HSMP - T1 General : Ltd company director previous earnings

[masarius]

For some background, I originally applied for HSMP in 2007 (post ILR) then extended for 3 years as Tier 1 General. My T1 General expires mid April and I'm preparing to make my ILR application.

With regards to previous earnings, I've read the guidance notes and also the guidance for assessors with regard to previous earnings so I know that as the sole director of a limited company I can use the net profits of the company within the prior consecutive 12 month period.

The guidance further states in the case of supplying bank statements and a letter from an accountant that invoices for the period should be included, and this is where I have a problem. As a limited company contractor I perform work for an end client through an agency. This agency pays my company based on time sheets that I supply that have been signed by the end client. I have previously produced monthly invoices and emailed them in PDF format to the agency but these were only really symbolic, payments are always based on the timesheets.

So, getting to the point, can anyone verify that submitting a combination of:

* Business bank statements
* Accountants letter confirming net profit of company
* Payslips for the amounts from the agency to my company
* Signed time sheets for the periods shown on the payslips

will be enough to prove my previous earnings? If you got this far thanks for reading!

[nnj10]

As Director of your own LTD company, you should be claiming your personal earnings from company, as opposed to the earnings of company itself.
The reason being it is your company which is in contract with end user via agency, and not you directly.
So any money earned to the company belongs to the company and as 100% share holder you can claim all the profits of the company once appropriate taxes have been paid (VAT & Corp Tax).

I would include following documents for personal earnings.

1) Payslips & Dividend vouchers
2) Personal bank statement showing above earnings

As you will probably be claiming full 12 month period for previous earnings; you probably will not retain all the profit in the company, so you would have paid out yourself any salary or dividend or both.

[masarius]

Firstly, thank you for taking the time to respond to my question. The main problem I have with claiming only my personal earnings from my limited company is providing satisfactory evidence to support this.

I cannot provide payslips as the only "official" payslips I have are from the agency, that I work through, to my company. My accountant sends me payslips but these are effectively from my own company and so I doubt they would qualify as a piece of evidence?

Dividend vouchers have the same problem in my opinion as they are signed by myself as the director and one other person, the secretary.

The Immigration Directorate Instructions also states the following (page 34):

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
  * personal/business bank statements.

The only thing that is ambiguous about this is whether it's only the profits that are kept within the company that can be counted in this way, I'm assuming that it is.

This really only leaves me with business and personal bank statements and some form of proof from the accountant. On this point I'm thinking a yearly accounts type document (can't be my actual yearly accounts as the period doesn't match sadly) combined with a letter stating the company / personal earnings. Here again is where we circle back to the requirement to supply invoices which is where my initial question arose from.

Given the above do you think your advice still stands and I should provide "self signed" payslips and dividend vouchers? I'm thinking at this stage of just supplying as many types of relevant evidence as I can and trying to list it clearly in the application.

[v3]

The same page 34 says

Employees who receive a salary and dividend payments:
If the applicant is paid with a combination of salary and dividends, and both payments appear on the applicant’s payslip, this employee could provide:
 personal bank statements for the full 12-month earnings period
 and either:
 payslips for the full 12-month earnings period; or
 a letter from his/her employer.
If the applicant is paid with a combination of salary and dividends, and the salary and dividend payments do not both appear on the applicant’s payslip, this employee could provide the documents listed above plus:
 dividend vouchers for each dividend payment claimed, showing both the gross and the net dividend.

I am applying for ILR as a limited company contractor the documents I am giving are
1. payslips on my company letter head
2. personal and company bank statements
3. dividend vouchers on company letter head
4. letter from accountant confirming that i am sole director , gross profit, net profit, tax, dividends taken and dates, salary and dates
5. getting invoices on company letter head

good luck

[nnj10]

Firstly, thank you for taking the time to respond to my question. The main problem I have with claiming only my personal earnings from my limited company is providing satisfactory evidence to support this.

I cannot provide payslips as the only "official" payslips I have are from the agency, that I work through, to my company. My accountant sends me payslips but these are effectively from my own company and so I doubt they would qualify as a piece of evidence?

Dividend vouchers have the same problem in my opinion as they are signed by myself as the director and one other person, the secretary.

