10 weeks of Tier 1 Entrepreneur visa tips – Week 7 – How to invest GBP 200,000 and what to spend it on?
Once
you have your Tier 1 Entrepreneur visa, it is actually just the beginning - now
the real work begins. You have 3 years to invest the capital of GBP 200000.
The
main thing here is to understand the difference between the following:
On
one hand, there are practical day-to-day actions, such as transferring the
money from your personal account (or your sponsor’s account) to your UK company’s
account you are investing in. So, you transfer the funds to your UK company’s
bank account, then you can use it to run your business, ie to spend on your business
expenses.
What
can you buy with this money? Generally, this is dictated by the tax rules, some
expenses are allowable, some not. In short, you can spend it on the costs of
running your business, ie things you need to buy to have your business going: stock
/ supplies, wages, rent of premises, marketing, business-related travel,
website etc.
The
visa rules go further: you cannot spend this money on buying a residential property
in the UK or to pay yourself. You can still buy a property and you can pay
yourself but not from £200,000 (you need extra funds for that).
We
are often asked, can I buy a car or an office for my business? Yes, you can, if
your business requires it. Although there
are tax rules on how you can offset thse costs against your company’s tax
liability but the visa rules don’t prevent you from buying such things.
On
the other hand, we have accounting rules on the investment. From the
accountants’ point of view, the money doesn’t appear from nowhere – it either
flows in the company as share capital or as a director’s loan. Director’s loan a loan from you to your company because
officially, your company is a separate entity from you. Either is acceptable
for the visa purpose, but director’s loan tends to be more common and more straightforward.
To
read more from the government: https://www.gov.uk/tier-1-entrepreneur/extend-your-visa
Next
week – when to invest? Within 6 months, equal amount per year etc? Can I movefrom one business to another?
For individual advice or to make an
application please contact us info@1st4immigration.com or visit http://www.1st4immigration.com/index.php We respond emails on the same
working day! 1st 4Immigration Ltd, authorised by the OISC, ref 200800152. we
operate at the highest Level 3 of expertise. Office address: 68 King William
Street, City of London, London, EC4M 7DZ.
