Did anyone got extension with Limited Company?

Rex · Post by **Rex** » Thu Dec 22, 2005 6:28 pm

Hi

Please post here if anyone has got HSMP extension with Ltd. Company?
Please specify the documents you attahced.

Thanks

dajumper · Post by **dajumper** » Wed Dec 28, 2005 2:04 pm

Hey mate, if you've read the post re:tax return. Although my friend had earned £80k+ in the last 12 months at time of application through his ltd co. He failed the salary section-reason being no tax return was submitted. I'm getting scared as well bcos i have been working through a ltd co. too! I'm covering myself in every way by submitting almost anything related. That is getting my agency & ltd co. administrators to write me a letter stating the gross income earned ie including the advance on dividends. As well as lodging a tax return (which i'm still waiting for) although only £13k was earned in the last tax year and all my bank stmts showing the net income received. I am hoping to explaing that as i only worked for 3 mths of the last tax year, that should be annualised to £52k. I am hoping to lodge my application by end of Jan06 after i get my 04/5 tax return back.

Post by **John** » Wed Dec 28, 2005 2:37 pm

dajumper wrote:As well as lodging a tax return (which i'm still waiting for)

What are you waiting for? Self Assessment returns can be filed online at www.hmrc.gov.uk . Much more efficient than using a paper form and you get (almost) instant acknowledgement that the return has been received by them. Not only that, the validations applied to the return when you send it in electronically include a check on box 18.3 ... how much tax is due from you, or how much refund you are due .... so you have confirmation of your tax situation.

If you have not previously used that online service then register today and await your activation PIN. Once you have that you can go online, activate, and then do your Self Assessment tax return form.

dajumper · Post by **dajumper** » Wed Dec 28, 2005 3:15 pm

Thanks, but my situation is a little complicated. I am working through a limited company and they have all the figures. Do you think i can just use my gross income earned then use the 19% small company's tax which has been deducted? Btw, i still don't have a NI number which i've been trying to get for the past year. (those bloody numbers never get through!)

Post by **John** » Wed Dec 28, 2005 3:25 pm

dajumper wrote:Thanks, but my situation is a little complicated. I am working through a limited company and they have all the figures. Do you think i can just use my gross income earned then use the 19% small company's tax which has been deducted?

Sorry, this is not complicated at all, once you appreciate that you and the Limited Company are two separate legal people!

Do you have any professional help to assist you to administer the Limited Company and deal with its accounts and tax, including PAYE? If not it certainly sounds like you need such help!

PM being sent to you.

dajumper · Post by **dajumper** » Wed Dec 28, 2005 3:37 pm

That's why i'm just going to be paying my limited company administrators to do my tax return for £100 + VAT. It's being sent to me in the post right now waiting for me to sign it. He told be it'll take 3 weeks plus. I did ask him about electronic lodgments but he said they do not lodge them that way. I've looked on the revenue sight have have tried to register but i don't have a UTR or whatever number... it really sux!

Rex · Post by **Rex** » Thu Dec 29, 2005 12:29 pm

dajumper wrote:Hey mate, if you've read the post re:tax return. Although my friend had earned £80k+ in the last 12 months at time of application through his ltd co. He failed the salary section-reason being no tax return was submitted.

What about your friend's case? what is the out come?

Korben Dallas · Post by **Korben Dallas** » Fri Dec 30, 2005 7:25 pm

guys, what happens if my salary is low (800-1000 a month) and I prefer to have all my money as dividends? will hsmp consider my application for extension based on 'low' salary or they don't care of salary at all?

dajumper · Post by **dajumper** » Wed Jan 04, 2006 1:46 pm

Well, as he did not manage to score the min 65 points. His application was refused

chandu2006 · Post by **chandu2006** » Thu Jan 19, 2006 3:24 am

Hi johny,

Please let me know, I am also planning to go with a limited company and I will be showing i am getting paid 20000 pounds a year and rest of the money as dividends.

Will my application for HSMP extension be approved.

