Director's Loan agreement and Fund transfer

[tier1entrepreneur-A]

Dear team,

I would like to ask about the limitations for someone to be recognized as FULL time employee, minimum wages and minimum working hours,

I already have established my limited company, and I intent to employ an administrator to my company, and I would like to understand the minimum requirements for an employee to be classified by home office as FULL time employee (working hours/salary),

Do I have to specify something on the contract?

Looking forward to hearing from you your valuable advice,

Thanks in advance.

Best Regards.

[marcnath]

HO/UKVI follows the Works and Pensions guidelines, which specify a full time employee as someone who works over 30 hrs/week.

That is the only criteria.

HO does not ask for employment contracts, so there is no need to specify it in contracts for the purpose of your visa.

Your accountant will normally inform HMRC through RTI, so it will show up in the FPS - but that is not a requirement either as per immigration rules.

[10020132]

ANd you need to comply with all the regulations of employment. That is required for immigration purposes like minimum wage, submitting RTI etc

[bizman]

Always check the minimum wage for each year in April and october of each year in case you are paying minimum wage to your employees.

[tier1entrepreneur-A]

Dear Team,

Many thanks for your clarification, it's much appreciated,

Minimum wages rates are as below:

April 2017 (current)
£7.50 Employee age 25 and over

April 2018
£7.83 Employee age 25 and over

www.gov.uk/national-minimum-wage-rates

So in my case,
Minimum wages for my employees (Full time) will be:

*before April 2018) = 30 hours x £7.5 (min wages)=£225,
Minimum annual salary = 52 (weeks) x £225 (weekly min wages) = £11,700.

*From April 2018 = 30 hours x £7.83 (min wages)=£234.9,
Minimum annual salary = 52 (weeks) x £234.9 (weekly min wages) = £12,214.8

*****Could you please confirm that my understanding/calculations above is correct?

For part time employment, are there any criteria (minimum hours) for how many hours of employment per week required by HO/UKVI for an employee to be classified as part time employee,

Thanks in advance.

Best Regards.

[10020132]

It looks correct

Part time means minimum 15 hourrs per week

[rajbhanu300]

Hi,

Was just going through this post and would like some clarity on part-time hours.As '10020132' specified that it should be minimum 15 hrs/week to consider part-time.I think any hours below 30hrs(full time) could be considered as part-time hrs. Please correct me if i am wrong as i haven't seen that rule in guidance or any other official doc.

[10020132]

Basically hours per week counted for a FT job is 30. Now if you have 20 hours from job1 and 20 hours from job2, they do make 40 hours but they will be counted as 30 hours i.e.1 FT week

So you can have 5 hours on Job1 and 25 hours of job2 which will be equally good to make 1FT

BUT

If you hire someone for lets say 5 hours per week, then two PT weeks wont make a full-time. So thats why to be on safe side I said that if you hire for 15 hours per week you can combine it with others if all other conditions are met

[tier1entrepreneur-A]

Basically hours per week counted for a FT job is 30. Now if you have 20 hours from job1 and 20 hours from job2, they do make 40 hours but they will be counted as 30 hours i.e.1 FT week

So you can have 5 hours on Job1 and 25 hours of job2 which will be equally good to make 1FT

BUT

If you hire someone for lets say 5 hours per week, then two PT weeks wont make a full-time. So thats why to be on safe side I said that if you hire for 15 hours per week you can combine it with others if all other conditions are met

Many thanks for your clarification,

From where we can get the confirmation regarding the minimum for full time employment, as I only can see the maximum per week (40 or 48 hours), but I couldn't find the minimum so far,

I need the source of information, so it will a really important point on job creation prove ( 2xFT or 10xFT positions)

Thanks in advance.

Best Regards.

[10020132]

You can see that in the guidance for tier 1 ent (In Job creastion section)

[10020132]

Its page 34 point (a)

[marcnath]

To clarify, there is no minimum for Part time jobs. Anything less than 30 hrs/week is taken as part time.
There are no minimum either. For example, you can combine 6 PT jobs of 5 hours each as one FT. Or any combination thereof. However each of the jobs should last 12 months each but they don’t have to be at the same time.

[tier1entrepreneur-A]

You can see that in the guidance for tier 1 ent (In Job creastion section)

Many thanks,

Sorry for not seeing this point before,

[tier1entrepreneur-A]

Hi Team,

I will transfer money from my personal bank account to my company/business bank account, I would like to prepare the director's loan agreement to be in place,

Could you please comment with the form details which will cover all the HO/UKVI requirements, (unsecured, free of interest, any specific period for the agreement i.e 3year or 5 years???)

Another point, when I make the money transfer from my personal bank account to the business bank account, do I need to mention on the transfer comments "Director's Loan", and what else I should do to be sure that all the HO/UKVI requirements been followed,

I have applied to open a business bank account 10 days ago at Bank of Scotland, and I still waiting for it to be opened, are there any recommendations for which bank is better for business bank account? and if possible the reason for this recommendation.

Thanks in advance,

Best Regards.

