Tier 1 Entrepreneur paying salary to your self

[Irfanmz]

Dear Members,

I would kindly ask senior members to answer please,

My question is for extension purpose if you show your active role in company is minimum NQF level 4 or above, (let’s say system administrator) so do you have to pay your self-suggested HO minimum salary as explains in Code of Practice for Skilled worker ?? As long as my understanding is, this should not be the case you should pay to yourself whatever business situations allow you to pay. As you are running your own business and while your business is in initial stages you cannot just spend your investment by paying yourself heavily in the situation when your business is not generating a lot (as most of the business struggle in the beginning).

Thanks in Advance for your Kind views.

[Irfanmz]

Any one please???/

[hham1224]

I think HO shouldn't have any problem on you being employed by your own company but you cant justify this salary as your investment in the business.

You should also be aware of the tax and NIC implications in case you take a salary.

The second problem is that [which most of the people do not know] how you define your salary? If mere withdrawing certain amounts from your business account then it is not salary and beware of the huge tax implications.

One must run the payroll for you and remit the payroll info to HMRC on or before you pay yourself. A proper tax planning needs to be done to minimise the tax and NIC liability.

I have seen lot of people who spent fortune on Tier 1 ent by starting the new business [whether company or self employed] but do not realise the tax, NIC and compliance implications.

[Jaggers]

I allowed myself to pay £9000/year and This was one of the reason in my refusal letter stating How can you survive with this allocation of salary to yourself inner London.

As other members said plan carefully for HMRC and HO

Best wishes,
J

[Irfanmz]

Hello Jaggers,

thanks for your reply, so have you gone through the process of extension??? do mind please shareing your exprenice? and what do you say if 9000 is not enough than what will be enough salary for HO ? if you do not mind can share what other objections you received from HO and what documentation have you submited? if you wish you can email me on nini2002pk@yahoo.com. thanks in advance you for you valuable information.