As I stated in my previous post, the payslips you receive from agency is not your "personal" payslip, it is invoice (or remittance) advice from the agency i.e. Income for your LTD co.; which is not your "personal" income.

You should be using the payslips that your accountant provides you. There is nothing wrong with you self certifying your own payslips, same for dividend vouchers. I have done this in past for T1G extension without any problem. You can put your company stamp and initial if your timesheet is not on headed paper.

[mrite123]

masarius
You have same question which I had 3 years ago:)
Don't strees out you have everything which will be sufficient for your documentation.

Invoice
company bank statement
Personal bank statement
Payslips
Divident voucher
spreadsheet explaining gross and net sal+dividend+tax cradit+NI by A/c on accountant letter
accountant letter confirm your earning and should match with above.
Company incorporation certificate.
Any Tax return document from HMRC if u have..

[masarius]

Thank you all for taking the time to reply, I have a lot more confidence now that I'll have sufficient evidence

[kakss]

I have a question, What of if caseworker ask you to supply employment letter in this case of a Director of a limited company paying yourself a Salary.

How are you suppose to go about this. Will you issue an offer letter to yourself saying you are a Director of the company and earning XXXXXX

[kakss]

Can someone supply us with a sample Dividend Voucher.

Thanks

[kmore97]

Thank you all for taking the time to reply, I have a lot more confidence now that I'll have sufficient evidence

Hello All,
I'm in a similar situation and got my ILR just yesterday, so thinking of sharing my experience.

You all are right here.

I have got my Tier 1 extension about a year ago, producing the documents as follows:
1. payslips - stamped by accountant
2. dividend vouchers in plain paper (signed by me as company director/secratary) and stamped by accountant
3. A letter from accountant stating I'm company director, take salary and dividend - also tabulated the figures in payslips and dividend vouchers in this letter
4. Bank statements matching these figures

I'm not the only person, I have read about many persons in this forum who have successfully got Tier 1 like this.

This time for my ILR, I carried exactly same set of documents.
The case worker has asked for payslips, bank statement and employment letter. I told her I had payslips, dividend vouchers, bank statement and accountant letter. After hearing this she concluded I'm a self employed, I tried to explain her I run the limited compnay get salary and dividend voucher so it's like an employment. She asked if I have any NIC statement etc - I gave her 3 years P60 - she says she is looking for the proof of company paying NIC. I told here it's handled by my accountant. She discussed my case with her senior and came back, saying it may be ok, but the case needs to be referred to a senior case worker.
Then I volunteered and gave her some of the documents of my company that I was carrying - Statement of corporation tax I paid, VAT registration doc and PAYE registration DOCs.
She told me it'll take longer to decide, she tallied the figures in payslip, dividend voucher, bank statement and other verifications and refered to senior case worker. After 2 and half hours waiting the decision was out and they approved my ILR.
The conclusion is - to avoid producing so many documents required for self emploument route, you can produce only payslip/dividend vouchers and bank statements, but it'll not be treated as straightforward case, it'll take longer (of course within the same day)

[sunil.suneel]

As Director of your own LTD company, you should be claiming your personal earnings from company, as opposed to the earnings of company itself.
The reason being it is your company which is in contract with end user via agency, and not you directly.
So any money earned to the company belongs to the company and as 100% share holder you can claim all the profits of the company once appropriate taxes have been paid (VAT & Corp Tax).

I would include following documents for personal earnings.

1) Payslips & Dividend vouchers
2) Personal bank statement showing above earnings

As you will probably be claiming full 12 month period for previous earnings; you probably will not retain all the profit in the company, so you would have paid out yourself any salary or dividend or both.

I am concerned about the salary slip being used for ILR , as at PEOs there have been instances where the CW has used the Invoices and business bank account to caclulate the earnings (summing up GROSS invoice amounts) and mentioned they would have considered payslips only if they had furnished them ...

So don't you think it would be disadvantageous to include pay slips for those using Limited company as they very well know the director will pay out occasionally ... sometimes quarterly pays and dividends when ever needed ... and retain rest of the profits in the business account ....

[sunil.suneel]

Thank you all for taking the time to reply, I have a lot more confidence now that I'll have sufficient evidence

Hello All,
I'm in a similar situation and got my ILR just yesterday, so thinking of sharing my experience.

