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Evidencing the investments

Only for UK Tier 1 (Entrepreneur) points system

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ceobot
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Joined: Wed Jul 20, 2011 4:42 pm

Evidencing the investments

Post by ceobot » Wed Feb 15, 2017 11:03 pm

I checked a lot of topics on this forum which are related to Investments supporting documents, but still can't find the proper answer.

I am currently preparing my Accounts covering three years 2014, 2015, 2016 (the extension is due in April 2017).

In all 3 Unaudited accounts I have the same situation.

On the "Balance sheet" my investments are marked as:
Creditors:amounts falling due within one year ----> and then the total amount including other creditors not just my own.

On the Notes to the Financial Statements it is marked as:
Director's current accounts ----> and then the total amount invested. in 2014 it was £4K, in 2015 it was £25K and in 2016 it was £51K+.

I was the only director of the company for 3 years. For each year I have the cover letter from the accountant confirming the total amount of invested money. I have bank statements confirming all transfers for the full amount of money.

BUT!!!!

Due to paragraph 138(1)......accounts must show the investment in money made directly by the you, in your own name or on your behalf (and showing your name)

I am totally confused with this. When I asked my accountant to add my name to the accounts instead of "Director" 3 years ago she told me it is not possible to do because she is submitting everything in software and can't change the name of fields.

What you guys think about this ? Maybe somebody have experience with the same issue ? Would my application be refused for not having my name in it even considering the fact I can confirm the investments with so many additional documents.

any help will be much appreciated because I can't find any proper answer. Thank you.

sm12
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Re: Evidencing the investments

Post by sm12 » Wed Feb 15, 2017 11:44 pm

From what I understand, it is possible to manually add statements about the loan in the accounts, though this may vary depending on the software.
However, if she cannot add this line and you do not want to approach another accountant to prepare management accounts for you, perhaps you could write a cover letter explaining that you are the only director, and therefore the director's loan could only yours.

However, one thing that stood out from the information that you provided was that the loan is listed under 'Creditors falling due within one year'. Now I don't think there is any rule about the term of the loan, but it may raise questions in terms of how genuine your investment is. I would imagine the HO expects a long term loan. This can be corrected by the accountant if you wish to change it, though technically it still meets the HO requirement as per the rules.

Please be aware that an accountant's letter confirming investment will add no value to your application. The HO expects your accounts to confirm the information about the director's loan, in addition to the bank statements and loan agreement.

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Zimba
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Re: Evidencing the investments

Post by Zimba » Wed Feb 15, 2017 11:50 pm

You accountant MUST be able to add your name opposite the loan in the NOTES section
http://www.immigrationboards.com/uk-tie ... l#p1345481
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ukbiz
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Re: Evidencing the investments

Post by ukbiz » Thu Feb 16, 2017 12:02 am

[quote="ceobot"]

On the Notes to the Financial Statements it is marked as:
Director's current accounts ----> and then the total amount invested. in 2014 it was £4K, in 2015 it was £25K and in 2016 it was £51K+.

Simply add a small paragraph in notes section 2016:

The Director Mr (Your Name) has invested 51K into his business through Director Loan which is unsecured and subordinate in favour of third party creditors of the company.

ceobot
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Re: Evidencing the investments

Post by ceobot » Thu Feb 16, 2017 12:56 am

ukbiz, zimba88, sm12 - thanks for your reply guys.

Yes, I am very suspicious regarding this 'Creditors falling due within one year". Again from my accountants words this is a standard field. My Loan agreement is showing term of 3 years.

Regarding my name on accounts I will contact her and ask to add it to the "notes". Not sure how it can be done considering the fact that accounts for the last 3 years were submitted already.

But I will definitely update this topic because I think a lot of people are still confused with this.

sm12
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Re: Evidencing the investments

Post by sm12 » Thu Feb 16, 2017 1:11 am

It is possible to add other fields like for amounts falling due after 5 years, etc.
Talk to her about it, I am sure a correction can be made regarding this.
If your loan agreement is showing three years, then you must get this discrepancy corrected as the HO could question you about it.

As for adding the name, it is not a problem that the accounts were already submitted. Management accounts often contain extra information (other than what is required for statutory accounts). So if she adds your name now, it will not be an issue.

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