Reply to: No Dividends paid to 2nd share holder-company dissolved now

[northernladuk]

NorthernGrumpy makes everything sound so serious - when it is'nt! Just get your paperwork done & good luck - you have nothing to worry about.

<grumble, moan>

[ISingh]

Thanks for the response Podgy.

[Podgy]

Hi northernladuk,
You have raised a very good point here.

I would actually have earned enough points even without taking these dividend vouchers in my previous visa application. I just showed these dividends in my application because I had to show earnings for the last 12 months prior to my visa application and these dividends I earned for 2 of those 12 months only.

I needed only around £21000 Per Annum income to earn enough points to get the visa. But my total was around £31000 Per annum when I applied for visa and got it.
Out of this 31000, around £6000 were the dividends I took. Rest of the money I claimed points for, came from the permanent job I did prior to working for my own Limited company.

Therefore even if I wouldn't have taken the dividends I would have had £25000 Per Annum. And still qualify for the extension.
So in any way the dividends I took did not give me advantage in claiming points to be elligible for my last Visa Extension.

What do you think should I leave everything as it is now and forget about it and just prepare my next extension application nicely or should I get the dividends waiver signed n all....?

Many Thanks
ISIngh

Having just been through the UKBA procedure for my spouse all you need to show is that you have enough income / employment to support your application (we had to supply a years worth 6months at the start of the application & again 6 months later just before permits issued) - they are not interested in the detail of how you run your company - I'd do the waiver just to tie up loose ends & file away.

NorthernGrumpy makes everything sound so serious - when it is'nt! Just get your paperwork done & good luck - you have nothing to worry about.

[ISingh]

Question is, if you had paid dividends properly will you have got enough points for your visa? I would doubt this so you have used a waiver to manipulate your company and gain advantage. This will stand out like a sore thumb when HMRC come sniffing and if they find this I would hope they would rectify it so causing a problem with your application.

Hi northernladuk,
You have raised a very good point here.

I would actually have earned enough points even without taking these dividend vouchers in my previous visa application. I just showed these dividends in my application because I had to show earnings for the last 12 months prior to my visa application and these dividends I earned for 2 of those 12 months only.

I needed only around £21000 Per Annum income to earn enough points to get the visa. But my total was around £31000 Per annum when I applied for visa and got it.
Out of this 31000, around £6000 were the dividends I took. Rest of the money I claimed points for, came from the permanent job I did prior to working for my own Limited company.

Therefore even if I wouldn't have taken the dividends I would have had £25000 Per Annum. And still qualify for the extension.
So in any way the dividends I took did not give me advantage in claiming points to be elligible for my last Visa Extension.

What do you think should I leave everything as it is now and forget about it and just prepare my next extension application nicely or should I get the dividends waiver signed n all....?

Many Thanks
ISIngh

[northernladuk]

I can't see an issue, having a foreign partner I can confirm the UKBA are the thickest and most inept of all Gov Depts.

Clueless

Unfortunately this is probably the bottom line

[stek]

No Dividends paid to 2nd share holder-company dissolved now

I can't see an issue, having a foreign partner I can confirm the UKBA are the thickest and most inept of all Gov Depts.

Clueless

[northernladuk]

Hi Wanderer,
Many Thanks for your response. Yes I paid all the tax for the earnings for which I claimed points to get Tier 1 Visa Extension in the uk. Still I'll talk to my accountant and I think I should get a Dividend Waiver signed by my uncle to be on the safe side..

ISingh

Question is, if you had paid dividends properly will you have got enough points for your visa? I would doubt this so you have used a waiver to manipulate your company and gain advantage. This will stand out like a sore thumb when HMRC come sniffing and if they find this I would hope they would rectify it so causing a problem with your application.

[ISingh]

No, I don't think they will.

You got paid the whole dividend because your Uncle agreed to waive his right to a dividend so that's perfectly legal. UKBA won't be bothered about auditing your accounts and quibbling about the reasons for dividend waivers (none of their business anyway). All they care about is that you earned the money and paid your tax.

Hi Wanderer,
Many Thanks for your response. Yes I paid all the tax for the earnings for which I claimed points to get Tier 1 Visa Extension in the uk. Still I'll talk to my accountant and I think I should get a Dividend Waiver signed by my uncle to be on the safe side..

ISingh

[Wanderer]

I am just concerned that if I go for visa extension next time.. can UKBA create any issue for me on this? Please advise on this if you can..

No, I don't think they will.

You got paid the whole dividend because your Uncle agreed to waive his right to a dividend so that's perfectly legal. UKBA won't be bothered about auditing your accounts and quibbling about the reasons for dividend waivers (none of their business anyway). All they care about is that you earned the money and paid your tax.

