Hi to all
I have a query about pervious earning assessment for Tier 1 Gen Extension application particularly with dividend from previous years retained profit.
A client of mine has got extension due in January 2012. He is an IT professional operates through limited company. He himself is a director and 100% shareholder of the company. There is 3 junior staff as well in company. He draws small £12000 per year as Director Remuneration.
For the year ended 31st December 2010 Company’s profit after corporation tax is £18237.68
He needs to achieve 40 points (£35000 to £39999.99) in pervious earning assessment and his assessment period is January 2011 to December 2011.
He intends to achieve 40 points in following way:
Salary during year (Jan 2011 to Dec 2011) £12000 GROSS
Dividend (from 2010 retained profit) £20000 GROSS
(£18000 NET - £20000 GROSS)
He transferred £18000 from his company account to
his personal account in March 2011.
Dividend (from current year profit) £5500 GROSS
(£4950 NET - £5500 GROSS)
He will transfer £4950 from his company account to his personal
Account in December 2011.
TOTAL £37500 GROSS
His only concern is that if Home Office is going to accept this £20000 dividend as it has been drawn out from profit of pervious year. It is normal practice in real world but I am not sure about Home Office.
I will appreciate if senior on this forum can give us some advice on this issue.
Also what documents will he require for earning? Payslip, dividend voucher/s and bank statement. Is there anything else we should get ready like companies account etc?
Regards
MSV
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