Tier 1 (General) extension - self-employed

priyakute · Post by **priyakute** » Sun May 20, 2012 6:58 pm

Hi,

I am also nearing my extension, and I am also working thru Ltd Company where I am 65% shareholder, taking salary and dividend, I am really confused reading lots of post here in this form.

Should I be applying for extension as Employed, or Self employed.

Does every one needs to pay Class 2 NI if operating thru Ltd Company? My accountant said that if salary is less than 7500 /year then no NI to be paid by Company Directors ( in my case I am company director with 65 % share holder).

So should I be applying for extension as Employed, or Self employed.
Please advice.

Thanks
Priya

AccountantMatthew · Post by **AccountantMatthew** » Mon May 21, 2012 8:00 am

For the purposes of the UKBA you are employed (even though HMRC and accountants/tax people would always say differently, it's not up to them in this case!)

You will not register and pay class 2 National Insurance. That is for those who are self employed in the eyes of HMRC. You will be paying class 1 National Insurance if any is due through PAYE.

Post by **geriatrix** » Mon May 21, 2012 12:51 pm

AccountantMatthew wrote:For the purposes of the UKBA you are employed (even though HMRC and accountants/tax people would always say differently, it's not up to them in this case!)

From UKBA's perspective, OP is self-employed. From HMRC's perspective, OP is employed.

AccountantMatthew · Post by **AccountantMatthew** » Mon May 21, 2012 4:40 pm

Oops sorry priyakute I should check my posts twice on a Monday morning before pressing submit! I did mean self-employed as I'm sure sushdmehta will have realised given my spiel about the HMRC and accountants after it.

Just in case if you don't believe me (or even if he/she doesn't) here is what UKBA say in the Immigration Rules:

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

priyakute · Post by **priyakute** » Thu May 24, 2012 7:43 pm

Thanks both for reply,

So I will be applying as Self-employed.

I read in the forums regarding Class 2 NI, and lot of queries around this, so will this be a problem in my case due to my structure of salary and dividend could you please advice.

Thanks
Priya

AccountantMatthew · Post by **AccountantMatthew** » Fri May 25, 2012 7:26 am

You won't be liable for Class 2 NI payments.

zuby · Post by **zuby** » Fri May 25, 2012 10:45 am

Hello Matthew/ SushadMehta,

I think you are confusing Poor Soul.
You are the great Guru’s, I learned a lot from you.

If Priya is not paying class2 national insurance then definitely she Is Employed in her own Company.

She just need to Produce Share Certificate to UKBA.

Please correct me if i am wrong...

AccountantMatthew · Post by **AccountantMatthew** » Fri May 25, 2012 12:00 pm

You are I'm afraid zuby!

As far as HMRC are concerned, in the situation you are employed. Therefore Class 2 and Class 4 NI is not payable and any NI is paid (via Class 1) through the PAYE system.

As far as UKBA is concerned, which is the main thing for the application, you are self employed. To repeat, in their words:

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

It would be far easier in my opinion if UKBA's definition was the same as HMRC's and everybody else's - but alas it isn't.

zuby · Post by **zuby** » Fri May 25, 2012 1:01 pm

Let me Summarize,
If priya is Employed HMRC Prospective and Self Employed for UKBA point of view ,
Then Confusion Starts,

If she tick Self Employed, the first Question will ask by CW is Proof of National Insurance Contribution (Class2) (Please check PEO experience in this Forum)

She has two Choices:-

1)Prove the CW earning is low.
If you have low earnings
(HMRC source)
If you earn less than £5,595 per year you can apply for a Certificate of Small Earnings Exception and not pay Class 2 National Insurance contributions

2) Or Simply Tick Employed :-
UKBA guideline PAGE 14

Employees who receive a salary and
dividend payments:
• If the applicant is paid with a combination
of salary and dividends, and both
payments appear on the applicant’s
payslip, this employee could provide:

• personal bank statements for the full 12-
month earnings period

and either:
• payslips for the full 12-month earnings
period; or
• a letter from his/her employer.

WRS · Post by **WRS** » Fri May 25, 2012 3:40 pm

Couple of my friends (director of limited company) who went to PEO croydon recently were considered as self employed by the CW and were not required/asked to show the Class 2 NI proof.

one of them ticked "employed" but the CW said to him you are self employed as you are showing dividends income. Both got the visas same day.

zuby · Post by **zuby** » Fri May 25, 2012 4:26 pm

Hello WRS,

Is all your friends Paid Class2 NI, when they classed as Self Employed?

WRS · Post by **WRS** » Fri May 25, 2012 4:37 pm

zuby wrote:Hello WRS,

Is all your friends Paid Class2 NI, when they classed as Self Employed?

No! They were neither registered with HMRC as self employed nor had payed class 2 NI. They have payed Class 1 NI through PAYE system.

Regards,

priyakute · Post by **priyakute** » Sun May 27, 2012 10:24 pm

thanks for replies,

but I am really getting concerned about the more of application, either employed or self employed.

please advice, what document I should submit for earnings.

Post by **geriatrix** » Sun May 27, 2012 10:47 pm

priyakute wrote:thanks for replies,

but I am really getting concerned about the more of application, either employed or self employed.

Click on the text - self-employed - in my response above.

priyakute wrote:please advice, what document I should submit for earnings.

The policy guidance explains clearly what documentary evidences are required from self-employed applicants. Alternatively, search the forum - there're numerous posts detailing such information.

WRS · Post by **WRS** » Mon May 28, 2012 9:58 am

Perhaps page 15 of this rather old HSMP document on UKBA website enlightens more why directors of limited company are "self-employed"

http://www.ukba.homeoffice.gov.uk/sitec ... iew=Binary

priyakute · Post by **priyakute** » Wed Jun 13, 2012 9:46 am

Hi,

Could you please help me on this?

I applying for Tier 1 using my bachelor's degree, and now i am going for tier1 extn, I want to claim the point for my Master's degree.
A) is this allowed and possible to claim points for master's degree?
B) for english language requirement can i use master's degree?

Please advice, i getting bit confused.

Thanks,
Priya

params0073 · Post by **params0073** » Wed Jun 13, 2012 9:48 am

A) is this allowed and possible to claim points for master's degree?

YES (I did the same and got extension)

B) for english language requirement can i use master's degree?

If it appers in PBC then yes.

QuickSam · Post by **QuickSam** » Wed Jun 13, 2012 9:48 am

priyakute wrote: A) is this allowed and possible to claim points for master's degree?

Yes

B) for english language requirement can i use master's degree?

You have already fulfilled this requirement the last time. You don't need to prove this again.

priyakute · Post by **priyakute** » Tue Jun 19, 2012 12:10 pm

Sorry I have one more query.

I have been taking dividend monthly. And have around 11 dividend. Vouchers.
Will this be an issue? At PEO?
Please advice.

Thanks
Priya

Post by **geriatrix** » Tue Jun 19, 2012 12:24 pm

Why would UKBA be bothered if you took 1 dividend payment or 11 or none at all? IMHO ....

priyakute · Post by **priyakute** » Mon Sep 10, 2012 8:26 pm

Hi All,

Thanks all for your support and help.

I had my PEO Appointment @ Croydon today(10-Sep) and got Approval Letter.

I was 80% shareholder & Ltd company director.

These are the documents which they specifically asked me.

1) Application + Photos + Passport
2) Account Summary sheet explaining salary & dividend.
3) Payslips
4) Dividend Vouchers
5) Personal & Business Bank Statements
6) Invoices Summary
7) Incorporation Doc

All though I was bit tense, PEO experience was smooth.

Thanks
Priya

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Tier 1 (General) extension - self-employed

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