Post
by ali45 » Wed Oct 01, 2014 12:25 am
Thank you brother for your detail reply really appreciated
I think you need to show the requirements for self employed then
9. Self-employment or Director of a specified limited company in the UK
9.1. Category F: Last full financial year
9.1.1. 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 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.
9.2. Category G: Average of last two full financial years
9.2.1. 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 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.
9.2.2. 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.
9.3. Self-employment or Director of a specified limited company in the UK – general requirements
9.3.1. For those self-employed as a sole trader, as a partner or in a franchise, the relevant financial year(s) will be that covered by the self-assessment tax return and in the UK this runs from 6 April to 5 April the following year. Where the applicant is relying on their partner‟s income from self-employment overseas, the relevant financial year(s) will reflect the requirements of the taxation system of that country.
9.3.2. For those employed as a director of a specified limited company in the UK, the relevant financial year(s) will be that covered by the Company Tax Return CT600 and corresponds to the 12-month accounting year of the company.
9.3.3. The evidence submitted must cover the relevant financial year(s) most recently ended.
9.3.4. If a person has different financial years, e.g. because they are both self-employed and a director of a specified limited company, their income from the self-assessment tax return and Company Tax Return financial years cannot be combined to meet the financial requirement. Including income from differently based financial years would not be a fair or accurate way of calculating a person‟s annual income.
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9.3.5. Income under Category F or Category G can be combined with income from salaried and non-salaried employment, non-employment income and pension income in order to meet the financial requirement. However, unlike with other Categories, these sources of income must fall within the relevant financial year(s) in order to be included. Under Category F or Category G, all sources of income must fall within the financial year(s) relied on and must still be a source of income at the time of application. For example, to count income from property rental the income must have been received during the relevant financial year(s) and the property must still be owned by the relevant person at the date of application.
9.3.6. Where a couple are using their joint income to meet the financial requirement, all of this income must fall within the financial year(s) being relied on and must still be a source of income at the time of application. For example, if the applicant is in the UK with permission to work, to combine their salaried employment income with their partner‟s self-employment income, they must provide evidence of the income received from this salaried employment during their self-employed partner‟s relevant financial year(s) and evidence of ongoing employment at the date of application.
9.3.7. Self-employed income can be cash-in-hand if the correct tax is paid. In line with paragraph 3.1.5 of this guidance, it would generally be expected that the person‟s business or personal bank statements would fully reflect all gross (pre-tax) cash income. Flexibility may only be applied where the decision-maker is satisfied that the cash income relied upon is fully evidenced by the relevant tax return(s) and the accounts information.
9.3.8. Where a person in self-employment, or who is the director of a specified limited company in the UK, also relies on income from other employment (salaried or non-salaried) during the relevant financial year(s), they must also provide evidence of ongoing employment (salaried or non-salaried) at the date of application.
9.3.9. Income from employment as a director of a limited company in the UK of a type specified in paragraph 9(a) of Appendix FM-SE, and dividends from this type of company (where the person is a director of that company), will be counted as income under Category F or Category G.
9.3.10. Current cash savings cannot be combined with income under Category F or Category G. The only practical and fair means of evidencing income from self-employment, or as a director of a specified limited company in the UK, involves the provision of information and documentation relating to tax returns. Therefore, all the income that is counted towards the financial requirement must be drawn from the last one or two full financial years. It would not be appropriate to combine that past income with current cash savings held at the date of application. To do so would not be an accurate indicator of the real level of financial resources available to the couple. It could also lead to the same money being counted twice, once as earnings and later as savings.
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9.3.11. A self-employed person, or a director of a specified limited company in the UK, who has the necessary level of current cash savings can use these savings as their sole means of meeting the financial requirement. For information on cash savings, see section 7 of this guidance.
9.4. Self-employment or Director of a specified limited company in the UK – further guidance
9.4.1. Appendix FM-SE specifies further requirements for combining income under Category F or Category G with other sources of income:
13(e) Where the person is self-employed, their gross annual income will be the total of their gross income from their self-employment, from any salaried or non-salaried employment they have had or their partner has had (if their partner is in the UK with permission to work), from specified non-employment income received by them or their partner, and from income from a UK or foreign State pension or a private pension received by them or their partner, in the last full financial year or as an average of the last two full financial years. The requirements of this Appendix for specified evidence relating to these forms of income shall apply as if references to the date of application were references to the end of the relevant financial year(s). The relevant financial year(s) cannot be combined with any financial years(s) to which paragraph 9 applies and vice versa.
13(f) Where the person is self-employed, they cannot combine their gross annual income at paragraph 13(e) with specified savings in order to meet the level of income required under Appendix FM.
13(i) The provisions of paragraph 13 which apply to self-employment and to a person who is self-employed also apply to income from employment and/or shares in a limited company based in the UK of a type to which paragraph 9 applies and to a person in receipt of such income.
9.5. Self-employment as a sole trader, as a partner or in a franchise – requirements 9.5.1. A sole trader is a business that is owned and controlled by one person, although they may employ staff. A partnership is where the business is owned by two or more people (although equity partners are treated as in salaried employment for the purposes of the financial requirement: see section 5 of this guidance). And a franchise allows a person the right to use an existing business idea. 9.5.2. Where the applicant‟s partner is in self-employment overseas and is returning with the applicant to the UK to work, they may rely on continuing their self-employment in the UK or on a confirmed offer of employment in the UK in order to meet the financial requirement.
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Therefore, if their self-employment income overseas is sufficient to meet the financial requirement, they can also provide evidence either: That their self-employment is ongoing and will be continuing in the UK; or Of a confirmed offer of salaried or non-salaried employment in the UK, starting within 3 months of their return. (The specified evidence and calculation for this is explained in section 5 of this guidance).
