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fn286 wrote:Hi Vin123,
Thank you so much for your quick reply.
I'm not self employed any more since I got a nice job. I started working as a sole director of my limited company between June 2011 and March 2012, and my extension was granted on the basis of earning via limited company dividends only (no PAYE at all). Even my self assessment was filed for dividends only.
But you must be aware that to avoid heavy corporation tax, accountants play with financials to avoid taxes. They usually show more expenses. E.g. if I claimed points against dividends worth £18000 via my limited company, but later company may face losses or increased expenses. So overall yearly net income will be reduced, hence less tax will be paid. Basically, dividends are the net profits of the company.
I have personally checked with HMRC and they confirmed that limited company director is not self employment even you're working for yourself. It's considered employment.
My biggest concern is will Home Office question me on the corporation tax return that was small? Will they reject my ILR saying why your dividend payments so high and you are showing more expenses to HMRC for tax avoidance? Will they consider net income of my company as my earnings looking at corporation tax return?
My understanding is if limited company sole directorship is employment than it doesn't really matter if company is making losses or profit. It's just like I'm getting my salary currently, I don't have to show home Office if my employer is making profits or not.
Self employment is different where you have to show net income as earning. But for employment (even if we say self) as company director, we have to claim points againts salary and/or dividends.
I have closed my company but I do have all the original documents I submitted during my extension. Do you think it would necessary to show to caseworker even I closed my company? I have just ordered HMRC corporate return letter but I know what it will have..clearly I claimed dividends in thousands and paid few hundred in corporation tax.
I'm really sorry to ask so many quesitons, I hope you could understand what I'm trying ask. I will be applying for ILR as salaried employed worker this month. I have heard Home Office is asking questions regarding earnings at the time of previous Tier 1 (G) extension thats why I'm concerned because it was granted on the basis of limited company director.
thanks.
I think you underestimate the power of HMRC, and you need to study some Company Law, being a Director is not self employment.vin123 wrote:If you are sole director with 100% shareholding, that is considered as self employment.
In UK, corporation tax is not that 'heavy'.
Re: Expenses
A company will have 'expenses' if it makes a revenue.
It is not UKBA' official job to question about genuity of expenses claimed and why corporation tax filed at companies house is low.
Do not worry about how the accountant did your expenses - all he has done is maximise your earnings.
For your Tier 1 extension, What you need to do is very simple:
a) prove the revenue you have accrued for the company is by your work for the time period (i.e contracts signed showing rates per day and contract signed on behalf of your limited company)
b) prove the company made a profit at the end of financial year (account statement ) along with original business bank account statement where the revenue and expenses is accounted
c) prove the company belongs to you (ownership) ) and shareholdings along with your personal bank statement showing dividend income and/or salary.
Hope that helps?
you meant UKBA ; right ?I think you underestimate the power of HMRC, and you need to study some Company Law, being a Director is not self employment.
Come back to us then when you've done a little reading......
Come back when you've read some Company Law and not linked a pdf aimed at the lowest level full of likely-to-be's and maybes.vin123 wrote:you meant UKBA ; right ?I think you underestimate the power of HMRC, and you need to study some Company Law, being a Director is not self employment.
Come back to us then when you've done a little reading......
Check this http://www.hmrc.gov.uk/leaflets/es-fs1.pdf
Let me know when do you want me to come back ???
That is the best joke so far for 2014 !!I realise English is not your primary language but please do some research before you do some damage. I work with HMRC systems and UKBA can see them......
FTFYvin123 wrote:Wanderer,
Please don't escape the scene - understand this for your benefit.
A Limited company director is NOT considered as self-employed and also he or she is required to file a tax return, the reason being, a directors pay can 'vary' even if he or she is not a shareholder of the company or not which has eff all to do with SE or Directors renumeration..
For people filing for ILR or tier 1 extension, it does not matter.
All it matters is they take the right set of documents !
I now rest my case!
WHAT MATTERS FOR ILR OR TIER1 EXTN IS TAKING THE RIGHT SET OF DOCUMENTS FOR THE PURPOSE OF SUPPORTING YOUR APPLICATION TO QUALIFY!
Let's leave it there shall we, must be nice on your planetvin123 wrote:Ok, folks, fn286, wanderer - your last chance to get this right. And it appears like someone has mis informed fn286.
If you are self-employed: you MUST file a tax return.
A limited company director without a shareholding in a company is NOT self-employed. However, all active company directors must file a tax return.
However, Most immigrants on tier1 are using a limited company as a shareholding vehicle to channel dividend income. Hence they are classified as self-employed for the purpose of filing a tax return.
Now the all important question :Why ?
Answer: Because your income varies year by year when someone is self-employed !!!
For most, it does not matter whether they are really self-employed or not. UKBA wants to see your earnings. And it is your responsibility to prove your earnings. If you demonstrate your earnings by taking the right set of linked documents - then your will succeed in your application, otherwise no guarantee.
WHAT MATTERS FOR ILR OR TIER1 EXTN IS TAKING THE RIGHT SET OF DOCUMENTS FOR THE PURPOSE OF SUPPORTING YOUR APPLICATION TO QUALIFY!
fn286,fn286 wrote:Hi Vin123,
Thank you so much for your quick reply.
I'm not self employed any more since I got a nice job. I started working as a sole director of my limited company between June 2011 and March 2012, and my extension was granted on the basis of earning via limited company dividends only (no PAYE at all). Even my self assessment was filed for dividends only.
But you must be aware that to avoid heavy corporation tax, accountants play with financials to avoid taxes. They usually show more expenses. E.g. if I claimed points against dividends worth £18000 via my limited company, but later company may face losses or increased expenses. So overall yearly net income will be reduced, hence less tax will be paid. Basically, dividends are the net profits of the company.
I have personally checked with HMRC and they confirmed that limited company director is not self employment even you're working for yourself. It's considered employment.
My biggest concern is will Home Office question me on the corporation tax return that was small? Will they reject my ILR saying why your dividend payments so high and you are showing more expenses to HMRC for tax avoidance? Will they consider net income of my company as my earnings looking at corporation tax return?
My understanding is if limited company sole directorship is employment than it doesn't really matter if company is making losses or profit. It's just like I'm getting my salary currently, I don't have to show home Office if my employer is making profits or not.
Self employment is different where you have to show net income as earning. But for employment (even if we say self) as company director, we have to claim points againts salary and/or dividends.
I have closed my company but I do have all the original documents I submitted during my extension. Do you think it would necessary to show to caseworker even I closed my company? I have just ordered HMRC corporate return letter but I know what it will have..clearly I claimed dividends in thousands and paid few hundred in corporation tax.
I'm really sorry to ask so many quesitons, I hope you could understand what I'm trying ask. I will be applying for ILR as salaried employed worker this month. I have heard Home Office is asking questions regarding earnings at the time of previous Tier 1 (G) extension thats why I'm concerned because it was granted on the basis of limited company director.
thanks.