[northernladuk]

Have a look at the guides to the right and you will see a link for S660. Have a read of this.

You need to get some professional advice in the future and understand it. Claiming ignorance is not a defence.

[SueEllen]

Hi,
The other share holder never gave me any money to start business or anything.. As I mentioned earlier that while
I am just concerned that if I go for visa extension next time.. can UKBA create any issue for me on this? Please advise on this if you can..
Many Thanks
I Singh

Can't advise as I have never had any need to deal with UKBA.

Do you have a dividend waiver for him?

[ISingh]

It's dodgy to do that unless it's clear what the other family member did for you, for you to give them an interest in your company.

So for example if the other shareholder gave you some capital to help set your business up and you gave them shares in return as long as this is clearly recorded in the business records then it's not going to be an issue.

However if the other family member did nothing that you recorded simply because it wasn't legit, and you made them a shareholder then your accountant should ask why. The reason why they should do this is to help protect you if HMRC ever come sniffing as people commonly do this to avoid tax.

Spouses and civil partners are different. It's recognised that partners provide support for each other.

Dividend waivers have been explained by Wanderer so read his posts.

Hi,
The other share holder never gave me any money to start business or anything.. As I mentioned earlier that while creating my co. the person who created the co for me, asked me if I want to appoint another share holder .. I just said ok. do it... so allocated 200 shares to uncle...
My uncle never did anything for the company.. he wasnt involved with it in any way.. I actually shouldnt have appointed him 200 shares... it wasnt needed in anycase... I just wasnt aware how these things work and just said yes to the person who created teh co for me to appoint my uncle as shareholder ..

Now the company has been dissolved.. I paid what ever Corporation tax , VAT etc was calculated....
HMRC dissolved the company .. and never asked me anything .. never came sniffing for anything...

I am just concerned that if I go for visa extension next time.. can UKBA create any issue for me on this? Please advise on this if you can..
Many Thanks
I Singh

[SueEllen]

Sorry.. What do u mean by that?
There is nothing more or less to this...
Its straight forward...The dividend wasnt paid to the other share holder...
I have explained everything above .. just asking for a good advise explaining the complete situation..
nothing hanky panky here..

It's dodgy to do that unless it's clear what the other family member did for you, for you to give them an interest in your company.

So for example if the other shareholder gave you some capital to help set your business up and you gave them shares in return as long as this is clearly recorded in the business records then it's not going to be an issue.

However if the other family member did nothing that you recorded simply because it wasn't legit, and you made them a shareholder then your accountant should ask why. The reason why they should do this is to help protect you if HMRC ever come sniffing as people commonly do this to avoid tax.

Spouses and civil partners are different. It's recognised that partners provide support for each other.

Dividend waivers have been explained by Wanderer so read his posts.

[ISingh]

Dividends to family members, not your spouse? Oh dear, knew there would be more to this.

Sorry.. What do u mean by that?
There is nothing more or less to this...
Its straight forward...The dividend wasnt paid to the other share holder...
I have explained everything above .. just asking for a good advise explaining the complete situation..
nothing hanky panky here..

[northernladuk]

Hello Guys,

Many thanks for your replies. I actually didnt get any notification for responses on my thread and so just lost touch. Somehow just checked it today and found your valuable comments under my query.

I would like to clarify that I didnt not want to do any kind of Tax avoidance etc by having a second share holder in my company. This was the first time ever I worked through my own Ltd Company and had no knowledge how things work. The person who created my company, asked me when creating it whether I want a shareholder in the company or not. I just told him to appoint my Uncle as the shareholder (Secretary) for 200 shares out of 1200. The rest 1000 allocated to me (Director). (Donno why I agreed to that!! Anyhow My mistake.)

As mentioned earlier I had discussed with my accountant that we wil transfer all shares to my name before closing the company. I paid all taxes calculated and asked my accountant to dissolve the co. as I had gone into a permanent job. He started the process. I didnt bother much as I started doin a permanent job and he closed the co.
I had never signed up for PAYE and never took salary as the company just operated for like 3 months and then I had to close it so registering for PAYE and deregistering etc would have been a hassle. I just took the dividends i mentioned above.

My Question:
My uncle agreed to not receive any dividend. But I didnt get any share waver form signed that time. Hez ok with it and can sign the DIVIDEND WAIVER form now or anytime. He will never raise any concern with HMRC or anyone that no dividend was paid to him. Will it be useful to keep that signed form with me just in case UKBA enquires about it next time I go for visa extension? Even though the company is completely dissolved now..
Also, where can I find the Dividend Waiver form? Can you please advise.

I'd really appreciate your response.

Many Thanks
ISingh

Dividends to family members, not your spouse? Oh dear, knew there would be more to this.