Understanding Director Loan & Salary

[Amz]

Hi All

Can you please help with with following questions:

1. I need to know if my Director's Salary would be
deducted from Director's Loan amount if my Business is in Loss.

To give you an example I have 2 employees and myself as director and all of us
are on salaries.

Year 2017-18

Director's Loan: £50,000
Revenue: £75,000
All Salaries Including: £48,800
Expenditures (Including Marketing, Advert, etc etc): £31,000

Final Balance: £45,200

Now the salaries are part of the revenue my business generated but someone mentioned
that since my business is in Loss (£45,200 - £50,000) so the difference of £4800 would be deducted
from my director loan as I have taken Salary as a director.

Someone else told me since my Final Balance is £45,200 so my business cannot be
in lossess, and my salary is part of my revenue and my expeditures are deducted from
revenue and director loan both

I need to know what is the true picture on this scenario. Do i have to maintain
my final business balance above £50,000 If my business is in loss and I am taking
salary as a Director or would this not matter at all ?

2. My other question is, I want to privately invest my savings in shares, equities etc. Since
there is capital gains tax applicable and I want to keep it all clean and lawful, I was wondering If
I register another company and make my investments via that company so that I can seggregate the profits and keep
them separate from my current IT business. Under Tier 1 Category, Am I allowed to do this ?

** Just to make it clear, all investments would be my personal savings and no public money would be involved and that will not
be my primary business as part of my Tier 1 Application.


** I have already applied for Tier 1 EXT back in March 2017 and i need the answer to these questions leading up to my ILR next year. My current visa application is still with HO and I don't know the outcome yet.

[marcnath]

Quite a few misunderstandings.

First, since you have already applied for your extension and assuming that is approved, there are no investment conditions for your ILR any more. You will get your points for the investment attribute on the basis that it has been already awarded on extension.

Secondly, on your example, there is no need to top up (this is anyway only applicable for extension, not ILR). There is no requirement that the investment amount should be left in the bank account.In fact, to the contrary, the expectation is that the investment WOULD be spent to grow the business. Somewhere in the guidelines, there is a statement that mentions money left in the business account cannot be counted towards investment.

You can create as many companies as you want and carry out any legal businesses under those. There are no restrictions. Unrelated though, I don't think there is any tax benefit doing your investments through a company. When done personally, you have a capital gains allowance that the company would not have.

[bizman]

In addition to Mcnaths submission, I assume you submitted a final account with your application. This is sufficient to prove your investment along with the Director Loan agreement assuming the rules are followed. Good luck.