Previous Earning - Contractor (Private Limited Company)

[ChetanOjha]

Dear Members,

I am a contractor and looking forward to renew my HSMP in April 2009. I was granted HSMP in April 2007. I am a contractor and running my own private limited company as a Director of the company.In a view for my HSMP renewal I have been paying myself a gross salary of £3333.33 per month in order to meet 40K at the time of renewal. The same salary is reflected in the payslips which I am receiving from my company and the net monthly salary (as per the payslip) in bank statement.

Since I am director of my company:

1. Do I need to provide any other Income Proof to prove my pervious earning?
2. Can I show myself as an employee (and NOT director) of the company(my own) and present payslip+bank statement as a proof or earning; as director is also an employee of the company.

I would appreciate your response on the same. Also members who has the done same please reply.

Thanks
Chetan

[nnj10]

Hi ChetanOjha,

You can of course claim to be an Employed (even as a Director), if your salary is administered under PAYE system.
You should be alright with Salary Slip+Bank Statements.
If you receive Dividend from your company you can include that as well.

You might be better-off providing a letter from your accountant confirming your share-holding in the company.

NNJ10

[ChetanOjha]

Hi NNJ10,

Thanks for prompt reply. Yes my salary is administered under PAYE system. Regarding letter from accountant:

1. Do the letter can also include details regarding my gross/net salary or just the share holding?
2. Does the letter needs to include any income figures like Profit/Divided/Invoice amount etc?

Thanks,
Chetan Ojha

[nnj10]

Chetan Ojha Wrote:

1. Do the letter can also include details regarding my gross/net salary or just the share holding?

If you are claiming to be Employee of your own company, then there is no need to get a letter from accountant. The accountant letter is useful, if you claim to be self employed.

2. Does the letter needs to include any income figures like Profit/Divided/Invoice amount etc?

Not required. This is also applicable in case of self employed.

[ChetanOjha]

Great. Thanks NNJ10.

[fahadz1]

Hi.

I have read in people reply that in pvt ltd company as a director you are also employed for the compmany. I want to ask that i have registered pvt ltd company and my account told me i will take Dividends only from the money comes in my company account.
for example

I'm getting 2000 pounds this month so he said take 1500 to your personal account . this will be my dividend and i have to pay tax on 1500.

In this way i'm director of the company and this 1500 is not my salary. IS this acceptable in earning category ?

Can any one help and describe this in more detail how it works exactly. I will be thankful to you..

Regards,

FZ

[applyhsmp]

Hi Chetan,

I am in exactly similar position as yours. It would be great to be in touch.

Please send me your email id / mobile.

Thanks

[lizluong]

Hi Chetan,
I have the same circumstance as you. As I don't have an accountant managing my limited company, i also don't have any payslips. Can anyone tell me whether providing:
- a P60 for the claiming period is sufficient as evidence for my salary and
- dividend certificates signed by my secretary to prove dividends paid and
- bank statements sufficient?
thanks

[ChetanOjha]

I have the same circumstance as you. As I don't have an accountant managing my limited company, i also don't have any payslips. Can anyone tell me whether providing:
- a P60 for the claiming period is sufficient as evidence for my salary and
- dividend certificates signed by my secretary to prove dividends paid and
- bank statements sufficient?
thanks

As per the guidelines, you should be providing evidence from two different sources to corroborate the earnings.

-- Dividend Vouchers can be one (I am sure you have not claimed over £25K of dividend). For e.g. if you have receiuved £40k in dividends(which I doubt) then you can show dividend vouchers.
-- Bank Statement should reflect your earning. (This should show activity related to your earning as well).

I far as guidance note is concerned it should work as you are providing required evidence. Better to provide proper evidence as case worker do not grant benefit of doubt.