Dividend (ltd company) - financial requirements

[humzah123]

Hi,

I am a contractor trading through a limited company. I am a director and my wife is director too.

I was in full time employment but have been contracting for last 3 months. I pay a very nominal salary, around £9000 and then pay dividends to myself, around £2000/month. My wife get the same salary and dividends.

I am on ILR 10 years basis and my wife is still on PBS migrant and is out of the country so need to get spouse visa outside of UK before she can enter back in the UK. She qualifies for 10 years long residency on her own merit as well but unfortunately can't apply until she is back in the UK.

I have following questions:

1) I want to know that am I considered self employed or employed?

2) I had this limited company for nearly 3 years but I was not trading through it. I was employed full time all through that time. Does that have any effect as I can only show income for last 3 months through this company?

3) I read in statement of intent that for limited company I have to show last 12 months accounts. Does that mean that I do not fulfill financial requirements as I have only been earning significant amount from last 3 months only?

Can you please clarify this.

Thanks

[harv]

Not sure if I can answer all your questions.

I am also company director and recently sponsored my wife on a out of country spouse visa.

1) You are considered employed as you have set salary and getting payslips (from you accountant).

2) It should be fine as long as you can show your regular income from your new employment (your company) in the form of payslips and dividend vouchers.

3) Since your company have been trading for the last three years, you will need to supply last years accounts. To show that your earnings are better from last 3 months onwards due to change of circumstances add in projected accounts for the next accounting year.


You should explain your situation on a cover letter, or better ask your accountant to write a cover letter just giving details that you have started working full time for the company since the last three months.

[humzah123]

Thanks for clarification.

I want to confirm that can I use dividends towards satisfying 18,600 income requirement? I have tried to find the answer in ukba guide but couldn't understand if dividends of the company you are running counts or not.

[asim72]

Dividends are dividends. Who runs the company does not matter. It could be you or some guy running the company remotely from north pole.

[harv]

Thanks for clarification.

I want to confirm that can I use dividends towards satisfying 18,600 income requirement? I have tried to find the answer in ukba guide but couldn't understand if dividends of the company you are running counts or not.

Yes dividends are counted inside the salary requirements as well.

To show as an evidence, get the dividend vouchers from your accountant and also a letter outlining the last 6 months of dividend issued to you by your accountant on a company (accountant's) header letter.

If you can get a Tax details letter from HMRC that would be even better.

[humzah123]

I was just reading financial requirements document on ukba site and came across self-employed - limited company based in UK. How is this different from salaried employment as a Director and share holder of the company? Do I need to provide these evidences as well?

Thanks

5.5.4 In respect of self-employment – limited company based in the UK: all of the following must be submitted:
•
Evidence of registration with the Registrar of Companies at Companies House.
•
Latest Notice to file a Company Tax Return – CT603 and Company Tax Return – CT600. Both parts must be supplied.
•
Organisation’s latest audited annual accounts with the name of the accountant clearly shown. The accountant must be a member of an accredited accounting body (CIMA, CIPFA, ACCA, ACA, etc).
•
Monthly corporate/business bank statements covering the same 12-month period as the tax return(s).
•
Monthly personal bank statements covering the same 12-month period as the tax return(s). These statements must show that the income from self-employment has been paid into the person’s account.
•
Evidence of ongoing self-employment: for self-employed persons, evidence of payment of Class 2 National Insurance contributions. For Directors, Current Appointment Reports from Companies House.
One of the following documents must also be submitted:
•
Certificate of VAT registration and latest VAT return confirming VAT registration number if turnover in excess of £73,000.
•
Proof of ownership or lease of business premises.
•
Proof of registration with HMRC as an employer for the purposes of PAYE and National Insurance. Proof of PAYE Reference Number and Accounts Office
18
Reference Number. Evidence of registration must be original or certified copy of documentation issued by HMRC only.
•
Proof of registration with the London Stock Exchange or with an international stock exchange approved by the Financial Services Authority in the UK. This is a mandatory document for a company registered on the London Stock Exchange or an FSA-approved international stock exchange.