Thanks

Chandra

Post by **John** » Thu Jan 19, 2006 7:50 am

You are entitled as an HSMP holder to be employed by a company that you happen to own. Clearly this is a genuine arrangement. I would not envisage, based upon what you have posted, you to have any problem getting a HSMP extension.

chandu2006 · Post by **chandu2006** » Thu Jan 19, 2006 8:10 pm

Thanks very much Johny for ur timely reply.

bruce3000 · Post by **bruce3000** » Fri Jan 20, 2006 8:34 am

Chandra

The test for getting an extension is economically active. Proving that your salary was 20k satisfies this any case.

I have not heard of anyone being declined an extension due to trading through altd company, there own company or an umbrella co

Bruce

Post by **John** » Fri Jan 20, 2006 9:33 am

I have not heard of anyone being declined an extension due to trading through a ltd company, there own company or an umbrella co

Indeed, there is no need so someone who is employed by a limited company to give any proof of ownership of that company. So in reality this is a non-issue.

Anyone setting up their own company to enable them to do contracting should be advised not to have the company name associated with their name. That is, Jo Bloggs should not set up Jo Bloggs Ltd.. But if Jo Bloggs sets up a non-personalised company .... say Antarctic Systems Ltd .... and then Jo Bloggs applies for their HSMP extension .... there is no need to show that Jo Bloggs owns their employer Antarctic Systems Ltd..

baba1 · Post by **baba1** » Fri Jan 20, 2006 1:02 pm

I have checked with Work permit guys that there is no such minimum requirement on the salary for hsmp extension as long as you are ecomically active. Regarding contracting if your salary + dividends transfer to your own bank account per month then there is no problem.

Regards,

Baba1

mi3 · Post by **mi3** » Sat Jan 21, 2006 5:24 am

Hi John,
My visa is up for extension in April & I've been working under my own ltd co., and the co. name is my surname. So pretty much the Jo Bloggs situation you described, does this mean that I'm best to state on the form that I'm self employed and do a business plan?

Post by **John** » Sat Jan 21, 2006 8:39 am

I've been working under my own ltd co., and the co. name is my surname.

From the visa point of view it will make no difference whatsoever.

However putting on my Tax Consultant hat, from the point of view of defeating any attack from HMRC concerning IR35, it is generally considered better to have a non-personal company name rather than one so clearly allied with you personally.

Now I accept that this could be considered overkill, but against that, why make life even slightly easier for HMRC to make an IR35 attack stick.

If I were you I would contact advisers and if they agree, change the company name.

mi3 · Post by **mi3** » Sat Jan 21, 2006 9:40 am

Thanks John for such a prompt reply.
So from the hsmp extension point of view i just need to prove that I'm economically active.

Unfortunately my accountant hasn't given me much guidance when setting up my company etc and the name of the company was always an area of concern for me. My company's been set up for nearly a year & previously I had IT in the name - which I read on a contracting website that it may be more likely to get targetted by the hmrc. I checked with my accountant & they said they knew of no such thing & so I decided to change it to something else & the first thing I thought of was my name.
So you think it best if I change it again?
I guess it wouldn't do any harm...

Post by **John** » Sat Jan 21, 2006 9:51 am

I don't want to tread on your accountant's shoes but I think yes, change the company name to something a bit more generic might be better.

vin123 · Post by **vin123** » Wed Jan 25, 2006 12:23 am

Hi John

I don't quite agree with your comments. IR35 and company naming convention had little relationship or no importance so far in the last 5 years - or ever since they started to jeopardise IT contractors.

And I have not heard a case where the Revenue started investigation picking the surname and ltd company name to match those unlucky souls who got snake-bitten in the last 2-3 years.

In fact, if Mr Williams is planning to start windows selling through his limited company he may perfectly go with a trading name "Williams window company ltd"

From IR35 point, in summary, the revenue is primarily going to see the company contracts and nature of work undertaken with respect to its employment and financial implications. If someone asks me how to be 'somewhat' safe from IR35, then I would say the safest bet is a PCG membership at under £150 per year.

John wrote: However putting on my Tax Consultant hat, from the point of view of defeating any attack from HMRC concerning IR35, it is generally considered better to have a non-personal company name rather than one so clearly allied with you personally.

