Self Employed Earnign through Limited Company: Help needed

[Imran123456]

I am bit confused and I really need help to clear some doubts regarding my self employed earning through limited company. I would be grateful if you please help me to get it right.

I have to show 16500 pounds as my earnings from my own limited company. I am the sole director and shareholder of the company.I kept all my earnings in the company's bank account and did not drew any salary or any dividend from the company's account to my personal account.

My accountant has prepared my company's accounts which shows the following figures:

Turnover: 22500

Administrative expenses: 6000

Ordinary profit on ordinary activities
before taxation/Net profit 16500

taxation on ordinary profit 3350

Profit after taxation 13150

There is also a balance sheet ofcourse. He has not declared any dividend.

Now the question is would it be acceptable with the accompanied accountant letter confirming net profit. I believe it is sufficient as per the guidance which says "Self-employed earnings within a business or company structure:
If an applicant has worked in a self-employed capacity in his/her own business or company structure and has chosen to keep his/her earnings within the business or company, he/she could provide:
business or company accounts that meet
• statutory requirements and show the net profit made for the earnings period claimed; and
a letter from his/her accountant confirming • the details in those accounts.


Please advise me if it is right or in case it is wrong what should I need to do. I would be grateful if anyof you could be of any help and could you please kind enough to give a sample of accountant letter as well .

Thanking you in anticipation

Imran

[republique]

I am bit confused and I really need help to clear some doubts regarding my self employed earning through limited company. I would be grateful if you please help me to get it right.

I have to show 16500 pounds as my earnings from my own limited company. I am the sole director and shareholder of the company.I kept all my earnings in the company's bank account and did not drew any salary or any dividend from the company's account to my personal account.

My accountant has prepared my company's accounts which shows the following figures:

Turnover: 22500

Administrative expenses: 6000

Ordinary profit on ordinary activities
before taxation/Net profit 16500

taxation on ordinary profit 3350

Profit after taxation 13150

There is also a balance sheet ofcourse. He has not declared any dividend.

Now the question is would it be acceptable with the accompanied accountant letter confirming net profit. I believe it is sufficient as per the guidance which says "Self-employed earnings within a business or company structure:
If an applicant has worked in a self-employed capacity in his/her own business or company structure and has chosen to keep his/her earnings within the business or company, he/she could provide:
business or company accounts that meet
• statutory requirements and show the net profit made for the earnings period claimed; and
a letter from his/her accountant confirming • the details in those accounts.


Please advise me if it is right or in case it is wrong what should I need to do. I would be grateful if anyof you could be of any help and could you please kind enough to give a sample of accountant letter as well .

Thanking you in anticipation

Imran

So far, the best your personal earnings can be is 13150 not 16500. You need to either generate a P60 for that amount or create a dividend slip. Again, you can not earn more than 13150

[John]

Why are you leaving money in the company? If you took the profit from the company as salary, only taking the employer's NI into account, then the CT liability would disappear.

Taking such a salary would undoubtedly mean more than £13150 would be showable to UKBA.

If you post details of exactly when you became a Director of your company then the amount of employer NI can be calculated.

[dev106]

Hello John,

even I need to apply for TIER-1 GENERAL in the near future.

Recently I started contracting using my own limited company...n coming to accounts I hired an accontant..I'm confused with few thngs:

a-Rt now ,I'm weekly paid..n is it good if i transfer my money from my bussiness bank account to my personal account weekly or monthly as soon as I get paid?
b- I told my accountant to generate montlhy payslips rather than weekly?is it ok
???
c- in order to reach 20k quickly,I'm thinking not to take any dividends...is it the rt thng to do or can i take dividends?????

Please moderators..help me out with these hurdles...thanks a lottt..

regards,

newbie

[John]

Using your lettering :-

1. See b below
2. Up to you, but totally OK is your have monthly payslips. Whenever a payslip is generated, I think that is the time to move the net amount, as per that payslip, from the company account to your personal account.
3. The employer's NI, whenever a salary payment is made, will be less than the Corporation Tax payable if profit is left in the company, and then paid out as dividends. So to get to the £20k mark as soon as possible it is probably better to take out salary rather than dividends, at least until the £20k mark is reached. But based upon the amount of profit you are generating, maybe your Accountant would suggest doing the other thing.

[alex2010]

Using your lettering :-

1. See b below
2. Up to you, but totally OK is your have monthly payslips. Whenever a payslip is generated, I think that is the time to move the net amount, as per that payslip, from the company account to your personal account.
3. The employer's NI, whenever a salary payment is made, will be less than the Corporation Tax payable if profit is left in the company, and then paid out as dividends. So to get to the £20k mark as soon as possible it is probably better to take out salary rather than dividends, at least until the £20k mark is reached. But based upon the amount of profit you are generating, maybe your Accountant would suggest doing the other thing.

Dear John,

Please kindly provide some advice for me.

I have 25% shareholding in a ltd company and I am not the director. I am claiming my points as a salaried employee of the ltd company. I received my payslips monthly and the money was paid into my bank account by the company directly. The company pays PAYE for me.

Would it be sufficient if I supply 12 consecutive months payslips, 12 months bank stmts, and a cover ltr from the charterd accountant confirming my salary on behalf of the ltd company. Do you think I need to also provide a ltr from CA to confirm my shareholding of the ltd company?

In the current turbulant economic environment, our business is making a loss. so we have a loss in p/l and balance sheet, and our CA have only provided annual account to Mar 2008. Do I need to supply P/L, Balance sheet, business bank stmts as an employee of the company?

Thank you very much for your help! I look forward for your reply.

Kind regards

Alex