New changes in law and Company directors on tier 1

[crimson76]

On September 6, 2013 HO introduced Genuine earnings test for Tier 1 Extension and settlement applicants (check the following link):
http://www.ukba.homeoffice.gov.uk/sitec ... iew=Binary
Point 150 of this document deals with Tier 1 (General). It seems that these changes will have massive impact on applicants who are either self employed or working as directors of their own companies. HO will require these applicants to provide additional documents and probably invite them for an interview.
I will be applying for my Tier 1 extension next month. I am working as company director but I draw sufficient salary for required points from my company and pay all taxes and NI under PAYE scheme of HMRC. Whether these changes in the law will only effect directors who are drawing income as dividend? or the directors who draw enough income in salary via PAYE from their company will also be under microscope?

[elpis]

I am in the same boat. My extension is due after about 13 months. At present I am only getting dividends from my company as it is tax efficient. Getting salary from your own co. means you will have to pay about 40% in taxes and NI. On dividends you only have to pay 20% taxes. You need to find out whether drawing salary from your own co., will give you any advantage in terms of HO scrutiny? I think because of Real Time Information system of PYE scheme of HMRC is now operative, probably, it will be easier to verify salary income from HMRC for case workers. Probably there will be lesser chances of CW asking for additional documents. Can experts and gurus on this forum please shed some light on the pros and cons of salary versus dividend income for company directors from the perspective of these new changes ?

[crimson76]

Thank u Elpis. Do u think that Case workers consider salary income more credible compared to dividend income? Can experts on the forum please share their opinions?

[Bhaskarnu]

The Genuine Earnings Test has nothing to do with the Salary and Dividends. As a Director of the company, we might need to show - the funds into the Business Bank Account is from a valid source.
As the Tier 1 General has been abused by few people with fake funds deposited by third party, UKBA has come up with this test.

Lets wait and see what documents are requested by UKBA. A Director, who originally get proper funds, should end up with couple of more documents.

[Khurrum_Khan]

I think New policies of the Tier 1 general doesnt apply to ILR as statement says " entry clearence + Leave to remain".....

Leave to remain means extension . not ILR...