Commercial property investment

[rahul190]

Goodwill £30k, fixture & fittings £20k.

Which amount Ho does count under £200k investment?

[marcnath]

Ok. You have some complex things going on. So let's go back to some basics.

You showed 200K for your initial application - was that in your own account or 3rd party funds ?

Was that in UK bank or foreign banks ?

[marcnath]

Goodwill £30k, fixture & fittings £20k.

Which amount Ho does count under £200k investment?

Neither are investments

[marcnath]

Basically, money taken from business account to personal account and reintroduced again from personal to business account either in same business account and 2nd business account, can count that fund under 200k which has gone from personal to business?, also, having drawing amount on accounts is necessary because some final accounts has no drawing amount mentioned even if there is drawing. Is it possible?

Yes, under some conditions. But need more info

[rahul190]

200k was on my own account,

130k was shown in uk and rest in overseas account (overseas account was under my name)

No third party involved

[marcnath]

According to account

1. Business A capital introduced £110k after profit share amount £5k, total money withdrawn £115k and introduced to business B, entry from business to business, so business A investment count 0

Correct. Investment is 0.
What is the timeline for this ? Which month did you withdraw the amount ?
Was the investment to business B as share or DL ?
Did you own business A 100% ?

2. Business B, capital introduced £115ik to bus. account 1. From business account 1 to my personal account £50k transferred and then from personal account to bus. account 2 it has been transferred. But because money was taken by me as in personal account, my accountant put that £50k as drawing into final accounts. And solicitor disagree to count that £50k investment under £200k because it shows as drawing.

Any suggestions like could this £50k will be count by ho or not ?

This is a lot more confusing.
In principle, the 115K is investment. But it is a transfer from one business account to another, so you need to provide good evidence.
Did business B generate revenues and if so, how much ?

[marcnath]

200k was on my own account,

130k was shown in uk and rest in overseas account (overseas account was under my name)

No third party involved

Ok. So far, you had 5K of that money invested in Business A.

Has the remaining 195K been in the same accounts throughout Or can you show that amount was in some accounts of yours for the full 3 years + ?

[rahul190]

Time line

Approved Aug -14, transaction 110k done by Dec 14 from personal to business

Money was into same business account from business A to B, same business account has only business name & address has changed, so money stayed into same account

business A & b both are partnership firms, as evidence got bank letter confirmation that same partners stayed into business account an address & name has changed

Business A has 110k which was out of 195k plus
Business B has 68k capital introduced out of 195k which I count because entry of that money was from personal to business after business A sold and before business b started

[rahul190]

Both business has loss

[marcnath]

Time line

Approved Aug -14, transaction 110k done by Dec 14 from personal to business

Money was into same business account from business A to B, same business account has only business name & address has changed, so money stayed into same account

business A & b both are partnership firms, as evidence got bank letter confirmation that same partners stayed into business account an address & name has changed

Business A has 110k which was out of 195k plus
Business B has 68k capital introduced out of 195k which I count because entry of that money was from personal to business after business A sold and before business b started

Ok. Looks like I misunderstood one of you earlier posts. Let's see if I get it right. Two transactions seem to be usable for investment
1. 110K in business A
2. Additional 68 K invested into business B

Few more questions.
1. You are left with 22K to be invested. Is that still in your personal bank account ?
2. When was business A closed ?
3. Are the other partners also T1E visa holders (if they are, are they part of your entrepreneur team)
4. How much revenue did Business B generate before you transferred the 50K ?

[rahul190]

1. 110k as you said is usable but it has shown as drawing in business A final accounts. And because money stayed into same business account, its didn't go to business B via my personal account, my solicitor doesn't count that under 200k, as mentioned earlier it counts 0 inv in business A

2. I have changed business entity after april, 17(same partnership business converted to company). So company C has further capital introduced by me from personal to business account of company C as £40k and money has been spent into company C

3. July 15. Business A closed

4. Other partner is British, he has got nothing to do with HO

5. Have got no figure for that but business B started Jan, 16 and 50k partially transferred int April, 16 and rest in July, 16.

[rahul190]

Any answer please??

[marcnath]

You have obviously complicated things a lot by the way you set things up and operated it. So, irrespective of where you get to, this will likely be one application that will likely be under the HOs "complex" category.

You have to satisfy HO of two things:
1) You have had access to the 200K you showed initially throughout the last 3+ years. You have explained 178K. So there is 22K more to be explained.
2) You should have invested 200K in your name in one of more businesses. And this is still not clear.

Where there is a grey area is that these two are expected to be the same, but does not need to be. In straightforward cases, I don't think HO will bother, but in your case, they may.

