CATEGORY F & G: SELF-EMPLOYMENT OR DIRECTOR OR EMPLOYEE OF A SPECIFIED COMPANY IN THE UK

What is Category F & G?  

These categories are explained on page 58 of the Appendix FM 1.7 Financial Requirements. Here’s the link: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/636618/Appendix_FM_1_7_Financial_Requirement_Final.pdf

A. Category F: Last full financial year 

Where the applicant’s partner (and/or the applicant if they are in the UK with permission to work) is in self-employment, or is either the director or employee (or both) of a specified limited company in the UK, at the date of application, they can use income from the last full financial year to meet the financial requirement.

B. Category G: Average of last two full financial years

Where the applicant’s partner (and/or the applicant if they are in the UK with permission to work) is in self-employment, or is the director or employee (or both) of a specified limited company in the UK, at the date of application, they can choose instead to rely on Category G. This allows them to use an average of the income received in the last two full financial years to meet the financial requirement.

A reference to the “average” of the income received in the last two full financial years in
Category G is a reference to the mean average.

What is a specified limited company in the UK?

It is one which:

  1. The person is either a director or employee of the company, or both, or of another company within the same group; and
  2. Shares are held (directly or indirectly) by the person, their partner or the following family members of the person or their partner: parent, grandparent, child, stepchild, grandchild, brother, sister, uncle, aunt, nephew, niece or first cousin; and
  3. Any remaining shares are held (directly or indirectly) by fewer than five other persons.

What are the general requirements?

https://www.gov.uk/guidance/immigration-rules/immigration-rules-appendix-fm-se-family-members-specified-evidence 

A. The following requirements should be provided:

  1. 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.
  2. Evidence of registration with the Registrar of Companies at Companies House.
  3. If the company is required to produce annual audited accounts, such accounts for the last full financial year.
  4. If the company is not required to produce annual audited accounts, unaudited accounts for the last full financial year and an accountant’s certificate of confirmation, from an accountant who is a member of a UK Recognized Supervisory Body (as defined in the Companies Act 2006) or who is a member of the Institute of Financial Accountants.
  5. Corporate/business bank statements covering the same 12-month period as the Company Tax Return CT600.
  6. A current Appointment Report from Companies House.
  7. One of the following documents must also be provided:
  • A certificate of VAT registration and the VAT return for the last full financial year (a copy or print-out) confirming the VAT registration number, if turnover is in excess of £79,000 or was in excess of the threshold which applied during the last full financial year.
  • Proof of ownership or lease of business premises.
  • 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.

What documents need to be provided if the person is either listed as a director, an employee or both and receives a salary from the company?

  1. Payslips and P60 (if issued) covering the same period as the Company Tax Return CT600.
  2. Personal bank statements covering the same 12-month period as the Company Tax Return CT600 showing that the salary as a director or employee of the company (or both) was paid into an account in the name of the person or in the name of the person and their partner jointly.

What documents need to be provided if the person receives dividends from the company?

  1. Dividend vouchers for all dividends declared in favor 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.
  2. 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.

What documents need to be provided to evidence on-going employment as a director or other employee of the company or of on-going receipt of dividend income?

  1. This evidence may include payslips (or dividend vouchers) and personal bank statements showing that, in the period since the latest 12-month period covered by the Company Tax Return CT600, the person’s salary as a director or employee of the company (or both) (or dividend income from the company) was paid into an account in the name of the person or in the name of the person and their partner jointly.
  2. Alternative evidence may include evidence of ongoing payment of business rates, business-related insurance premiums or employer National Insurance contributions in relation to the company.

ACCOUNTING TERMS:

  1. What is an accounting year for Limited Companies?

The Companies House will set your accounting year end as a year after the end of the month in which you created (‘incorporated’) the company.

The date that a limited company chooses to prepare its accounts for every year. It runs from the day after the previous accounting year end to the next accounting year end. Many limited companies, but not all, choose 31st March for their accounting year end so that their accounting year matches the financial year.

2. What is a financial year?

The financial year runs from 1st April every year to 31st March in the following year. The financial year applies to limited companies and other businesses that pay Corporation Tax such as non-incorporated clubs and societies.

HMRC uses the financial year for Corporation Tax – for example, they may change the Corporation Tax rate at the beginning of a new financial year.

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