[harv]

If you are working through your limited company as a director, you should satisfy these requirements by providing the relevant documents you listed above.

[tamilmaran]

Please note that your Accountant must be an ACCA Registered Account, else your application will be rejected.

[bobobo]

Hi, just checking do I need to give all this info for an incountry application as well. I am director too. I just gave Myand Missus's 2 years bank statements. Along with my management accounts prepared, signed and stamped by my accountancy firm and also included a p-60 which was issued to me in 2010, but didnt provide majority of the information mentioned here though the management accounts do ahve the company and Vat registeration number(s)

thanks in advance for clarifying this

I was just reading financial requirements document on ukba site and came across self-employed - limited company based in UK. How is this different from salaried employment as a Director and share holder of the company? Do I need to provide these evidences as well?

Thanks

5.5.4 In respect of self-employment – limited company based in the UK: all of the following must be submitted:
•
Evidence of registration with the Registrar of Companies at Companies House.
•
Latest Notice to file a Company Tax Return – CT603 and Company Tax Return – CT600. Both parts must be supplied.
•
Organisation’s latest audited annual accounts with the name of the accountant clearly shown. The accountant must be a member of an accredited accounting body (CIMA, CIPFA, ACCA, ACA, etc).
•
Monthly corporate/business bank statements covering the same 12-month period as the tax return(s).
•
Monthly personal bank statements covering the same 12-month period as the tax return(s). These statements must show that the income from self-employment has been paid into the person’s account.
•
Evidence of ongoing self-employment: for self-employed persons, evidence of payment of Class 2 National Insurance contributions. For Directors, Current Appointment Reports from Companies House.
One of the following documents must also be submitted:
•
Certificate of VAT registration and latest VAT return confirming VAT registration number if turnover in excess of £73,000.
•
Proof of ownership or lease of business premises.
•
Proof of registration with HMRC as an employer for the purposes of PAYE and National Insurance. Proof of PAYE Reference Number and Accounts Office
18
Reference Number. Evidence of registration must be original or certified copy of documentation issued by HMRC only.
•
Proof of registration with the London Stock Exchange or with an international stock exchange approved by the Financial Services Authority in the UK. This is a mandatory document for a company registered on the London Stock Exchange or an FSA-approved international stock exchange.

[humzah123]

Please note that your Accountant must be an ACCA Registered Account, else your application will be rejected.

Can any fully qualified ACCA (with over 3 years of experience) can do it or does it have to be an Accountant from an accountancy firm?

My accounts are handled by an independent ACCA accountant but he doesn't have any letter head or company so will that be a problem?

Thanks

[sal911]

Hi, I am a new member and like most others on here require help. I am not starting a new thread as my query is related to this one.

I have been a director of a Ltd company since 2003 and can meet the financial requirement via salary and dividends. After looking through FM-SE I am confident I can supply nearly all the required documents.

There are 2 issues for me which are:

1) 9(d) states The organisation's latest audited accounts

2) 9(f) states Monthly personal bank statements covering the same 12 month period as the tax return showing the income from self employment has been paid into an account in the name of the person or in the name of the person and their partner jointly.

So problem 1: The accounts that my accountant prepares and submits to companies house and HMRC are not audited as there is no legal requirement to submit audited accounts if your turnover is less than £5.6million (or some amount in that region)

Problem 2: I take my salary as cash in hand and therefore do not have my salary showing in my personal account. Although I do have some payments coming into my personal account from my business account, the majority of income is paid in cash.

So my question is will a covering letter explaining the cash in hand and also explaining the unaudited accounts suffice for spouse visa purposes.

Note: I shall submit the unaudited accounts with my application which are submitted to companies house and HMRC. My personal tax returns will show my income has been more than the £18,600 threshold for the past 3 years.