I am still confused about your investments:
1. You invested 110K from your personal account to business A
2. 115K was transferred from business A to business B
3. You added another 68K to business B from your personal account
4. You also invested 40K from your personal account to business C.

So, there seems to be a total of 218K from your personal account to the three businesses. That should meet your requirements and there is no shortfall.

What am I missing here ? Are you struggling about how you show this ?

[rahul190]

Yes'm, I'm struggling to show below point, as

Point 2 you mentioned

115k transferred from business A to business B without interfering personal account, how can I justify that under 200k?

[marcnath]

Yes'm, I'm struggling to show below point, as

Point 2 you mentioned

115k transferred from business A to business B without interfering personal account, how can I justify that under 200k?

Is that the only thing you are struggling with - are the others ok ?

The rules do not say that the transfer has to be from a personal account.

Without looking through all the documents, I can't give you an answer. But, the simple thing is that you transferred money from your personal account into a business and you have not taken it out.

So, it meets the criteria and it should be possible to structure the documents to show that to HO.

[rahul190]

Business A has £130k capital introduced by me

Cost of sale(profit & loss account) has purchase of £133k

Business account statements has limited entries just one or two pages,

Major entry of £86k look like has been paid to solicitor, other entries has not major justification of paying invoices by rest of fund from bank, it was by internal money made by business

Can I argue 130k investment for 133k purchases into business?

[rahul190]

Urgent attention please?

[marcnath]

Business A has £130k capital introduced by me

Cost of sale(profit & loss account) has purchase of £133k

Business account statements has limited entries just one or two pages,

Major entry of £86k look like has been paid to solicitor, other entries has not major justification of paying invoices by rest of fund from bank, it was by internal money made by business

Can I argue 130k investment for 133k purchases into business?

Rahul - your numbers keep changing making it very difficult to keep up.

It was GBP 110K to business A, now it is 130K.

But to your question on whether purchases can be investment - that depends.

The simple way to look at it is that you must have transferred (or spent for the business) 200K of your own money. If you have done that and can have evidence for that, then it is a matter of structuring your accounts, your documents, etc. to show that in the form HO needs.

If you haven't, there is no point trying to work around it.

[marcnath]

Urgent attention please?

Appreciate the pressure you are under and I am sure everyone who can help will. But, if you haven't got a reply it is just that either people don't have the answer or they are busy.
It is not very polite to do this kind of pushing.

[rahul190]

Okay,

Another question I have in regards to National insurance contributions, in last 3 years I have paid one NI bill under first business, after that Ni has not been paid.

To meet evidence of current registration UTR number issued by HMRC at the start of self employment does that meet this requirement?

Or

Ni has to be paid by direct debit to meet this requirement ?( bill since last ni paid till 5 April, 17)
Because it takes 21 days to set up, I prefer to pay by online baking for now and not to take risk for setting up direct debit due to shortage of time

Please advise can I pay ni by online banking or do I have to set up direct debit for that to meet requirement?

[marcnath]

Okay,

Another question I have in regards to National insurance contributions, in last 3 years I have paid one NI bill under first business, after that Ni has not been paid.

To meet evidence of current registration UTR number issued by HMRC at the start of self employment does that meet this requirement?

Or

Ni has to be paid by direct debit to meet this requirement ?( bill since last ni paid till 5 April, 17)
Because it takes 21 days to set up, I prefer to pay by online baking for now and not to take risk for setting up direct debit due to shortage of time

Please advise can I pay ni by online banking or do I have to set up direct debit for that to meet requirement?

I thought you had a Ltd company of which your are a director ?

That should be sufficient for current registration

[rahul190]

Business A and business B were partnership,

Business B changed entity from partnership to company(same business changed to company)

So national insurance paid by direct debit or online / telephone banking does not have any impact on my application, prefer to pay Ni since last ni bill till 5 April, 17 by online banking, okay? (Company incorporated in march, 17)

[marcnath]

Business A and business B were partnership,

Business B changed entity from partnership to company(same business changed to company)

So national insurance paid by direct debit or online / telephone banking does not have any impact on my application, prefer to pay Ni since last ni bill till 5 April, 17 by online banking, okay? (Company incorporated in march, 17)

NI payment has no impact on the application. As long as you have paid an NI that is due - does not matter which method you use to pay it.

[rahul190]

Thank you for your advise.

[rahul190]

Also, as I mentioned business entity changed from partnership to company,

On google while searching business, old partnership name has been appeared and because company has been set up since march this year, new details has not been updated on google. Having old business name screenshot would be fine for geographical location proof ?