Tier 1 Gen Ext. - Dividend fr last year retained profit

[msvayani]

Hi to all
I have a query about pervious earning assessment for Tier 1 Gen Extension application particularly with dividend from previous years retained profit.

A client of mine has got extension due in January 2012. He is an IT professional operates through limited company. He himself is a director and 100% shareholder of the company. There is 3 junior staff as well in company. He draws small £12000 per year as Director Remuneration.

For the year ended 31st December 2010 Company’s profit after corporation tax is £18237.68

He needs to achieve 40 points (£35000 to £39999.99) in pervious earning assessment and his assessment period is January 2011 to December 2011.

He intends to achieve 40 points in following way:

Salary during year (Jan 2011 to Dec 2011) £12000 GROSS

Dividend (from 2010 retained profit) £20000 GROSS
(£18000 NET - £20000 GROSS)
He transferred £18000 from his company account to
his personal account in March 2011.

Dividend (from current year profit) £5500 GROSS
(£4950 NET - £5500 GROSS)
He will transfer £4950 from his company account to his personal
Account in December 2011.

TOTAL £37500 GROSS

His only concern is that if Home Office is going to accept this £20000 dividend as it has been drawn out from profit of pervious year. It is normal practice in real world but I am not sure about Home Office.

I will appreciate if senior on this forum can give us some advice on this issue.

Also what documents will he require for earning? Payslip, dividend voucher/s and bank statement. Is there anything else we should get ready like companies account etc?

Regards

MSV

[tier1_applicant]

should not be. as guidance note states:

"We will only consider proï¬

[goldfish]

Out of interest - why doesn't your friend post his own questions?

[T90]

what if somebody takes salary from previous year's profit?

[scorpio_besal]

ask the senior members..they will assist u better