Thanks in advance

[harv]

1) Audited Accounts - UKBA complicates things all the times and this is not the first time. Majority of the small businesses file unaudited accounts to HMRC and they are legally allowed to do so. In fact I also am in a similar situation and when the time comes for my wife's ILR I will be supplying the unaudited accounts. My accountant works in an ACCA registered firm and is also ACCA accredited himself.


2) Cash in hand would be a bit of problem when showing the your bank statements. I would suggest you top it off with SA302 and a letter from your accountant explaining this. Although it would not have hurt if you had done this through your ltd company bank account.


Although I cannot say for sure what the ECO would think on the above evidence, all you can do is try to explain your situation (cover letter by your accountant) and hope for the best. ECO are not uqalified to study company's accounts, so they would have their own personal opinions regarding these applications. Hopefully a sensible ECO gets to process our (self-employed professionals) applications

[olawest]

1) Audited Accounts - UKBA complicates things all the times and this is not the first time. Majority of the small businesses file unaudited accounts to HMRC and they are legally allowed to do so. In fact I also am in a similar situation and when the time comes for my wife's ILR I will be supplying the unaudited accounts. My accountant works in an ACCA registered firm and is also ACCA accredited himself.

What is the average cost to get an audited accounts for a year.

[sal911]

Unaudited accounts cost in the region of £800. Audited accounts could be anything in the region of £3000.00 and it can be a detailed and lengthy process

[olawest]

Unaudited accounts cost in the region of £800. Audited accounts could be anything in the region of £3000.00 and it can be a detailed and lengthy process

Thanks. Mr UKBA wants limited liablity company directors/sole traders to shell out £3000 to audit their accounts annually!

Please do you know if banks accept unaudited accounts (but endorsed by an accountant) for mortgage applications for limited liability holders?

[harv]

Unaudited accounts cost in the region of £800. Audited accounts could be anything in the region of £3000.00 and it can be a detailed and lengthy process

Thanks. Mr UKBA wants limited liablity company directors/sole traders to shell out £3000 to audit their accounts annually!

Please do you know if banks accept unaudited accounts (but endorsed by an accountant) for mortgage applications for limited liability holders?

Yes, your accounts does not have to be audited if your total annual revenue is below some £5.7 Million. In fact I have just got a mortgage with my unaudited accounts. Every other instituation is well aware of the difference between audited and unaudited accounts except the UKBA, what loonies...

[olawest]

Unaudited accounts cost in the region of £800. Audited accounts could be anything in the region of £3000.00 and it can be a detailed and lengthy process

Thanks. Mr UKBA wants limited liablity company directors/sole traders to shell out £3000 to audit their accounts annually!

Please do you know if banks accept unaudited accounts (but endorsed by an accountant) for mortgage applications for limited liability holders?

Yes, your accounts does not have to be audited if your total annual revenue is below some £5.7 Million. In fact I have just got a mortgage with my unaudited accounts. Every other instituation is well aware of the difference between audited and unaudited accounts except the UKBA, what loonies...

What will you recommend to highlight this issue? Letters to Home Office Secretary, letters to MPs, article in the press?

For a limited liability director to get ILR or Tier 1 extension, all they need is to provide payslips/dividends for the past 12 months. I just wonder why UKBA wants audited accounts for spouse visa?

[harv]

Here what I propose the following:

- If applying through PEO:
1. I would take a print out of (http://www.hmrc.gov.uk/manuals/emmanual/em2781.htm), this shows that my company is exempted from audited accounts requirement.
2. I will present my unaudited accounts to the Officer and do not mention anything regarding the audit of accounts at all.
3. If questioned, I would say because my turnover is below £6.5 Million, my unaudited accounts are legally acceptable by HMRC.
4. I would also take other proofs of Corporation tax and any other revenue/expenses that match with my accounts.


