HSMP-ILR JR Self employed / Limited Company - Documents

[Jk2007]

I have ample time to apply for ILR. But I think documents gathering can commence now. If someone is in a similar following situation, please provide your views on what kind of documents are required to prove economic activity, tax payments etc.,

I own my limited company, I am Director and 100% Shareholder. I Pay myself salary and dividends. I file my company's corporation tax returns. I also file my own personal self assessment tax return.

Question 1: Should I declare myself as "Self Employed" or "Employed"? The documents to be submitted will depend on answer to this question first.

[shockboy2000]

when are u due ? ive been employed directly and thru umbrella company earlier on my HSMp...and now self employed. I'll say im self employed if i am not a permie come ILR time.

As self employed I'll show for personal income:
P60, Dividend vouchers, bank statements, contracts.
Im going to get a stamp made up for my company, to stamp the dividend vouchers (my accountant thought this was excellent idea).

and for company income:
Annual company reports, company bank statements, invoices to and remmitance advices from my customers.
Will probably throw them the Companies House certificate too, the whole Spam sink.

[tech]

HO follows the definition of self-employed defined by Inland revnue.
you are an employee of limited company. As shareholder in the company you are allowed to draw dividends and salary as income. But this doesn't make you as self-employed since you must pay class 1 national insurance

Self employed persons pay class 2 national insurance which is different altogether and have to meet different set of requirements.

Get your accountant issue letter stating your gross and net income, tax paid,salary and dividend vochers. You would also get P60 for the salary drawn for the tax year.This should suffice as proof of income.

Hope this helps

[Jk2007]

Shockboy,

I have another 10 months to file my ILR.

I was also with an umbrella company for the first year of my HSMP.
Now I work through my own limited company.

If we show as self employed with our own limited company with 100% shareholding, is it not enough if we just provide company tax returns? Are our self tax returns, P60 etc., necessay? I thought it is either our personal statements OR the company statements, not both. What do you think?

[Jk2007]

HO follows the definition of self-employed defined by Inland revnue.
you are an employee of limited company. As shareholder in the company you are allowed to draw dividends and salary as income. But this doesn't make you as self-employed since you must pay class 1 national insurance

Self employed persons pay class 2 national insurance which is different altogether and have to meet different set of requirements.

Get your accountant issue letter stating your gross and net income, tax paid,salary and dividend vochers. You would also get P60 for the salary drawn for the tax year.This should suffice as proof of income.

Hope this helps

Tech, thanks for your comments. Are your points valid even if one works through his own limited company, as a Director with 100% shareholding. Is this not running one's own business?

[sunny158]

I run my own limited company, I own 100% share of my company, maybe I am also employed by my own company, my income is from my company salary and dividends, and salary is not much, most income are from dividends. I will apply ILR in June based on old 4 years rules.

You can apply as employed or self-employed, it is not important,but I will apply as self-employed, because most my income is from dividends. I will show both my personal and company bank statements, my payslips and p60, and corporation tax returns, and annual account reports, but i think we need to show we currently are still trading as well. If you apply as employed, you dont need to show you company profit or dividends, only the salary,but the salary is too little, i dont think HO is gonna be happy to see you only earn that much money,and if you provide these company documents, it proves you are doing something here. Simply just give them more good documents and you will have a solid application.

Anybody have different opinion?

[Jk2007]

I will show both my personal and company bank statements, my payslips and p60, and corporation tax returns, and annual account reports

You mean payslips for 4 years: 48 pay slips?

[sunny158]

hi, i gonna give them p60 for the tax year 2008, and the payslip of the last 3 months.

[Jk2007]

You can apply as employed or self-employed, it is not important,but I will apply as self-employed, because most my income is from dividends. I will show both my personal and company bank statements, my payslips and p60, and corporation tax returns, and annual account reports, but i think we need to show we currently are still trading as well.

Section 9G of the ILR application has the following:

If you are employed, documents showing economic activity and personal eranings during your stay in the UK.

If you are Self employed, you should provide evidence of the progress of the business.

Does this mean, If you are Self employed, you don't need to provide evidences for personal earnings P60, pay slips etc.,?

[tech]

Ho clearly classified the applicants who received income in the form of salary and dividends and what you should provide as documentation. which I quote from the ho website

http://www.ukba.homeoffice.gov.uk/worki ... documents/

"For example, if you have been paid for your salaried employment by means of a salary and a dividend. If the gross and net dividend payments are included on your payslip, and can be supported by details of the net dividend payment on your bank statements, you could send bank statements and payslips as supporting evidence for both the salary and the dividend claimed. However, if the dividend details are not included on the payslips, you must also send separate dividend vouchers to support the dividend payments and cross-reference these with the bank statements you send."

