Tier 1 General extension - Proof of earnings

[mbhong1]

Hi everyone,

I have a few questions wrt proof / evidence of earnings for Tier 1 General extension purposes.

I operate through a limited company and I'm both a director and an employee of the company.

1) Am I self-employed or employed (as a director & employee of a company)?

2) What sort of evidence do people in my situation usually provide? The guidance seems to say that if I’m employed, I’d need payslips / payment summaries detailing salary, dividends (gross & net), profits, tax credits and dates of net payments from my accountant and my business and personal bank statements to verify these… It also says a letter from the employer can also be used, but does this apply to me?

3) For salaries and dividends, is it gross or net that's counted?

I'd appreciate any tips, advice, help you can share with me.

Thank you,
Michelle

[girish]

Hi,
I am also interested to know about information on this.....

Thanks
Girish

[AccountantMatthew]

1) Am I self-employed or employed (as a director & employee of a company)?

For UKBA purposes you are self employed. (For HMRC and everyone else though you are employed).

2) What sort of evidence do people in my situation usually provide? The guidance seems to say that if I’m employed, I’d need payslips / payment summaries detailing salary, dividends (gross & net), profits, tax credits and dates of net payments from my accountant and my business and personal bank statements to verify these… It also says a letter from the employer can also be used, but does this apply to me?

You won't use a letter from your employer. One, some or all of the others listed above can be used depending on what type of income you are claiming. Dividend tax certificates should also be considered if claiming dividend income.

You can also claim via net profits retained within the company. More guidance on this can be found on the UKBA website.

3) For salaries and dividends, is it gross or net that's counted?

Gross

[girish]

Hi,
Thanks for this. I have recently taken up a contract opportunity and am on limited company.

Could you please let me know what is the minimum dividends, salary,etc i should take to ensure i cross 40K Per/Annum please....

Regards
Girish

[AccountantMatthew]

Without wishing to sound glib Girish it's £40,000!

How you wish to plan it is up to you. It depends on if you wish to minimise Corporation Tax or personal taxes at the same time. It depends on what profits the business make which then determines what can be declared as a dividend. You can also claim earnings proof through company net profits (assuming you are involved in the day to day management) - but then that depends on what the company turnover is and what expenses there are.

Although I'm sure it looks as though I'm promoting my particular industry, it's probably best to get an accountant on board and pay for some advice. S/he can then be given the full facts and can advise accordingly.

[Rama Avadhuta]

I had my Premium service in Glasgow PEO last week, I was in an impression that I am self employed, I did the same in my application

When the case worker asked me I told him self employed, he asked me to produce HMRC letter for UTR, since I didn't had that he gave me a option to apply through postal later with the needed document.

The case worker guided me to T1 General Guidance document, which has the reference in point 113, 116.iv

It took a while to realise what was wrong with my application as I checked with few people before going to the appointment and was very sure with my document. But later when I checked with my account he told me I am employed. So explain the case worker in detail, that is the only think I didn't do as I was in a impression I am self employed.

My friends who got extended recently suggested me this is unusual as mostly the case worker will know these scenarios, but any way Just I want to share.

I am sending my document today by post clearly explaining my work status.

[newbie_t]

Without wishing to sound glib Girish it's £40,000!

How you wish to plan it is up to you. It depends on if you wish to minimise Corporation Tax or personal taxes at the same time. It depends on what profits the business make which then determines what can be declared as a dividend. You can also claim earnings proof through company net profits (assuming you are involved in the day to day management) - but then that depends on what the company turnover is and what expenses there are.

Although I'm sure it looks as though I'm promoting my particular industry, it's probably best to get an accountant on board and pay for some advice. S/he can then be given the full facts and can advise accordingly.

Just to confirm, should the dividend vouchers, payslips and invoice summary printed on accountant's letterhead or my company's letterhead?