couldn't understand the logic behind Directors Salary being not considered as money used in business

Totally agree with MTZ on this one. I am currently at the stage where MTZ was on Jan 2014, don't understand the logic and the procedure everyone is doing NOT taking salary. and i am sure they are not taking dividends either.

Show me any "new" business that will give dividends from the first month?! or even first year for that matter. So if you are moving to the UK with lets say £230K, on Tier 1 net, how you will do it?

It seems some are taking money from the 200K as they don't have to invest the 200K at once so they put in some for the business and live on some other part hoping to be making money in one or two years to invest back and so on. Only problem that they CAN'T show the 200K is available ALL the time during the 3 years. i don't think they will check, but just saying my 0.02.

[Olasunkanmi]

The reason why HO don't want entrepreneur taking salary from the investment funds is because some people might simply take all the funds as salary without investing any money in their business.

Also the issue of not being allowed to take salary from the 50k/200k investment funds is like the requirement for students to show maintenance funds apart from their school fees. Students cant spend their school fees as maintenance unless they want to be kick out of the school.

The investment funds should be separate and entrepreneur are expected to have separate funds for maintaining themselves apart from the 50k/200k which they have initially promised to use for investment only.

[Nana51113]

Dear all,

Hope to hear soon from you , I did transfer the 50K from my personal account into the business account and all money has spent for purchasing goods and materials , and I got profit from sales my question now is that possible to get out director salary from the profit ?

Another questions does the cost for unning the business taken from my personal account count towards the 50K or only the money which has been transfered from my personal account to my business account ? Please advice

[marcnath]

@Nana51113 you have been repeatedly warned about not digging out old posts and posting your questions.This is a 4 year old post !!!