Advice needed on section 9 of appendix fm-se

[stuartsko]

I would be very grateful for any advice on the following issue..

I'm a 25% shareholder and a director of a family owned ltd company with one of the 25% shareholders outside of my family. I receive a salary of 23k as paye for which I receive wages slips and a p60... I also have a contract of employment so I am also legally employed as well as having care of office... One of the shareholders has objected to me providing company bank statements as it would not be in the interest of the company and would be classed as gross misconduct if I did this against their and the other directors wishes..

9. In respect of income from employment and/or shares in a limited company based in the UK of a type specified in paragraph 9(a), the requirements of paragraph 9(-(d) shall apply in place of the requirements of paragraphs 2 and 10(.

Am I right in my understanding of the English language in thinking this part of the appendix only applies when combining both dividends from shares and salary or relying on just dividends from shares to meet the 18.6k needed...

Thanks in advance for any replies

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Edited April 5, 2014 by stuartsko

[stuartsko]

It's the wording where the (and/or) part that leads me to believe this is the case

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Edited April 5, 2014 by stuartsko

[ThaiVisaExpress]

This is from the guidance on the financial requirements :

A limited company is owned by its shareholders. Where such a shareholder is also a director employed by the company, they may be paid a salary and receive dividends, which can generally be counted, as appropriate, as employment or non-employment income under Category A, Category B or Category C. However, if the company is of the type specified in paragraph 9(a) of Appendix FM-SE, the person‟s income will be considered under Category F or Category G. This is because in a company in sole or limited family ownership there is scope for doubt as to the effective control of the company, as the person is a director and shareholder or the other shareholders are family members of that person. In that case, instead of the employment evidence in Category A or Category B or the dividend evidence in Category C, we need evidence about the operation of the company.

and

Those who receive a salary and/or dividend income as a director of a limited company in the UK of the type specified above must provide all of the relevant specified evidence listed in section 9.8, which states :

All of the following must be provided:

(i) Company Tax Return CT600 (a copy or print-out) for the last full financial year and evidence this has been filed with HMRC, such as electronic or written acknowledgment from HMRC.

(ii) Evidence of registration with the Registrar of Companies at Companies House. (iii) If the company is required to produce annual audited accounts, the latest such accounts. (iv) If company is not required to produce annual audited accounts, the latest unaudited accounts and an accountant‟s certificate of confirmation, from an accountant who is a member of a UK Recognised Supervisory Body (as defined in the Companies Act 2006); (v) Corporate/business bank statements covering the same 12-month period as Company Tax Return CT600.

(vi) A current Appointment Report from Companies House.

(vii) One of the following documents must also be provided:

(1) A certificate of VAT registration and the latest VAT return (a copy or a print-out) confirming the VAT registration number, if turnover is in excess of £73,000.

(2) Proof of ownership or lease of business premises.

(3) Original proof of registration with HMRC as an employer for the purposes of PAYE and National Insurance, proof of PAYE reference number and Accounts Office reference number. This evidence may be in the form of a certified copy of the documentation issued by HMRC.

© Where the person is listed as a director of the company and receives a salary from the company, all of the following documents must also be provided:

(i) payslips and P60 (if issued) covering the same period as the Company Tax Return CT600.

(ii) Personal bank statements covering the same 12-month period as the Company Tax Return CT600 showing that the salary as a director was paid into an account in the name of the person or in the name of the person and their partner jointly.

(d)Where the person receives dividends from the company, all of the following documents must also be provided:

(i) Dividend vouchers for all dividends declared in favour of the person during or in respect of the period covered by the Company Tax Return CT600 showing the company‟s and the person‟s details with the person‟s net dividend amount and tax credit. (ii) Personal bank statement(s) showing that those dividends were paid into an account in the name of the person or in the name of the person and their partner jointly.

Tony M

[stuartsko]

Thanks for you reply tony, looking at the guidance notes they also have the same wording...

Those in receipt of a salary and/or dividend...

If it was worded "salary or dividend" or "salary or/and dividend" that would mean either type, but the wording "salary and/or dividend" would suggest a salary & dividend combined or just a dividend on its own...

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Edited April 5, 2014 by stuartsko

[7by7]

Sorry, but I fail to see the distinction.

You are in receipt of a salary and a dividend, if one is paid, and so as far as I can see that means, unfortunately, that you need the relevant evidence as specified in section 9.8 quoted by Tony above.

In your opening post you say

One of the shareholders has objected to me providing company bank statements as it would not be in the interest of the company

How would it not be in the interest of the company?

[stuartsko]

Hi thanks for your reply.. Yes I am in receipt of a 23k salary and a dividend of 37k per anum, but I'm not relying on the dividend to meet the requirements, just my salary... One of the shareholders is in constant dispute with me because I had him removed from the board a few years ago on good grounds of a conflict of interest.... But I'm unable to get his support on supplying confidential documents to a 3rd party, he is also disputing it on the cost of administration... Our company is not a small concern and providing all documents would cost a lot of time and money... I cannot supply documents to a third party without full consent of all the shareholders...

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[stuartsko]

The ct600, vat cert, etc are not a problem because this is all information that is not confidential and already available to anyone who asks for them at companies house.. I would not need dividend vouchers because I'm not relying on that income, just the salary.. The problem is just the bank statements.. It just looks like the wording in section 9 states the documents would only be required if using a combination of salary and dividends to meet the requirement, or just using dividends...

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