[CR001]

See Multiple Topics/Posts (click)

[marcnath]

I will transfer money from my personal bank account to my company/business bank account, I would like to prepare the director's loan agreement to be in place,

Could you please comment with the form details which will cover all the HO/UKVI requirements, (unsecured, free of interest, any specific period for the agreement i.e 3year or 5 years???)

Have you read the guidance document ? Pg 31/32 specifies exactly what should be in the DLA.

Another point, when I make the money transfer from my personal bank account to the business bank account, do I need to mention on the transfer comments "Director's Loan", and what else I should do to be sure that all the HO/UKVI requirements been followed,

The requirement is only that it should be identifiable as your personal investment. The general way of doing that is to have your full name in each transfer. Adding DIr Loan or something will make it easier to meet the requirement - but it is not the only way to do that.

[tier1entrepreneur-A]

Its page 34 point (a)

Many thanks,

I already read it, I thought it will be great if a form already in place and been checked by expert already in place.

Best Regards.

[tier1entrepreneur-A]

Hi Team,

I would like your advice regarding £3k I have spent from my personal bank account (all business related) pre having my business bank account opened (part of them spent one month pre register the company),

What should I do regarding these expenses?, as i want to be sure that claiming these expenses will not cause any issue in the future during my extension or ILR process,

Thanks in advance,

Best Regards.

[zimba]

They will not count towards your investment if you go via the director's loan option.

[tier1entrepreneur-A]

They will not count towards your investment if you go via the director's loan option.

Thanks zimba88 for your reply, it's much appreciated,

I'm in the 200K route, and I intend to do my first investment on my company of £50K as a direcor's loan,

I thought that I could then re-transfer the £3K from my business bank account to my personal bank account, and I will upload all the receipts which will cover the £3k and all the details,

I see that you advice that this will not be possible the the £3k will not count for investment, and if I did like what I have mentioned above it will be counted as £47K instead of £50K,

Could you please confirm that my understanding above is correct?
Also could you please explain to me why? as I thought that as it all related to the business and within short period of opening the bank account/establish the company that could be acceptable,

Thanks in advance.

[marcnath]

They will not count towards your investment if you go via the director's loan option.

Thanks zimba88 for your reply, it's much appreciated,

I'm in the 200K route, and I intend to do my first investment on my company of £50K as a direcor's loan,

I thought that I could then re-transfer the £3K from my business bank account to my personal bank account, and I will upload all the receipts which will cover the £3k and all the details,

I see that you advice that this will not be possible the the £3k will not count for investment, and if I did like what I have mentioned above it will be counted as £47K instead of £50K,

Could you please confirm that my understanding above is correct?
Also could you please explain to me why? as I thought that as it all related to the business and within short period of opening the bank account/establish the company that could be acceptable,

Thanks in advance.

No, that should be ok.

As long as you have initially transferred 50K and then the business pays back 3K to you as expense reimbursement, it should be fine.

[tier1entrepreneur-A]

They will not count towards your investment if you go via the director's loan option.

Thanks zimba88 for your reply, it's much appreciated,

I'm in the 200K route, and I intend to do my first investment on my company of £50K as a direcor's loan,

I thought that I could then re-transfer the £3K from my business bank account to my personal bank account, and I will upload all the receipts which will cover the £3k and all the details,

I see that you advice that this will not be possible the the £3k will not count for investment, and if I did like what I have mentioned above it will be counted as £47K instead of £50K,

Could you please confirm that my understanding above is correct?
Also could you please explain to me why? as I thought that as it all related to the business and within short period of opening the bank account/establish the company that could be acceptable,

Thanks in advance.

No, that should be ok.

As long as you have initially transferred 50K and then the business pays back 3K to you as expense reimbursement, it should be fine.

Many thanks for your confirmation, it's much appreciated,

FYI, I have registered the company in mid Jan 18 after obtained tier 1 visa early Jan 18,

On my bookkeeping record, which date i should record the expenses date on (i.e. date of actual spent from my personal bank account, or date of register the company, or date I transfer the money back from my business bank account to my personal bank account),

Also, do I will transfer them as a total of 3k or I need to transfer it as it is (separate transaction or each expenditure)?

Thanks in advance,

Best Regards.

[marcnath]

Discuss these with your accountant. It is not an immigration related matter.

[tier1entrepreneur-A]

Discuss these with your accountant. It is not an immigration related matter.

Thanks marcnath,

I thought that this can be something related to Tier 1 visa extension requirements.

[tier1entrepreneur-A]

Hi Team,

I have established my limited company, and I intend to take salary from my company as an employee performing consultation services, the money I will take will be from the business income and not from the money I have invested on the company in form of director's loan,
i.e. Year 1,
I have a consulting company and I will invest 100k on the company, and then I get sales of 80K, I get paid during the year (monthly basis) a total of 12K (1K per month),

So end of year 1:

Cash in = 100K +80K=180K.
Cash out = Other Employee salary (30K) + Director salary (12k) + company expenses (18K)=60K.
End of the year profit= 80k-60k=20k

Could you please confirm that the above should be acceptable, or I should not get any payment from my limited company as a director/employee?

Thanks in advance,

Best Regards.