Director Salary

[lanzhou1]

Hi Gurus,

I have a question.

I applied Tier1 Entrepreneur two years ago with 200K investment into an existing company.

I claimed a very reasonable salary for 1200 / month from the date I started ( 2 years ago)

I now understand that all the salary paid to myself can not be considered "invest"

My question is, what should I do now...If I stop to claim salary from the company and invest more (for example 50k, which is more than the salary I claimed) into the company as an unsecured director loan, will this sort out the mistake I made and get the extension ?

many thanks for reading my question.

[zimba]

Hi Gurus,

I have a question.

I applied Tier1 Entrepreneur two years ago with 200K investment into an existing company.

I claimed a very reasonable salary for 1200 / month from the date I started ( 2 years ago)

I now understand that all the salary paid to myself can not be considered "invest"

My question is, what should I do now...If I stop to claim salary from the company and invest more (for example 50k, which is more than the salary I claimed) into the company as an unsecured director loan, will this sort out the mistake I made and get the extension ?

many thanks for reading my question.

Depends. If the salary you received came from your investment, then that is director's remuneration which will not be counted as investment. However if the salary was paid from profits generated, you should be fine.

[lanzhou1]

Hi,

The company did not make much money yet so I assume it is come from the investment.

So will it be ok if I just invest more into the company?

thanks

[zimba]

Hi,

The company did not make much money yet so I assume it is come from the investment.

So will it be ok if I just invest more into the company?

thanks

You better do, as the money you have taken so far as salary will not count as investment. The money must be invested to run the business not to be paid back to you as salary or dividends.

[lanzhou1]

Thanks...

Another questioni.

When I invested, I transferred the money into the company's account in 3 installments during the past 2 years.

first time is when i registered as director : 80k

6 months later : 80k

and one year later: 40k

is this ok? Is there any time limitation for the funds be transferred into the business account?

thanks

[zimba]

Thanks...

Another questioni.

When I invested, I transferred the money into the company's account in 3 installments during the past 2 years.

first time is when i registered as director : 80k

6 months later : 80k

and one year later: 40k

is this ok? Is there any time limitation for the funds be transferred into the business account?

thanks

You need to invest all 200K fully within the first 3 years.

[Mahir1108]

If my accounts for 1 year states that
Directors Loan - 30K
Company Expenditure - 30K
Revenue / Sales - 10K
Director salary - 10K

How much investment will be considered in this scenario

[zimba]

If my accounts for 1 year states that
Directors Loan - 30K
Company Expenditure - 30K
Revenue / Sales - 10K
Director salary - 10K

How much investment will be considered in this scenario

If you loaned the business 30K and all was spent running it, you are fine. However what you spent it on cannot be Director's remuneration (as salary or dividends), buying business in any form from previous owner(s), spending on property investment or property management.

[lanzhou1]

I guess your investment will be 30k

director loan 30k, no matter you spent all of it or spent 20k and have 10k cash in account, it will still be 30k

and the revenue can cover the salary.

[kingraja]

I have 1 question to all my company was in profit during 1st year & I took 5000 director salary from profit but 2nd year my company was in loss of 13000 & I took 5500 director salary as well & in 3rd I think I will make some profit again my question is if director salary is remuneration then how much I should transfer to business account again only 2nd year 5500 or all 3 years director salary as 2nd year loss was around 3 year director salary..thanks

[ishfaqsangra]

@Zimba you stated above money should not be taken back as salary or dividend.Why not dividend? I understand salary but unable to understand that even enterpreneur cant take dividend if business is profitable?
I think remeneration excludes dividend?

[FKS21177]

Hi Zimba88.... How do we show/prove that director salary is coming from profit or investment? this is so confusing, is there any way we can explain to case worker or case worker will judge it himself ??

I have a question.

I applied Tier1 Entrepreneur two years ago with 200K investment into an existing company.

I claimed a very reasonable salary for 1200 / month from the date I started ( 2 years ago)

I now understand that all the salary paid to myself can not be considered "invest"

My question is, what should I do now...If I stop to claim salary from the company and invest more (for example 50k, which is more than the salary I claimed) into the company as an unsecured director loan, will this sort out the mistake I made and get the extension ?

many thanks for reading my question.[/quote]

Depends. If the salary you received came from your investment, then that is director's remuneration which will not be counted as investment. However if the salary was paid from profits generated, you should be fine.[/quote][/quote]