Tier1General Extension-Previous earnings through Ltd Company

[Venkat Reddy]

Hi everyone,

Wonder if somebody can answer this one.

I have been this website for over the week and decided to put my real situation in front of experience people for genuine advice:

I was granted Tier 1 General in Aug 2008 and extension to be filed around 20 August 2011.

1. Basically I am an IT contractor and only in May 2011 I got a new contract for 6 months. I am planning to show my previous earnings on My Limited Company which is registered on June 2010.

I never done any transactions on my company and recently only I opened business account. I required > £23k as my previous earning so I am planning to show below as my previous earnings:-


a) May month Invoice - £6000.00 (Credit in to account in June)
b) June month Invoice - £6000.00 (Credit in to account in July)
c) July month Invoice - £6000.00 (Credit in to account in August)
d) Friend Invoice amount - £5000.00 (Credit in to account in June)
e) Friend Invoice amount - £5000.00 (Credit in to account in June)
---------------------------
£28,000.00
----------------------------
**** I have asked my friend to transfer his monthly invoice amount (directly from client) in to my business account
**** Please note that all the payments are genuine and coming from clients

I AM PLANNING TO SHOW BELOW AS MY PREVIOUS EARNINGS.

Required to show £23k gross income.

Expenditure: Salaries £1,200 (For 3 months )
Schedule E Expenses £3,000 (For 3 months)
Total expenditure £4,200
Profit before taxes: £23,800
Corporation tax: £4,760


All other Tier 1 requirements are well satisfied but the only problem with my previous earnings.

In 3 months time I am showing £28k transactions in my business account, Is this creates problem for granting extension????

I need to blame my self for this situation because I left my permanent job in JUNE 2010 and didn’t get a contract job till May 2011

I have spoken with couple of accountants regarding this situation and they advised me that I need to handle very carefully otherwise case worker will suspect.

Please advice me how to progress on this situation? – Any kind of help is much appreciated.

Thanks in advance.

[malikjitin]

Dear

If its a Limited Company, what would count is the Income you get in your bank in the form Dividends and/or Salary.

The monthly payments of the invoices to the company should be of any relevance to the Home Office. As they would not be assessing your Ltd company accounts.

They would be assessing your Income from your Ltd company.

Ps: I have just given my understanding to the situation. I am not a pro.

Regards

[Venkat Reddy]

Thanks for you reply. Sorry if my actual question confused you.

Actually I am planning to show £1200 salary and £19,040 dividends over the 3 months time - Is this creates the problem???