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