ILR financial requirement as Director of LTD company

[Solidjim7]

My and my wife are finally coming to the end of our 5 year route and will be able to apply for ILR in June next year…

I am British and I’m the director of the LTD company that employs both of us.

What I can’t work out is how the limited company income is calculated for the financial requirement.

Is it taken as the companies income before our salaries and expenses are taken out or is it just the end of year profit?

[zimba]

It is about YOUR personal income, so whatever you both earned.

Check 'Director or employee of a specified limited company in the UK – specified evidence' in the guide: https://assets.publishing.service.gov.u ... rement.pdf

[Solidjim7]

Okay thank you. I’ve read that section of the appendix but I still cant work out how it calculates our income. Am I able to combine the salary that we pay ourselves with the company profit or can I calculate the company profit before our salaries and expenses?

[asingh42]

Okay thank you. I’ve read that section of the appendix but I still cant work out how it calculates our income. Am I able to combine the salary that we pay ourselves with the company profit or can I calculate the company profit before our salaries and expenses?

A ltd company gives you income in 2 ways, firstly through employment via payslips and secondly through extraction of funds in the form of dividends. So the income you count is your salary plus any money you take out of the company as dividends. You need to ensure the dividend is legal meaning the funds that you declare as dividends are in fact available within the company to be extracted. The company's profits are not your own income.

[asingh42]

Okay thank you. I’ve read that section of the appendix but I still cant work out how it calculates our income. Am I able to combine the salary that we pay ourselves with the company profit or can I calculate the company profit before our salaries and expenses?

Further you need to provide several documentation to HO for a limited company like CT600 return, Tax overview, Accountants Report, Tax Computations, Director Appointment Letter, Dividend vouchers, Proof of Registration with HMRC for PAYE, Company Bank statements.

You as individual will have to give payslips, Bank statements, SA302(Personal Tax return), P60 etc.

Speak to your accountant for further information as you will also need a letter from your accountant confirming the above.

[Solidjim7]

Okay thank you for this detailed explanation…

And do you know if I can combine my salary + dividends + other income as a sole trader?

As for the first half of this financial year I was operating as self employed, not limited company…

So in order to meet the financial requirement I need to combine all 3 incomes…

[zimba]

Okay thank you for this detailed explanation…

And do you know if I can combine my salary + dividends + other income as a sole trader?

As for the first half of this financial year I was operating as self employed, not limited company…

So in order to meet the financial requirement I need to combine all 3 incomes…

Any income claimed must be in the same period (i.e tax year or accounting year)

[Solidjim7]

Okay thank you. So does that mean I can include spoke trader income as long as it was earner in the same period? E.G 01/05/22 - 01/05/23

Even though the sole trader tax year runs runs April the 5th?

[zimba]

Okay thank you. So does that mean I can include spoke trader income as long as it was earner in the same period? E.G 01/05/22 - 01/05/23

Even though the sole trader tax year runs runs April the 5th?

No. It means you any income earned in an April-to-April tax year may be added to other income earned in the same exact tax period

[Solidjim7]

Okay thank you.

The problem is, my company tax year is May to May but my personal tax year is April to April.

So how can I combine them?

Sorry to keep not understanding. Really appreciate the help!

[zimba]

I think you cannot combine them as documentary evidence is only produced for a fixed period. The guidelines suggest that if you need to do this you should align the tax years: indefinite-leave-to-remain/can-sponsor- ... l#p2141143

[Solidjim7]

Okay.

Can I combine my salary, which is paid by my limited company, with the limited company profit?

[zimba]

Okay.

Can I combine my salary, which is paid by my limited company, with the limited company profit?

I suggest reading the guide I shared above again. Your company profits are not your income. You can only claim income for what you earned and paid yourself so your salary, any dividends, etc over the period covered in the CT600. You also need to provide specific evidence as explained under category F/G sections