You all are right here.

I have got my Tier 1 extension about a year ago, producing the documents as follows:
1. payslips - stamped by accountant
2. dividend vouchers in plain paper (signed by me as company director/secratary) and stamped by accountant
3. A letter from accountant stating I'm company director, take salary and dividend - also tabulated the figures in payslips and dividend vouchers in this letter
4. Bank statements matching these figures

I'm not the only person, I have read about many persons in this forum who have successfully got Tier 1 like this.

This time for my ILR, I carried exactly same set of documents.
The case worker has asked for payslips, bank statement and employment letter. I told her I had payslips, dividend vouchers, bank statement and accountant letter. After hearing this she concluded I'm a self employed, I tried to explain her I run the limited compnay get salary and dividend voucher so it's like an employment. She asked if I have any NIC statement etc - I gave her 3 years P60 - she says she is looking for the proof of company paying NIC. I told here it's handled by my accountant. She discussed my case with her senior and came back, saying it may be ok, but the case needs to be referred to a senior case worker.
Then I volunteered and gave her some of the documents of my company that I was carrying - Statement of corporation tax I paid, VAT registration doc and PAYE registration DOCs.
She told me it'll take longer to decide, she tallied the figures in payslip, dividend voucher, bank statement and other verifications and refered to senior case worker. After 2 and half hours waiting the decision was out and they approved my ILR.
The conclusion is - to avoid producing so many documents required for self emploument route, you can produce only payslip/dividend vouchers and bank statements, but it'll not be treated as straightforward case, it'll take longer (of course within the same day)

Thanks for sharing your experience ....

So what are the best set of documents you recommend using for Limited company Earnings ?

From my point of view Invoices + Tallying Business bank statements + Accountant letter stating Gross & Net profits ... As running a limited company and sole director this will reflect your earning .... and will keep the tallying business easy for case workers ...

What do you think ?

[kmore97]

Thank you all for taking the time to reply, I have a lot more confidence now that I'll have sufficient evidence

Hello All,
I'm in a similar situation and got my ILR just yesterday, so thinking of sharing my experience.

You all are right here.

I have got my Tier 1 extension about a year ago, producing the documents as follows:
1. payslips - stamped by accountant
2. dividend vouchers in plain paper (signed by me as company director/secratary) and stamped by accountant
3. A letter from accountant stating I'm company director, take salary and dividend - also tabulated the figures in payslips and dividend vouchers in this letter
4. Bank statements matching these figures

I'm not the only person, I have read about many persons in this forum who have successfully got Tier 1 like this.

This time for my ILR, I carried exactly same set of documents.
The case worker has asked for payslips, bank statement and employment letter. I told her I had payslips, dividend vouchers, bank statement and accountant letter. After hearing this she concluded I'm a self employed, I tried to explain her I run the limited compnay get salary and dividend voucher so it's like an employment. She asked if I have any NIC statement etc - I gave her 3 years P60 - she says she is looking for the proof of company paying NIC. I told here it's handled by my accountant. She discussed my case with her senior and came back, saying it may be ok, but the case needs to be referred to a senior case worker.
Then I volunteered and gave her some of the documents of my company that I was carrying - Statement of corporation tax I paid, VAT registration doc and PAYE registration DOCs.
She told me it'll take longer to decide, she tallied the figures in payslip, dividend voucher, bank statement and other verifications and refered to senior case worker. After 2 and half hours waiting the decision was out and they approved my ILR.
The conclusion is - to avoid producing so many documents required for self emploument route, you can produce only payslip/dividend vouchers and bank statements, but it'll not be treated as straightforward case, it'll take longer (of course within the same day)

Thanks for sharing your experience ....

So what are the best set of documents you recommend using for Limited company Earnings ?

From my point of view Invoices + Tallying Business bank statements + Accountant letter stating Gross & Net profits ... As running a limited company and sole director this will reflect your earning .... and will keep the tallying business easy for case workers ...

What do you think ?

It's good you are prepared you may be treated self employed. I don't remember exact set of document requiried for self employment. Please refer tier 1 guidance note and be prepared accordingly.