- If applying by post and/or other applications where PEO is not available:
1. I would put in a cover letter in the financial requirements section outlining the relevant evidence including unaudited accounts copy.
2. I would attach a copy of the above HMRC print out (http://www.hmrc.gov.uk/manuals/emmanual/em2781.htm), and highlight that my company is exempt from providing audited accounts to to low turnover.
4. I would also take other proofs of Corporation tax and any other revenue/expenses that match with my accounts.


I am relying on the fact that if I provide full details to UKBA in terms of what has been provided to HMRC and accepted by HMRC. That evidence would be relevant and acceptable by UKBA, after all UKBA is not the controlling body on taxation and income. The fact that HMRC is able to confirm and accept the accounts should be sufficient to UKBA.


I am not saying it will be plain saling or straight forward success. However if correct print out from HMRC are provided, the evidence provided will have a bit of weight in it.

Hope this helps.

[harv]

I forgot to mention one more thing.

I would say a letter from the accountant would be best. That should mention that the unaudited accounts are legally acceptable by HMRC and in fact these are submitted to HMRC in this state.

This would put in a word from an accredited chartered accountant, so they should trust this. (hopefully).

[olawest]

I forgot to mention one more thing.

I would say a letter from the accountant would be best. That should mention that the unaudited accounts are legally acceptable by HMRC and in fact these are submitted to HMRC in this state.

This would put in a word from an accredited chartered accountant, so they should trust this. (hopefully).

Very excellent suggestion.

[sal911]

Thanks for the link harv. I had just switched the laptop on to find a good source to print from and add to my bundle. What better site than HMRC themselves!

[harv]

Although it is a good source to prove exemption from audited accounts, but by no means it is a sure success for VISA applications.

Unfortunately, UKBA is a very complex department having officers from all walks of life. So some fficers would definetly understand this bit and some might just think we are trying to trick them.

I hope that the officers take a human approach to this issue and process applications in positive manner, given that the evidence stack up.

Best of luck to everyone...

[MPH80]

Remembering this debate when it happened - the statement of change released yesterday is making an amendment to allow for those who don't require audited accounts - see para 415.

http://www.ukba.homeoffice.gov.uk/sitec ... iew=Binary

They'll come into force in December I believe.

[harv]

Nice, at least something has been made clear.

Although I think some people will still get confused by the RSB part:

If the applicant’s business is not required to produce annual audited accounts, the latest unaudited accounts and an accountant’s certificate of confirmation, from an accountant who is a member of a UK Recognised Supervisory Body (as defined in the Companies Act 2006)

Actually if the accountant is registered with the Chartered Accountancy Body, they would be considered to have the above certificate. I will check with my accountant as well, but having a quick look it seems to suggest my accountant is registered.

[sal911]

It is re-assuring to see that changes have been made to clarify the situation regarding the audited accounts requirement.

My wife submitted her application on the 9th November 2012 and up to now I was quietly confident of a successful decision. I repeatedly read through the application form and point 9 in appendix FM-SE and felt that I had supplied all the required documentation and therefore submitted the application with all the relevant documentation.

UNTIL now when my heart nearly popped out of my mouth when I realised that I had overlooked attaching my latest VAT return to cover point 9(h)(i) which states:

A certificate of VAT registration and the latest VAT return confirming the VAT registration number, if turnover is in excess of £73,000.

I have supplied my VAT registration certificate but forgot to include my latest VAT return. It is such a gutting feeling knowing I have the required info but due to my own mistake I have not submitted the document.

My questions are:

1) Is it possible to submit it now?

2) From what I have read, if the application is refused on the grounds that the required documents which are clearly stated in the immigration rules (ie. appendix FM-SE) haven't been submitted then a reconsideration is not possible. Is my understanding of the reconsideration rules correct?

3) Instead of appealing the decision is it possible to just re-apply? It seems a shorter process of achieving the same goal.

Any other suggestion are duly welcome