Now I accept that this could be considered overkill, but against that, why make life even slightly easier for HMRC to make an IR35 attack stick.

If I were you I would contact advisers and if they agree, change the company name.

Post by **John** » Wed Jan 25, 2006 8:00 am

Earlier in this topic I posted :-

I accept that this could be considered overkill, but against that, why make life even slightly easier for HMRC to make an IR35 attack stick.

-: and I think it is in that context that my comments should be read.

Vin123, you post :-

I have not heard a case where the Revenue started investigation picking the surname and ltd company name to match those unlucky souls who got snake-bitten in the last 2-3 years.

In reality it is difficult to say why HMRC pick on any particular company to investigate. I would just prefer to raise as little suspicion as possible to any thought that the company's activities are caught by IK35. But absolutely emphasise that this might be "overkill".

chandu2006 · Post by **chandu2006** » Fri Jan 27, 2006 12:42 am

Hi ,

I am planning to go with payscheme plus and they suggested they will pay 20000 pounds as wages and others as dividends.I am willing to go with them as they r paying around 80% of my salary.

Is payscheme plus genuine and do u think they r following all Inland revenue rules as i am little scared about a large bill if Inland revenue thinks I am cheating them.

please can u suggest me other agencies or limited companies who can keep my income higher instead of paying it to Inland Revenue.

Please.

Thanks

Chandra

Korben Dallas · Post by **Korben Dallas** » Tue Feb 07, 2006 9:27 pm

Guys,

it is mentioned here and in guidance, that hsmp requires us to be economically active in order to get the visa extended.

but how about if my salary is absolute minimum (£94/week)? my accountant recommends me to go this way to avoid paying taxes on top of my salary.

basically it makes sence to have non-taxable salary and have all the money as dividents and this scheme suits me very well. also I realise if I increase my salary to be let say £1,000/week for hsmp purposes I'm facing a situation of paying big taxes comparing to have no taxation paid at all. of course, I understand that when I want to have my dividents paid to me I will need to pay taxes on that amount in any case, but that's a different story.

therefore my question is if this scheme of salary £94/week will prove I'm economically active?

ps: as far as I understand even if I'm not getting paid (salary-wise), but have a company that is economically active - it should satisfy the hsmp team. it is huge amount of time and efforts to make everything issued for your business (vat or pseudo turn, credit score, etc..) so in any case for self-employed visa should be extended automatically since if you discover that after a year of starting from the scratch and running a business in completely new environment you are not going to be eligible to continue working... you know.. it would be very unpleasant to realise and it would be very impolite (rude, silly, you name it) from the hsmp side. don't you think so?

pantaiema · Post by **pantaiema** » Fri Feb 10, 2006 7:18 pm

Hi Korben

If someone get salary of over 30K a year it is excellent but salary is not everything for the HSMP extension. The guidance clearly stated "economically active". Theoretically, even if do not work but you could show that you are actively seeking for employment in your level you could get extension. For instance, showing the applicaiton form, Jon=b interview invitaiton, etc.

I remembered last year there was a posting from some one. He got extension, though we was working as a security personal in a shop. Try to spend some time to browse this forum and find similar case.

My overal impression is that the case waorkers are more interested in the fact that you have the potential to earn and will not depend on the benefit in the future.

mi3 · Post by **mi3** » Sun Feb 12, 2006 8:16 pm

Help!!!!
I'm in the process if filling out my hsmp extension and in section 8, question 36 I have stated that I am paying mortgage of 1400 per month. Then immediately in question 38 I have written down my net salary is 1300 per month. As I'm working through a limited company most of my income is derived from dividends. I know that the hsmp extension requirement is that you show that you've been economically active, but my concern is that my application might be rejected as it appears as though i don't have the funds to support myself. What should I do??
Should I include my dividends to the net pay?

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Did anyone got extension with Limited Company?

Did anyone got extension with Limited Company?

please let me know

Thanks

Extension does not fully depend on your salary

Net pay & rent/mortgage as a contractor doesn't equate