Salary from 50000

Hi all
Can i take my salary from 50000
Tq

Yes, you can, but it won't be counted towards the expenditure of your investment.

In other words, if you take 10K as your salary from 50K, then your net investment is only 40K.

so i would recommend to take salary from the revenue/sale of your business rather than from the investment funds.

Tq
How about paying staff
Tx again

yes you can pay ur staff or spend it on business expense

Whether you pay salary to yourself or to your employees the salary is an expense which is charged to expense revenue summary or P &L account. I never heard an expense is an investment.
The money you invest do not sit idle in account its used in operation and generate more money unless the operations are in loss, so how can one determine whether the salary was paid through sales receipts or through original investment.

Perhaps only UKBA has the answers.

attahaas wrote:Yes, you can, but it won't be counted towards the expenditure of your investment.

In other words, if you take 10K as your salary from 50K, then your net investment is only 40K.

MTZ510 wrote:Whether you pay salary to yourself or to your employees the salary is an expense which is charged to expense revenue summary or P &L account. I never heard an expense is an investment.
The money you invest do not sit idle in account its used in operation and generate more money unless the operations are in loss, so how can one determine whether the salary was paid through sales receipts or through original investment.

Perhaps only UKBA has the answers.

attahaas wrote:Yes, you can, but it won't be counted towards the expenditure of your investment.

In other words, if you take 10K as your salary from 50K, then your net investment is only 40K.

MTZ510, paragraph 36 on page 13 of the latest Tier 1 (Entrepreneur) Visa Policy Guidance clearly states:

‘Spent’ by your business’ excludes spending on all of the following:
(1) your own remuneration,

It is clear that the entrepreneur's own salary is not considered an expenditure of the invested money. Yes, if it taken from the revenue generated or in the form of dividend, it's a different story. I guess an accountant can handle this as long as there is enough revenue generated through the business.

Yes that what the guide says, but the question is how to determine whether the salary was paid from original investment or from cash flow generated from operations ?

To be on safe side do not take salary from your business. Simple

attahaas wrote: It is clear that the entrepreneur's own salary is not considered an expenditure of the invested money. Yes, if it taken from the revenue generated or in the form of dividend, it's a different story. I guess an accountant can handle this as long as there is enough revenue generated through the business.

Hi

So Just to clarify can we show salary as investment or should it be expenditure, Im slight confuse.

if your company is earning money, meaning from sale, then obviously salary(or any other business expense) will be from cash flow generated from operation(its not rocket science, ask any accountant or check google) so equation will be (Profit = Sale - Salary(assuming salary is less than sale)) however if in any month your company did not make enough or overall sale amount have gone through business expenses already and no new sale made, then any business expense including salary will come from investment funds. So equation will be (Loss = Investment funds - Salary) So do not take any own salary when your company is not making sale as this will come from investment funds. Hope its clear now

MTZ510 wrote:Yes that what the guide says, but the question is how to determine whether the salary was paid from original investment or from cash flow generated from operations ?

To be on safe side do not take salary from your business. Simple

attahaas wrote: It is clear that the entrepreneur's own salary is not considered an expenditure of the invested money. Yes, if it taken from the revenue generated or in the form of dividend, it's a different story. I guess an accountant can handle this as long as there is enough revenue generated through the business.

entrepreneur123 wrote:if your company is earning money, meaning from sale, then obviously salary(or any other business expense) will be from cash flow generated from operation(its not rocket science, ask any accountant or check google) however if in any month your company did not make enough or overall sale amount have gone through business expenses already and no new sale made, then any business expense including salary will come from investment funds. So do not take any own salary when your company is not making sale as this will come from investment funds. Hope its clear now

MTZ510 wrote:Yes that what the guide says, but the question is how to determine whether the salary was paid from original investment or from cash flow generated from operations ?

To be on safe side do not take salary from your business. Simple

attahaas wrote: It is clear that the entrepreneur's own salary is not considered an expenditure of the invested money. Yes, if it taken from the revenue generated or in the form of dividend, it's a different story. I guess an accountant can handle this as long as there is enough revenue generated through the business.

