Ltd company, salary+dividends - regularity and T1 extension

[immmaker]

I am a director of my own Limited Company (I'm the only one shareholder). Also my wife is a director of this company. We just pay ourselves some salary and sometimes some dividends for me, according to our needs, business results etc. So at some months we can have a salary paid, for some months dividends only, for some months, just nothing is paid from our business account. At the end of the day we have enough income for Tier 1 extension that is going to be in the next year. However we have some concerns regarding it:

1) As far as I can see, when people are applying as directors of their own companies, they apply as persons in salaried employment. They show some payslips for their salary and dividends etc. However I am uncertain whether it is possible to have salary paid on different occasions and in different amounts each time? Or is it possible just to have only dividends paid? Does anybody have an experience in applying for extension in such circumstances? There is a note in the guidance that they want to see all 12 payslips for the claimed period so is there anybody with an experience similar to ours?

2) Guidance says that dividends are accounted if they are from a company where the person is involved in day-to-day management. I understand that being a director is enough. However is it applicable, if there are two directors of the company (also my wife)? Is there any clarification in any official document for this matter?

Thank you very much in advance!

[nswapnil]

I guess it should be fine if you have not received salary or dividend for a particular month. In my case I did not take the dividend for 2 months but still I have submitted all the dividend vouchers and salary slips (for those months for which I did not take any dividend I mentioned the amount as 00.00). I explain this in covering letter i.e. details of salary and dividends for 12 months, also took a letter from accoutant detailing the same. Along with this submitted the bank statements, P60 and personal tax return.

[immmaker]

Thank you very much for the answer. It is good to hear that your approach worked in practice. Do you think that it is ok to apply as salaried employment but show salary = 0 and take everything as dividends? And also sometimes we have 2 salaries/dividends per month, is that fine?

[goldfish]

Thank you very much for the answer. It is good to hear that your approach worked in practice. Do you think that it is ok to apply as salaried employment but show salary = 0 and take everything as dividends? And also sometimes we have 2 salaries/dividends per month, is that fine?

You should get advice from your accountant. There may be issues with HMRC, minimum wage, etc if you pay zero salary. Dividends aren't salary so do have to (and probably should not be) paid at the same time as salary. I pay salary every month and dividends every six months (ie. two dividends per year).