Tier1 extension; Contracting; Limited company.

Friends,

I am on Tier-1G, and my visa expires in early Jan 2013. I am in a contract job, and I am from this current month switching from umbrella company to my own company, so I have formed a company.. I am the director of the company and the only share holder. I am also going to be the only employee of my own company. I am going to keep working on this contract job. I am totally new to this company concept and in context of Tier-1 extension. I am about to see an accountant soon, so can you be so kind to guide me what are the things I need to ensure, and explicitly demand/inform the accountant?

I’ve had a brief conversation with this accountant.. he does not know anything about Tier-1 extension requirements.. he wants me to tell him what my requirements are and he is willing to act accordingly. Is this fine or would you recommend me to go to an accountant that has experience of dealing with Tier1 visa holder clients?

Do you advise me to tie up with an immigration lawyer as well? Did you do so?
I also learn from another thread that there are two cases: either you can be a sole trader operating in a business structure or an employee/director of the registered company. What is a sole trader?

Sorry for being naïve, but I do not want to victimize myself at any point by keeping myself uninformed or by assuming anything.

Thank you very much for your kind advice.

FROM home office point of view if gap in yr present earning by paye is of more than £10,000.00 than ltd company way is good other wise sole trading

rate of tax in ltd is 21 %

in sole trader 20 + 8% ni on profits 6000+ onwards

you will be ok by ltd way

Sushil-ACCA wrote:if gap in yr present earning by paye is of more than £10,000.00 then

Mate, thanks for these information. Really appreciate you trying to help. But, really don't understand this line above. Can I request you to try to explain it again? Thanks

Also to add to above of my queries.. I am hearing that the accountant must have specific qualifications.. The accountant that I am thinking to go for.. I learn from his card that he is an FCA. Would this be ok?

Mates, my above queries though they look too many, I am sure they're very easy for many of you who have gone through this already. Please, I request you to shed your kind advice on my queries and thus rescue your mate (me)!

An FCA is a Fellow of the Institute of the Chartered Accountants in England & Wales so you are more than fine there.

I am about to see an accountant soon, so can you be so kind to guide me what are the things I need to ensure, and explicitly demand/inform the accountant?

Ensure they are suitably qualified (though you've done this), find out what services they offer and ensure that they know what they need to do for both your company and also for when you renew your visa. If not just get some confidence that they will be able to find out easily enough.

I’ve had a brief conversation with this accountant.. he does not know anything about Tier-1 extension requirements.. he wants me to tell him what my requirements are and he is willing to act accordingly. Is this fine or would you recommend me to go to an accountant that has experience of dealing with Tier1 visa holder clients?

It depends! It obviously helps if the accountant does know but if s/he doesn't immediately then just ensure that they have the resources to find out - it shouldn't take too long to look anything up. Of course I'm sure there are those that disagree with me - it's just my opinion.

Do you advise me to tie up with an immigration lawyer as well? Did you do so?

Not really for me to answer as I've never needed one(!)

I also learn from another thread that there are two cases: either you can be a sole trader operating in a business structure or an employee/director of the registered company. What is a sole trader?

A sole trader is an unincorporated business that is run by one person. You are the business and the business is you basically - unlike a company which is a separate legal person. If you are still considering the sole trader route vs company route, it is very important to do some research first. Try here for starters:

http://www.businesslink.gov.uk/bdotg/ac ... 1073858805

Matt and all,

Thank you very much for your kind help.

In the context of Tier-1 extension, I will inform the accountant that I would need a letter from him during the time of my extension application, confirming the gross and net pay for the period claimed and also mentioning breakdown of salary, dividends, profits, tax credits and dates of net payments earned. My earnings will comprise of salary and dividends. I understand that I would need two proofs for each. One proof would be the accountant letter. Second proof for salary would be personal bank account statements and payslip? (FYI, I would effectively be paying myself a salary, so should I generate payslips?). And, second proof for dividend earnings will be dividend vouchers? Any other proofs I’d need for earnings? I hear, the client invoices, is that right? (A bit unclear to me why invoices are needed because they reflect on my limited company’s earnings, not mine).. what do you say? And, any other proof?

Anything else I need to tell the accountant in terms of extension?

If you are still considering the sole trader route vs company route,

I did not think of the sole trader route until recently because I did not hear of it. The company that I recently formed is an incorporation. Now that I heard of the sole trader route, I felt to inquire about it, and whether it is worth going for. What do you advise, which route?

One question for Matt, if I may ask. Since you’re an accountant as I assume, what is your qualification, and is it good for Tier1 formal requrements? Do you have experience of having Tier1 clients?

Thank you very much Matt and all for your kind help

No worries mm11!

Now that you have gone down the incorporation route it's probably worth concentrating on that. The last thing I want to do is either complicate things needlessly for you or tread on your accountant's toes though so if you do have any questions in that area then do ask them. They'll know more about your situation and aims than anyone on here so do consider any advice given. As to which is better between sole trader and limited company is really down to what your main aims are - there are pros and cons to both.

I'm a qualified accountant (ICAEW) and do have experience with Tier1 items. However your accountant will be also able to help you in this area as they meet the UKBA's requirements for an accountant/managing agent; if they have any questions when preparing your documents just refer them to the UKBA website as it is pretty easy to follow (although again I'm sure not everything would agree with me!)

Matt and all,

Thank you very much for your kind support! Some doubts still remain, which are in context of visa extension and accountant cannot guide me on them. They're as follows. Can you possibly please advise on them?

- For the extension application, would I need to show invoices? I doubt this because of the fact that invoices are evidence of my limited company’s earning, not mine (Is that right?). (My earning would be reflected by payslips & dividend vouchers, not by invoices.. correct me if I am wrong).

- I understand that when we’re employees in a company and we show payslips as evidence of earning, they probably contact the employer to verify the received salary. But when I am employee of my own limited company, would they contact the limited company to confirm the received salary & dividends?
I ask because soon I am planning to change my company address to my accountant's address. Can this be any issue in terms of extension application? Would they contact that address?

Thanks again!

1. Read the policy guidance to understand the documents required to be submitted by an applicant who is "self-employed".

2. UKBA may undertake any verification that they may deem necessary and contact anyone relevant to the application, given the merits of your application.

Rather than asking if UKBA will / will not contact the registered address of your limited company / your accountant, I believe you should instead check if you can register the address of your company as the address of your accountant's office. If there is no legal restriction that prevents you from doing so, the question you are asking is irrelevant. Your accountant should be able to advise you on the issue.

Nothing stopping you legally from having the registered office at your accountant:

http://www.businesslink.gov.uk/bdotg/ac ... =RESOURCES - just in case if you or others fancy reading up on it.