Directors Salary

Dear Guru's,

I have always received valuable advice from experts in this form and would like to raise a query regarding director's salary. My extension visa application date is in Nov 2016.

My business has been intially having loss, so I did inject 50k in small amounts. We have 2 directors in the company. The other director is not in a entrepreneurial team. We both have been drawing a very minimal salary.

Our accountant have shown these salary in expenses when he prepared accounts for companies house. Our business was functional and generating revenue. It was that there were some set up cost that created loss in final accounts.

Please can someone advice how to resolve this situation. Now the business is making profit and he are drawing salary from the profits. Do I have to do anything to show that directors salary was never drawn from the investment I made?

I have employees and consultants working for us, paying them itself have been more than 50k. Please davice how should I justify?

Again appreciate your valuable advice.

Regards,
Soni

If your expenses (minus the director's salary) has been more than £50k then you are fine. You do no need to show anything

zimba88 wrote:If your expenses (minus the director's salary) has been more than £50k then you are fine. You do no need to show anything

Hi Zimba, a director salary related question please, after extension approval, in the two years leading to ILR, is there a minimum salary for the director? If there is, how much? Thanks in advance.

hamalt66 wrote:

zimba88 wrote:If your expenses (minus the director's salary) has been more than £50k then you are fine. You do no need to show anything

Hi Zimba, a director salary related question please, after extension approval, in the two years leading to ILR, is there a minimum salary for the director? If there is, how much? Thanks in advance.

Thanks Zimba, I just saw your answer on another thread.

zimba88 wrote:If your expenses (minus the director's salary) has been more than £50k then you are fine. You do no need to show anything

Expenses or losses?more than 50,000

Expenses_ Directors Salary should be more than 50000
What about revenues?

Loss is when expenses are higher than revenue , no ?

There is a difference between expenses and loss so let's say 1st year expenses 30000(Excusing Directors salary)
and revenue 17000 the net loss is 13000.2nd year expenses 4000 (excluding Directors salary) revenue 33000 and net loss is 10000 so in two years the net loss is 24000 but total expenses excluding directors salary are 70000 which is more than 50000 does this mean that the net investment (done as DL one go 50000) means that everything is fine and no injection as DL required ?
That's is the difference sir.

I guess in your example you meant: 2nd year expenses 43000 for the numbers to add up.
The so-called net loss value you calculated is technically the money you had spent from your pocket/investment to pay for expenses on top of the revenues. Now if you have 26K in the bank then it means you should be okay given that you invested 50K initially.