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Urgently! Director's salary

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boraoo111222
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Posts: 9
Joined: Fri Apr 08, 2022 6:46 pm
China

Urgently! Director's salary

Post by boraoo111222 » Fri Apr 08, 2022 7:49 pm

Hi guys

I will submit my T1 extension soon. Now I have a question need be clarified

I have invest 200K to my business account, and as director, I request my accountant to issue payslip of my salary every month, but actually I have never transfer the salary amount from business account to my personal account, whether this issue will be a problem?

My business is operate as normal, and now my business account still have 180K available. It is more than the total salary amount, whether I could explain that the director never take the salary from the investment 200K?

thank you so much for any advice.

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marcnath
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Posts: 6479
Joined: Tue Jul 03, 2012 2:27 pm
Location: Milton Keynes

Re: Urgently! Director's salary

Post by marcnath » Fri Apr 08, 2022 8:29 pm

boraoo111222 wrote:
Fri Apr 08, 2022 7:49 pm
Hi guys

I will submit my T1 extension soon. Now I have a question need be clarified

I have invest 200K to my business account, and as director, I request my accountant to issue payslip of my salary every month, but actually I have never transfer the salary amount from business account to my personal account, whether this issue will be a problem?

My business is operate as normal, and now my business account still have 180K available. It is more than the total salary amount, whether I could explain that the director never take the salary from the investment 200K?

thank you so much for any advice.
Your salary will normally be deducted from the investment amount unless you can show that your business has earned more than the salary amount. In that case, you can argue that you have used the revenue to pay the salary.

Also, since you have not taken the salary out, you can show the amount that was due to you as a Director loan back to the company, which means you have invested that back. You total investment has now become 200K + the money owed to you as salary. So there will only be some amount of NI and PAYE deductions that will be deducted from your investment.

In short, it does not appear to be a major issue but just do your documentation accordingly.
My comments are in no way meant to be advisory. I have no professional knowledge of immigration. These are based on my own experience, convictions and personal interpretation of publicly available information.

boraoo111222
Newly Registered
Posts: 9
Joined: Fri Apr 08, 2022 6:46 pm
China

Re: Urgently! Director's salary

Post by boraoo111222 » Fri Apr 08, 2022 8:43 pm

marcnath wrote:
Fri Apr 08, 2022 8:29 pm
boraoo111222 wrote:
Fri Apr 08, 2022 7:49 pm
Hi guys

I will submit my T1 extension soon. Now I have a question need be clarified

I have invest 200K to my business account, and as director, I request my accountant to issue payslip of my salary every month, but actually I have never transfer the salary amount from business account to my personal account, whether this issue will be a problem?

My business is operate as normal, and now my business account still have 180K available. It is more than the total salary amount, whether I could explain that the director never take the salary from the investment 200K?

thank you so much for any advice.
Your salary will normally be deducted from the investment amount unless you can show that your business has earned more than the salary amount. In that case, you can argue that you have used the revenue to pay the salary.

Also, since you have not taken the salary out, you can show the amount that was due to you as a Director loan back to the company, which means you have invested that back. You total investment has now become 200K + the money owed to you as salary. So there will only be some amount of NI and PAYE deductions that will be deducted from your investment.

In short, it does not appear to be a major issue but just do your documentation accordingly.
Thank you so much for your prompt reply, so it should have 2 ways to solve,1. how could I show the amount that was due to you as a Director loan back to the company? need ask my accountant to do ?2. my business account is now have 180K available, based on this, profit will more than salary amount, so it should be explained the revenue to pay the salary. am I right?

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marcnath
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Posts: 6479
Joined: Tue Jul 03, 2012 2:27 pm
Location: Milton Keynes

Re: Urgently! Director's salary

Post by marcnath » Sat Apr 09, 2022 7:21 am

1. Yes, ask your accountant
2. The balance in your bank account is irrelevant. But for the revenue to be used to pay salary, the timing is important (not just the total amount). The revenue should have come in before the month when salary was due.
My comments are in no way meant to be advisory. I have no professional knowledge of immigration. These are based on my own experience, convictions and personal interpretation of publicly available information.

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