If you go self -employed route, you are burdened to prove the progress of your business and your income from the business.

Hope this helps

[Jk2007]

Tech,

Thanks for the link.

I think I fall under this catagory:
-------------------------------------------------------------------------------
Self-employed earnings within a business or company structure:

If you have worked in a self-employed capacity in your own business or company structure and have chosen to keep your earnings within the business or company, you could send:

business or company accounts that meet statutory requirements and show the net profit made for the earnings period claimed; and a letter from your accountant confirming the details in those accounts.
--------------------------------------------------------------------------------

Only thing that I don't understand from the above is the meaning of "have chosen to keep your earnings within the business or company". Does this mean, no salaries being paid, and all the income kept within the company account?

Another point is, this link is for calculating income under points based system for tier 1. For ILR, no points need to be earned, only economic activity to be shown. So, would the HO insist on thorough documents as for the points based applications?

[sunny158]

UKBA website show this for people want to apply the new tier one vias:

"Self-employed earnings within a business or company structure

If you have worked in a self-employed capacity in your own business or company structure and have chosen to keep your earnings within the business or company, you could send:

* business or company accounts that meet statutory requirements and show the net profit made for the earnings period claimed; and
* a letter from your accountant confirming the details in those accounts.

If you are not the sole shareholder of the company you should also provide a letter from your accountant confirming your shareholding and the proportion of net profit before tax to which you are entitled for the earnings period claimed."

However, we apply the ILR, maybe it is not really the same, and i have enough documents to show the progress of my business and income from the business.The progress of your business does not mean you have to make a profit, but it needs to shows you make all the steps to make it profitable and contribute to UK economy.

[Jk2007]

However, we apply the ILR, maybe it is not really the same, and i have enough documents to show the progress of my business and income from the business.The progress of your business does not mean you have to make a profit, but it needs to shows you make all the steps to make it profitable and contribute to UK economy.

So, if you are operating through your own limited company in which you are 100% shareholder, would HO accept only the following company documents (and not personal tax statements nor personal bank statements) for economic activity?

(1) Company annual accounts prepared by the accountant.
(2) Company bank statements, showing remittances from the clients, and payment of corporation taxes to HMRC.

Unfortunately, HMRC does not provide receipts for the corporation taxes paid, so only evidence for the taxes paid to HMRC is the Bank statements.

I don't have any problem in providing personal tax statements, payslips, or personal bank statements, but I feel these will be too much of documentation, and will cause unnecessay confusions. If we provide both personal, and business documents, HO has the burden of correlating the huge number of documents..

[tech]

The principle and documentation required for ILR or Tier 1 is the same.
For ILR, they didn't give specific instructions like Tier 1. But when you go for an ILR appointment , you will be asked for same set of documents that is outlined in Tier 1 list. That is for cent percent sure.

In Tier 1, the goal is keep the process objective leaving very litte or no room for caseworker discretion (due to points need to be given),ILR allows more discretion to the caseworker in decision making process.

If you orgainse you doucmentation as outlined in tier 1. you will face no difficulties and enjoy smooth ride.

hope this helps

[sunny158]

Hi, JK2007,

Your company annual accounts prepared by the accountant should be ok, but it is better to ask your accountant to provide a letter to tell them that you are the sole shareholder of your company(needs company registration number), and you company is currently still trading, and how many people are working in the company, if you make a profit, tell them the earning and tax paid, and if you paid the corporation taxes, you should have payment slips, or you can ask HMRC to send your a letter, I never try, dont know HMRC will do it or not, but i think your account can help you to check it out, and write the corporation tax thing in the letter too.

If you want, you can provide the invoices from your suppliers etc and your latest business statement. If business does not make a profit, I think people need to give more documents, basically they dont say we have to make a profit, just say we should not use public funds.

[rana azher khan]

hello guys,

I am new on this forum and need some help regarding my situation.

My ILR JR due in november. I work as self employed i.e paying NI through direct debits and there is no limited company structure , I am looking to send the following documents

BANK STATEMENTS
ACCOUNTANT LETTER
ACCOUNTS

OF LAST THREE MONTHS AS MENTIONED ON HOME OFFICE WEBSITE.

I need advice regarding my application

Many Thanks,

Azher