Combination of share capital and director's loan

[whiteroses]

I am using a combination of share capital and director's loan. Would this be ok for claiming £50K investment?
Also, do I need to show that I got tier 1 under £50K requirement or will they have this data?

Also, how detailed does the director's loan agreement have to be?

I saw one sample on here by someone who has got extension, and his agreement did not even have the addresses of the businesses and was extremely brief. Moreover, do we need to state that the money will be invested in installments, if we are not investing in one go?
An adviser told me to make separate agreements for each investment, but that would mean 15 different contracts!


Finally, what documents would you suggest to submit for the genuine entrepreneur test? Contracts and advertisements?

Thank you.

[Mrchaany]

Spingul Saab
No contracts or advertisements needed for tier 1 entreprenuer extension
100 % sure

[zimba]

I am using a combination of share capital and director's loan. Would this be ok for claiming £50K investment?

yes this is fine

Also, do I need to show that I got tier 1 under £50K requirement or will they have this data?

No. HO knows on what grounds you were granted your initial visa.

Also, how detailed does the director's loan agreement have to be?
I saw one sample on here by someone who has got extension, and his agreement did not even have the addresses of the businesses and was extremely brief. Moreover, do we need to state that the money will be invested in installments, if we are not investing in one go?
An adviser told me to make separate agreements for each investment, but that would mean 15 different contracts!

The terms HO requires to be in the loan agreement are clearly given in the Guide. You better draft a single loan agreement which allows loan transfer in multiple instalments. You need to seek legal advice from a business solicitor.

Finally, what documents would you suggest to submit for the genuine entrepreneur test? Contracts and advertisements?

Nothing ! You are NOT required to submit any documents for this. HO will ask you to submit extra documents or attend an interview if necessary. Focus on getting the required documents only

[whiteroses]

Thanks Zimba.
Is it ok to sign on behalf of the business as well on the agreement?

[zimba]

Thanks Zimba.
Is it ok to sign on behalf of the business as well on the agreement?

If you are the only director, then you will sign on behalf of your own business too.

[whiteroses]

One of my employees quit his second job a few days after he started working with us.
However, the fps says that it's his second job and obviously, this does not update later. He works full time with us.
Shall I write explaining that now he only has one job in the cover letter? Or will it look odd?
I've seen concerns about hiring people with second jobs and I'm therefore worried.

[zimba]

One of my employees quit his second job a few days after he started working with us.
However, the fps says that it's his second job and obviously, this does not update later. He works full time with us.
Shall I write explaining that now he only has one job in the cover letter? Or will it look odd?
I've seen concerns about hiring people with second jobs and I'm therefore worried.

This should not be a big concern. You can explain this in covering letter if you wish

[whiteroses]

Thank you for your suggestion. I just want to ensure that I can provide proof for the genuine entrepreneur test, but I don't want to send too many extra documents.
I considered sending invoices and contracts from the past three years, testimonials, insurance, accreditation documents, etc, but there are already a large number of documents to send.
Also, my business is such that a part of the service is provided online and I have to travel to customers daily. For this reason, I am running a business from home and did not realise this was an issue until I saw some of the posts here and that people are sending lease agreements and apparently a few are doing it purely to pass the genuine entrepreneur test.
I don't really see the point of leasing an office when we don't need one and would be out of office half the day for work reasons anyway. If in the future the nature of work changed such that we needed a dedicated office, I would go for one, but not sure if it's worth increasing overheads at the moment as a young business.

[zimba]

There are NO documents required to be sent for genuine entrepreneur test
Unfortunately the panic exhibited here from some members of the forum is unnecessary and unjustified without any evidence
You should only send the documents required from you based on the immigration rules Appendix A. No one here has ever reported to be questioned for genuineness and I never heard people being called for an interview yet. Home Office obviously reserves the right to question any individual on the basis of genuineness but that does not means that now applicants must send extra documents or HO will assume that you are not genuine. If you case needs investigation on genuineness grounds, you certainly will be called to attend an interview and submit extra documents.
I suggest all members on this forum who are planning to apply for their extensions to focus ONLY on the required documents as almost 99% of the refusals reported here were due to applicant's failure to send the required/correct documents for successful extension. You will certainly be given a chance to submit extra evidence if HO needs to investigate your claims further.

[whiteroses]

HMRC allows director's use of private residence for work reasons as tax deducible. The money is not given to the director, but it goes through the P&L. But will HO accept this? I mean, will it be treated like they treat director's remuneration?

[zimba]

HMRC allows director's use of private residence for work reasons as tax deducible. The money is not given to the director, but it goes through the P&L. But will HO accept this? I mean, will it be treated like they treat director's remuneration?

Ask your accountant. If it is considered director's remuneration, then not acceptable.

[whiteroses]

Thank you for replying.
I have emailed my accountant to double check.
I thought that remuneration or claiming expenses from profits was permitted? But yes, don't want to take a chance.

[whiteroses]

According to him it is a claim for reimbursement and not remuneration, just like other expenses are reimbursed. Not sure what HO will have to say though.

[whiteroses]

Another point is that I did not withdraw the amount yet for any of the years, although it went through P&L.

[moongesture]

better to be safe rather then becoming the subject for 245D(c)(..) "any spending which is not directly for the purpose of establishing or running their own business or businesses"

[whiteroses]

It is a home run business, hence the expense is for running the business.
Anyway, I could reinvest an amount equal to the amount charged in P&L as the accounts have already been submitted.

[whiteroses]

I just have one more question about this.
If I introduce an amount equal to the expenses claimed, will I need to explain all of how I have still invested over £50,000 despite the expenses?

[Faheemryk]

In my best knowledge, use of home is allowed by HMRC, but HOME OFFICE doesnt assume its investment.

[whiteroses]

Do HO still accept pre-paid special delivery envelopes with the application? Just wondering if I should send one this time because with the initial application, I did send one, but they did not use the envelope, although they did use the one sent with my PSW application.

[moongesture]

It is Not required but you can send if you want.

[whiteroses]

There is no information about this in the guidance or the immigration rules, but is a five year term acceptable for loan?
Or does it have to be longer than that?

[moongesture]

Its depend upon lender & borrower. Length of loan is not covered in any immigration rule. But is is advisable that it should fall for more then an year.

[whiteroses]

Its depend upon lender & borrower. Length of loan is not covered in any immigration rule. But is is advisable that it should fall for more then an year.

Thank you for your reply. Sorry, could you clarify what is more then an year?

[zimba]

There is no information about this in the guidance or the immigration rules, but is a five year term acceptable for loan?
Or does it have to be longer than that?

The period is not covered by the rules. It can be a year or five years. Whatever you choose.

[zimba]

Yes you can provide a special delivery envelope. Read item 17 from the guide.