Tier 1 Extension - Ltd company Salary query!

[tungha2106]

Hi,

My tier 1 extension is due in april 2013. I am currently working as a contractor in a financial firm through my own limited company and I am drawing salary and dividens from my business account to my personal account. My query relates to the maximum amount which I could draw as salary and dividend from my business account. for eg: If my monthly invoice value is £5250 and I am withdrawing £4600 out of that as my salary and dividend, leaving just around £600 per month in my business account. Is this okk? I am asking this because I am not sure if there is any limit on withdrawing salary and dividend. In my case, i am qithdrawing aroound 90% of my invoice value as my salary and dividend. To be frank,I have no expense as such. please advise, if the case worker will think otherwise if i draw huge salary and dividend from my business acount?

[tier1_aspirant123]

you should be asking this question to your accountant. only your accountant can advise you how much salary and dividend you can withdraw from you business account.

[Mayurc]

You can withdraw as much as you like from your company. Many people take minimum wages from company either to save tax or to make up their points requires for visa extension.

The case worker is interested to see your payslips amount matching to your bank statement alongside your company bank statements confirming the payment has been made to you. You also stated you do not have expenses in company, so even to keep £600 is not making sense unless you are want to keep it for any future expenses like PAYE taxpaying to HMRC and Corporation tax.

Gurus please let me know if I am wrong anywhere.