T1 Extn - Dividend payout during break from contract

[sts96508]

Hi,

I am an IT contractor operating via a Ltd Company.

In order to slide the 15 month earnings period forward to hit an extension sweet spot date for future ILR purposes - can I pay myself dividends from retained earnings long after having stopped receiving payments from clients ?

For example, if I want to go for renewal not before March 2014, but may not have a contract after Nov-2013, is it okay to retain earnings and pay myself a dividend in March-2014 ? So that my 15 month pervious earning period ends in March-2014.

I understand I will still need to have earned the monies in a continous 12 month period in the 15 month window.

Thanks in advance for replies.

[karg_g]

Hi

Yes absolutely. Assuming you are the director and not sole-trader or self employed.

If you are sole-trader/Self employed you should only include the money made in the past 12 out of 15 months.
"94. If an applicant is self-employed and has chosen to retain the profits within the business, his/her earnings are limited to the share of the business’s net profits to which he/she is entitled. The appropriate proportion of the net profit of the business (that is, after tax and outgoings) can therefore be counted as the gross salary of the applicant.
We will only consider profits made during the appropriate 12-month earnings period for which the applicant is claiming "

[sts96508]

Thanks. Yes, I am the director and 100% shareholder.