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Income for limited company director

Archived UK Tier 1 (General) points system forum. This route no longer exists.

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Parthaab
Newbie
Posts: 38
Joined: Fri Jan 14, 2011 11:23 am

Income for limited company director

Post by Parthaab » Sat Jun 06, 2015 9:30 pm

I have applied for two T1 G extensions before.
The first time, I showed only income that I had earned for the company in the said period. They were shown as 'profits in the company', but I did not withdraw it to show as 'dividend' and so saved tax. :wink:

Two years later, the second time, on someone elses advice, I withdrew the money to show 'dividend plus salary'. :cry:

I was successful both times, but the second time involved much more tax. When I called UKVI, they told that only income for the company should be enough ( i.e that I do not need to withdraw as dividend and pay tax unnecessarily ).

Will the experts be able to advice on which of the two will be acceptable ( as the second approach is expensive paying taxes, instead of leaving it in the company account as 'profits' ) for extension / ILR?

Parthaab
Newbie
Posts: 38
Joined: Fri Jan 14, 2011 11:23 am

Re: Income for limited company director

Post by Parthaab » Tue Jun 09, 2015 7:09 pm

Would appreciate any guidance from seniors?

O_Relly
Senior Member
Posts: 847
Joined: Mon May 23, 2011 5:22 pm

Re: Income for limited company director

Post by O_Relly » Thu Jun 11, 2015 3:05 pm

Both approaches are fine, as you yourself have successfully done in the past.

See point 92 and 100 in the T1G Policy Guidance (click).
Cheers,
OR

Parthaab
Newbie
Posts: 38
Joined: Fri Jan 14, 2011 11:23 am

Re: Income for limited company director

Post by Parthaab » Fri Jun 12, 2015 3:28 am

Dear O_Relly, Thanks for the confident reply!
This makes a lot of difference for tax purposes. If I am allowed to show the income I have earned for my company ( instead of showing income plus dividend from the company ), then I could make my wife a company shareholder, and thus save tax - as is done regularly!

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