9.5.3. Appendix FM-SE specifies further requirements for self-employment income:
19. When calculating income from self-employment under paragraphs 12A and 13(e)… this paragraph applies: (a) There must be evidence of ongoing self-employment, and (where income from salaried employment is also relied upon or where paragraph 9(c) applies) ongoing employment, at the date of application. (b) Where the self-employed person is a sole trader or is in a partnership or franchise agreement, the income will be: (i) the gross taxable profits from their share of the business; and (ii) allowances or deductable expenses which are not taxed will not be counted towards income. (c) Where income to which paragraph 19 applies is being used to meet the financial requirement for an initial application for leave to remain as a partner under Appendix FM by an applicant who used such income to meet that requirement in an application for entry clearance as a fiancé(e) or proposed civil partner under that Appendix in the last 12 months, the Secretary of State may continue to accept the same level and evidence of income to which paragraph 19 applies that was accepted in granting the application for entry clearance, provided that there is evidence of ongoing self-employment, and (where income from salaried employment is also relied upon or where paragraph 9(c) applies) ongoing employment, at the date of the application for leave to remain.
(d)The financial year(s) to which paragraph 7 refers is the period of the last full financial year(s) to which the required Statement(s) of Account (SA300 or SA302) relates.
9.6. Sole trader, partner or franchise – specified evidence 9.6.1. The evidence required to demonstrate income from self-employment is specified in Appendix FM-SE: 7. In respect of self-employment in the UK as a partner, as a sole trader or in a franchise, all of the following must be provided:
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(a) Evidence of the amount of tax payable, paid and unpaid for the last full financial year. (b) The following documents for the last full financial year, or for the last two such years (where those documents show the necessary level of gross income as an average of those two years): (i) annual self-assessment tax return to HMRC (a copy or print-out); (ii) Statement of Account (SA300 or SA302). (c) Proof of registration with HMRC as self-employed if available. (d) Each partner's Unique Tax Reference Number (UTR) and/or the UTR of the partnership or business. (e) Where the person holds or held a separate business bank account(s), bank statements for the same 12-month period as the tax return(s). (f) Personal bank statements for the same 12-month period as the tax return(s) showing that the income from self-employment has been paid into an account in the name of the person or in the name of the person and their partner jointly. (g) Evidence of ongoing self-employment through evidence of payment of Class 2 National Insurance contributions. (h) One of the following documents must also be submitted: (i) (aa) If the business is required to produce annual audited accounts, such accounts for the last full financial year; or (bb) If the business 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 Recognised Supervisory Body (as defined in the Companies Act 2006); (ii) 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; (iii) Evidence to show appropriate planning permission or local planning authority consent is held to operate the type/class of business at the trading address (where this is a local authority requirement); or (iv) A franchise agreement signed by both parties. (i) The document referred to in paragraph 7(h)(iv) must be provided if the organisation is a franchise.
8. In respect of self-employment outside of the UK, evidence should be a reasonable equivalent to that set out in paragraph 7.
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9.7. Director of a specified limited company in the UK – requirements
9.7.1. 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.
9.7.2. Paragraph 9(a) of Appendix FM-SE states that the specified type of limited company registered in the UK is one in which:
(i) the person is a director of the company (or another company within the same group); and
(ii) 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
(iii) any remaining shares are held (directly or indirectly) by fewer than five other persons.
9.7.3. 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. 9.7.4. These specified limited companies referred to in Paragraph 9(a) are only those registered in the UK. Where a person is a director of a limited company registered overseas they cannot rely on the provisions for directors of specified limited companies in Paragraph 9(a) to meet the financial requirement. Instead the director of a limited company registered overseas might be able to use their income towards the financial requirement if the income is of a type that qualifies as employment income (see specified evidence in Paragraph 3 of Appendix FM-SE) or income from self employment (see specified evidence in Paragraph 8 of Appendix FM-SE or as non-employment income (see specified evidence in Paragraph 10 of Appendix FM-SE).
9.7.5. Appendix FM-SE specifies further requirements for income from employment and/or shares in a specified limited company (as defined in paragraph 9(a)):
19. When calculating income…in relation to income from employment and/or shares in a limited company based in the UK of a type to which paragraph 9 applies, this paragraph applies:
(a) There must be evidence of…ongoing employment at the date of application.
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(c) Where income to which paragraph 19 applies is being used to meet the financial requirement for an initial application for leave to remain as a partner under Appendix FM by an applicant who used such income to meet that requirement in an application for entry clearance as a fiancé(e) or proposed civil partner under that Appendix in the last 12 months, the Secretary of State may continue to accept the same level and evidence of income to which paragraph 19 applies that was accepted in granting the application for entry clearance, provided that there is evidence of…ongoing employment at the date of the application for leave to remain.
(e) The financial year(s) to which paragraph 9 refers is the period of the last full financial year(s) to which the required Company Tax Return(s) CT600 relates.
9.8. Director of a specified limited company in the UK – specified evidence 9.8.1. The evidence required to demonstrate income as a director of a specified limited company in the UK is specified in Appendix FM-SE: 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(b)-(d) shall apply in place of the requirements of paragraphs 2 and 10(b)3:
(a) The specified type of limited company is one in which:
(i) the person is a director of the company (or another company within the same group); and
(ii) 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
(iii) any remaining shares are held (directly or indirectly) by fewer than five other persons.
(b) 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, such accounts for the last full financial year. (iv) If 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 Recognised Supervisory Body (as defined in the Companies Act 2006);
3 Paragraphs 2 and 10(b) are the evidential requirements relating to salaried employment and income from dividends.
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(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 VAT return for the last full financial year (a copy or a 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.
(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.
(c) 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. .[/quote]