Entrepreneur123, spot on! That's what I intended to say too.

I thought accounting works on annual basis rather than monthly basis

Well this means as long as your business is in profit you can take salary from business right ?

Thats what i said in my first post. Salary is paid through revenue generated during the period rather than fm investment unless the operations are in losses.

Thanks

yes ofcourse its annual basis. But i mentioned on monthly basis as we got small companies so easy to monitor on monthly basis e.g to keep an eye if you should take monthly dividends or not its better to use monthly accounts, but its really up to you. yes ofcourse if company is in profit then either/both you can take salary or/and dividends and if its in loss then you cannot take any of them.

MTZ510 wrote:I thought accounting works on annual basis rather than monthly basis

Well this means as long as your business is in profit you can take salary from business right ?

Agreed.
Can u.share your thoughts on how to document the money invested was used in business. Because some where in guide its mentioned that money should be used in business.

Thanks

entrepreneur123 wrote:yes ofcourse its annual basis. But i mentioned on monthly basis as we got small companies so easy to monitor on monthly basis e.g to keep an eye if you should take monthly dividends or not its better to use monthly accounts, but its really up to you. yes ofcourse if company is in profit then either/both you can take salary or/and dividends and if its in loss then you cannot take any of them.

MTZ510 wrote:I thought accounting works on annual basis rather than monthly basis

Well this means as long as your business is in profit you can take salary from business right ?

when we will apply for extention then its the accountant who will write that money has been invested in the form of shares or diector loan. From accounts prepared by him it could be easily seen if the invested money is still in balance sheet or have been spent and appearing in expenditure or is in the form of cash in balance sheet or in the form of assets.

MTZ510 wrote:Agreed.
Can u.share your thoughts on how to document the money invested was used in business. Because some where in guide its mentioned that money should be used in business.

Thanks

entrepreneur123 wrote:yes ofcourse its annual basis. But i mentioned on monthly basis as we got small companies so easy to monitor on monthly basis e.g to keep an eye if you should take monthly dividends or not its better to use monthly accounts, but its really up to you. yes ofcourse if company is in profit then either/both you can take salary or/and dividends and if its in loss then you cannot take any of them.

MTZ510 wrote:I thought accounting works on annual basis rather than monthly basis

Well this means as long as your business is in profit you can take salary from business right ?

Let me put this way, if i transfer 200K in company's bank account as directors loan. Then i use the money for trading purpose, the stock turnover is say 3 months and i get profit on stock after paying all my expenses. After 3 years my balance sheet will show Directors loan of 200K but at the same time my balance sheet will also show a good amount of bank balance because its a trading business.

I think the cash flow statement in accounts will give true picture. What you say

entrepreneur123 wrote:when we will apply for extention then its the accountant who will write that money has been invested in the form of shares or diector loan. From accounts prepared by him it could be easily seen if the invested money is still in balance sheet or have been spent and appearing in expenditure or is in the form of cash in balance sheet or in the form of assets.

Let`s make it clearer:

1) if your company within a good period made money and generated profit- salaries for your employees for this period doesn`t count as an investment for the purpose of the extension application.
2) if your company within a bad period has failed to generate profit - salaries for your employees for this period does count as an investment.

BUT! How you can show that if your bad period comes after a good one and your money mixed up on your business acc? Can you acctually stipulate in your directors loan agreement that "all money borrowed should be used for development purposes only"? or maybe it makes sense to open a saparete bank account for salaries? Any suggestions?

In other words, you can claim salaries for your empoyees when you are not doing well with your business that seems to be absolutelly irrational for the purpose of the Tier 1 (E) visa as whole

Hai Friends here i got a query relating to the Directors salary.

My question is can i take salary as a Director from my business account ? as my company is trading

Hai Friends here i got a query relating to the Directors salary.

My question is can i take salary as a Director from my business account ? as my company is trading

Hai Friends here i got a query relating to the Directors salary.

My question is can i take salary as a Director from my business account ? as my company is trading

I think: Actual investment must be spent in full except own salary

from generated revenue it possible to show director salary in profit and loss chart.

I had my hearing yesterday and this concern was raised.