Limited Company 2 Directors - Tier 1 extension, different dividends

[Andrew at Boox]

You should also make sure that your payslips and dividend certificates match the exact amounts paid into your personal account for your visa application. In our experience we've had clients get this wrong, only to be disappointed when they file their application. Payments in on your bank statements must equal payslips and/or dividend certificates.

[Greg@CapitalCity]

I have a limited company with 50 - 50 split between me and my wife.

If you prepared your application based on company profits rather than salary/dividends paid, would that help you get the required earnings. An immigration adviser will be able to discuss with you the merits of this approach.

[ISingh]

No Dividends paid to 2nd share holder-company dissolved

Hi Guys,
I am worried about UKBA doing checks for previous application. can you please take few minutes to read my issue and advise if it can be an issue for me in my next application: (Apologies for the long note below but I wanted to explain it in detail for a clear picture)

I have been in the UK under HSMP (Obtained in January 2008) and then got extensions under Tier 1 General. I actually have to take another Tier 1 general EXTENSION as I went out of UK for a couple of months and I dont meet the 180 days outside UK criteria to be elligible for ILR now.

My issue:

During the last Tier 1 Extension I showed Income proof (Dividends) from my Limited company (1st 3 months when I was working in a contract job through my own ltd Co. as Director) Plus Salary Slips from a Permanent Job for the next 9 Months. (Left contracting and took a permanent job)
Totalling earnings earned in 12 months prior to my extn application. I successfully got the extension under Tier 1 General.

The issue is: My Limited company had 1200 shares. 1000 allocated to ME and 200 allocated to another share holder.
During the last Tier 1 Extension, I took all the 100 Percent Dividend and didnt pay any dividend to the share holder. I showed all dividend paid to me in application to UKBA
Actually I had discussed it with my accountant and we had decided to transfer all shares on my name at the end of the year when we had to actually file all returns to HMRC and close the company as I had gone into a permanent job and didnt need the Ltd company anymore.

So, I got the Extension that time and asked my accountant to close the company. He started the company dissolving process but somehow we missed transferring all shares to me and as earlier had all dividends paid only to me. Even I was bit careless and didnt really bothered about 200 shares on another persons name in my company. I paid HMRC the Corporation tax and VAT whatever was calculated and closed the company. Now the company is dissolved and struck off and I need to apply for my Second Tier 1 General Extension as I need to spend some more time in the UK to be elligible for ILR.

My concern is that since we have missed transferring all shares to my name but I had taken all the Dividends that time (i.e. 2 years ago), would it create any issue for me in my next Tier 1 Extension?? I am in a permanent job now and will just be using income earned in the last 12 months from this job and this time there is nothing to do with my Ltd Company which operated for just 3 months and now closed.

I am really worried that if Home Office checks these records will they find out and will they question me that why the second share holder was not paid any dividends and will it create issues in my extension this time? Does Home Office bother goin into so much depth of previous applications?

As I said my Ltd company just operated for 3 months and is dissolved now. I have paid all the Taxes and VAT that was calculated to HMRC. Just worried about the dividends not being paid to the second shareholder. Is it really a serious issue?

Please help me on this and I would really appreciate if you could give me some advise.
Awaiting your responses.
Many Thanks
I Singh

[northernladuk]

Shame being useless isn't a visa fail.
I have to deal with this crap day to day at work. Not on here as well!

You not like the answers in the other thread you started?

[ISingh]

Shame being useless isn't a visa fail.
I have to deal with this crap day to day at work. Not on here as well!

You not like the answers in the other thread you started?

Hi
Sorry I didnt recieve any notification for responses on the other thread. So just didnt check it.
Doing it now. Thanks for your comments.
Cheers
ISingh

[doodab]

UK Border Agency | Appendix A - Attributes

Sounds like you need an accountant anyway.

[Podgy]

Yes it is a problem. Unless your wife is on a different class of share you must give her the same. You could do a dividend waiver but HMRC will not like this at all. Try doing for a search on dividend waiver on here. You have a 50-50 split so dividends must be split 50-50. Do it properly or don't do it all. Fudging your accounts just to stay in the country is not only going to get you in trouble with the tax man but also could result in you failing your application.

I don't know how visa stuff works but I would hope to god the UKBA will do extensive checks including with HMRC.

Surely there can be a note in the accounts that the directors agreed to defer Dividend payment for said shareholder until a certain date - so long as a deferral is agreed by both directors (based on cash at bank) surely there is no problem? Pay 1 defer 1 - whats the problem with that?

[northernladuk]

Surely there can be a note in the accounts that the directors agreed to defer Dividend payment for said shareholder until a certain date - so long as a deferral is agreed by both directors (based on cash at bank) surely there is no problem? Pay 1 defer 1 - whats the problem with that?

Because it becomes wide open for abuse, people hitting their tax limits perfectly or bumping up one director to hit a limit he needs. The idea is you have a share in a company, not a tool you can fudge as you like for your own needs.

[Podgy]

Because it becomes wide open for abuse, people hitting their tax limits perfectly or bumping up one director to hit a limit he needs. The idea is you have a share in a company, not a tool you can fudge as you like for your own needs.

But it is legal?

[Scruff]

A dividend can be declared, with no cash changing hands. The cash can be withdrawn at a later date, when sufficient cashflow allows.

Journal Entry for declaring dividend:

Debit - Dividend Paid
Credit - Shareholder for Dividend

When cash is available - pay it and the cashbook entry will create:
Debit - Shareholder for Dividend
Credit - Bank Account

I would definitely suggest talking to your accountant and enquire as to his qualification?