£5 Million Income (Accelerated Route)

[confused90]

Hello guys,

I've come across the accelerated route requirement of £5 million in 3 years, the requirement states:-

(b) 3 years if the applicant has:
(i) established a new UK business that has had an income from business activity of at least £5 million during a 3 year period in which the applicant has had leave as a Tier 1 (Entrepreneur) Migrant,

Just want to ask everyone if the 'income' is supposed to be profit? Or revenue?

According to a website (http://www.investopedia.com/terms/b/businessincome.asp)

Any income that is realized as a result of business activity. Business income is a type of earned income, and is classified as ordinary income for tax purposes.
Business income can be offset with business expenses and business losses. It can be either positive or negative in a given year.

My business expenses are usually buying high-priced inventory, so would the 'income/revenue' from it count?
Don't want to apply and get rejected.

Inputs appreciated

[grreg]

If you read it very carefully you will notice the term used is 'gross income' which is very different from income. Essentially 'gross income' is revenue minus refunds.

There is no requirement for your business to be profitable while on the Tier 1 Entrepreneur visa, so while you might have had 'gross income' of £5m over the 3 year period, it is possible that you demonstrate an overall loss. Given this situation you would still be eligible for ILR.

In a loose definition 'gross income' might be referred to as 'turnover'.

[zamanam]

Hi all,

Can you please let me know about ILR in 3 years is it based on net increase in either
- job creation to 10 staff or just hiring total 10 staff?
- net increase in turn over to £5m or just £5m turnover?

It seems requirement is only £5m TURNOVER i.e. net of refund but inclusive of VAT and then job creation requirement is only two staff NOT ten staff to get ILR within 3 years. Can you please confirm.

scenarion:
A - If we buy two petrol pump making £1.5m PA via mortgage so any money paid as premium or asset whether FH or LH won't be counted we can ignore this and the additional money is needed for £200k. Lets say we arrange that. But say if turnover becomes £1.7m each so total net increase in turnover is £0.4m PA for two petrol station while total turnover is £3.4m pA. Can you please let me know if all £3.4 will be counted ort only £0.4m.

B- Same with staff - say if we buy two subway with toal 15 staff already working - I increase it to 17 staff due to extention in hour of services. Thus net increase in staff is 2, will this be counted as counted only 2 staff and not 17 staff.

C- Same scenario as B but incstead of buyng the business we buy as TOGC asset and lease only where they give P45 and letter I recruit my own staff (not nnecessarily their staff but wil increase say 5 of old staff). In this case will all 17 staff be counted for visa purposes or again only 2 staff?

If anyoone know the answer please let me know.

Thanks

A

[zimba]

Can you please let me know about ILR in 3 years is it based on net increase in either
- job creation to 10 staff or just hiring total 10 staff?
- net increase in turn over to £5m or just £5m turnover?

Net increase only makes sense if you joined/taken over an existing business. If you started your own business it simply has to hit £5m turnover or you create 10 jobs for a year.

It seems requirement is only £5m TURNOVER i.e. net of refund but inclusive of VAT and then job creation requirement is only two staff NOT ten staff to get ILR within 3 years. Can you please confirm.

That is correct

scenarion:
A - If we buy two petrol pump making £1.5m PA via mortgage so any money paid as premium or asset whether FH or LH won't be counted we can ignore this and the additional money is needed for £200k. Lets say we arrange that. But say if turnover becomes £1.7m each so total net increase in turnover is £0.4m PA for two petrol station while total turnover is £3.4m pA. Can you please let me know if all £3.4 will be counted ort only £0.4m.

You need to increase the turnover by £5m. You cannot claim a business baseline when you were not in charge.

B- Same with staff - say if we buy two subway with toal 15 staff already working - I increase it to 17 staff due to extention in hour of services. Thus net increase in staff is 2, will this be counted as counted only 2 staff and not 17 staff.

Yes. Your net increase here is simply 2 people not 10.

C- Same scenario as B but incstead of buyng the business we buy as TOGC asset and lease only where they give P45 and letter I recruit my own staff (not nnecessarily their staff but wil increase say 5 of old staff). In this case will all 17 staff be counted for visa purposes or again only 2 staff?

No. You must create extra 10 jobs after you join. If you lay someone off you need to replace them to keep the net increase at 10.