I'm doing contracting having my own one-man company, have taken almost 70% of my profit of last year income via director salary and quarterly dividends. HSMP guidance says there are two options available to apply under, which are quoted below.
As per my case could you guys recommend which option should i choose? I reckon it's option 1 that suites me which requires minimal evidence i.e. only my personal bank statements, dividend vouchers and salary slips.
Salaried Employees with Dividend Payments:
If the applicant is paid through a combination of salary and
dividends, and both payments appear on the applicant’s
payslip, salaried employees with dividend payments could
provide:
• Their personal bank statements covering the full 12 month
earnings period;
and either
• Pay-slips covering the full 12 month earnings period; or
• A letter from their employer.
If the applicant is paid through a combination of salary and
dividends and both the salary and the dividend payments do
not appear on the applicants payslip, salaried employees with
dividend payments could provide the above documents plus:
• Dividend vouchers, for each dividend payment claimed,
showing both the gross and the net dividend.
Self-Employed Earnings within a Business/Company
Structure:
If an applicant has worked in a self-employed capacity
through their own business/company structure and has
chosen to retain their earnings within the business/company,
they could provide:
• Business/Company Accounts - prepared in accordance
with statutory requirements and showing the net profit
generated for the earnings period claimed; and
• A letter from their accountant confirming the details
contained within those accounts.
If the applicant is not the sole shareholder of the company
they should also provide :
• A letter from their accountant confirming their shareholding
and the proportion of net profit before tax to which they are
entitled for the earnings period claimed.