rahulsingh1 wrote:important to note the following here. There are 2 parts to the equation, which you need to complete.
1)Txfr money into company account.
You need to transfer the 50k/200k from your personal bank account to company bank account. This transfer's proof would be your company's bank account statements(during exntention).
- now there are 2 ways to transfer(in legal terms i.e.).
1) you do a straight forward investment into the company. But the downside is, thatyou cannot take it out. You have to pay 20% tax(at least) to take it out as dividend.(which is not the best way)
2) The second method is to do a director's loan agreement(any accountant can do the paper work for you). In this case, you give a loan to your own company. The advantage here is, you can take the money out, without paying tax. As the company is returning the money it borrowed from you.
2)Spend this money.
UKBA clearly expects your company to then spend this money in the UK.
There are restrictions, your company cannot buy a residential house with that money. And it cannot pay you(the investor/owner) with that money.
Barring this, you can pretty much spend on anything. But you need to spend. Earlier there was no regulation as such. But this has changed with the 31st Jan change.
Couple of things need qualifying here.
Taxation is only applied on the operating profit (Gross Profit - Overheads) not on your initial capital (money you transfer) in the bank.
There is no mention (unless you can point to this for myself and others) about transferring the lump sum of £50/200K, if you transferred, let's say £20K and made decent sales and then reinvested SOME of your profit each year, that you are allowed to keep at end-year for reinvestment.
In simple terms if you can show your business overheads (employee wages, office rent, pool car and so on) of £50K/£200K and how you met these overheads whether through reinvest from profit or initial capital then that all is required.
Transfer money to your business account in small chunks as when you need it, this will mitigate any risks in case your company is forced to be wound up (liquidation).
