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Tier 1 ILR Gross Pay Issue

Archived UK Tier 1 (General) points system forum. This route no longer exists.

Moderators: Casa, John, ChetanOjha, archigabe, CR001, push, JAJ, ca.funke, Amber, zimba, vinny, Obie, EUsmileWEallsmile, batleykhan, meself2, geriatrix, Administrator

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Marin2342
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Tier 1 ILR Gross Pay Issue

Post by Marin2342 » Sun Aug 23, 2015 3:26 pm

My query is bit complex but I will try to keep it short and simple.
During my Tier 1 (G) visa extension in 2012, there were some complexities with my Gross salary. I was an hourly paid employee that time and my company had a scheme (Not sure what the scheme name was) but we have been told that we will get more Net income being into the scheme. On my payslip, there were 3 different figures of Total Gross Pay, Gross to Tax pay and Net pay. I've calculated my annual employment figures for 2012 and they came up as:
Total Gross pay : 30800
Gross to Tax pay: 22000
Net pay: 21700
I was also self employed that time and my self employment for the year was : £9000
Now if you see, the difference between Gross to Tax to Net Pay is only £300 which can't be right as I pay more tax than £300 per month even so how could the difference between Annual Gross and Net be £300. I needed £30000 to get the required points and I was confused which figure should I take, Total Gross pay or Gross to Tax pay. Many of my friends in the same company claimed Total Gross pay for their Tier 1 visas and all of them got their visa extended and now all of them got their ILR as well without any problems. My accountant who was doing self employment accounts for me advised me to use Total Gross pay. So I claimed Total Gross pay (30800) + Self Employment (9000) for my Tier 1 (G) extension. My visa extension was approved without any issues and I got 5 points more than required. Even if I have claimed Gross to Tax pay (22000) and self employment (9000), I could have still crossed my required 30000 limit to get the required points.
I applied for ILR last month at a PEO and was called for an interview with case worker. The case worker checked my HMRC record and found differences between HO and HMRC Record and asked me about it. I paid my full tax on Self employment so the issue was with my employment earnings for sure. I explained him about Total Gross and Gross for Tax figures but didn't had my payslips from 2012 that time with me to prove. HO hold my application for further checks but I had urgent travel plans so had to withdraw my application as I couldn't have waited for them as they take ages in some cases.
I spoke to my accountant and he is convinced that Total Gross to pay was the right figure to claim for at my extension application. He checked my pay slips from 2012 for the claimed period and every month £300-£400 tax was being deducted from my salary plus the NI contribution but the final figures only show a difference of £300 between Annual Gross pay and Net pay which is absolutely wrong.
My accountant says that he will write a very strong letter explaining this and I can take it to HO for my next ILR application. My accountant, though very good but have limited immigration knowledge so I am not too sure if HO will be convinced with his letter. But on the other side, even if HO insists on my Gross to tax pay (22000) plus self employment (9000), that still takes me over the required £30000 with 15 points and I still had scored enough points for the extension of my visa but originally I was awarded 20 points for the earnings.
I need your help and clarification on this chaps! Did someone came across this issue before? All of my colleagues have no problems in getting their ILRs who were with me in the same company and claimed the same Total Gross to Pay income for their visas.
My 10 years in UK have also been completed in the mean time so I am even thinking to apply ILR (LR) instead of on Tier 1 (G) route to avoid complications. But as I have withdrawn my previous application, I believe they are going to check this again anyway.

geriatrix
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Re: Tier 1 ILR Gross Pay Issue

Post by geriatrix » Sun Aug 23, 2015 3:47 pm

Which of the "two" gross income you used in 2012 is not an issue for settlement in 2015!
"Gross taxable pay" was never the earnings to be used for assessment. It has always been "gross pay"!!



The (bigger) issue is tax discrepancy!
Whether you apply for settlement under PBS route or LR, it is almost certain that your tax record during the qualifying period will be checked.

Under PAYE, your employer is responsible for income tax payments, and not you.

But it is clear that the tax was underpaid (and Home Office is aware of it).
For how many years did this happen?

The question is whether are liable for your employer's dishonesty? IMHO, no - but Home Office would love to show otherwise.
Life isn't fair, but you can be!

Wanderer
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Re: Tier 1 ILR Gross Pay Issue

Post by Wanderer » Sun Aug 23, 2015 4:26 pm

This 'scheme' wasn't an EBT or some sort of dodgy employee loan, was it?
An chéad stad eile Stáisiún Uí Chonghaile....

Marin2342
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Re: Tier 1 ILR Gross Pay Issue

Post by Marin2342 » Sun Aug 23, 2015 4:36 pm

My employer was one of the top UK company with over 3000 employees. I don't work for them anymore but the tax issue is certain to be with the scheme I was in. Sorry, I don't know much about that scheme, all I knew that I was been told that you will benefit being into the scheme and get more Net pay but I can't even think of my company running an illegal scheme. I submitted all my payslips to HO with my extension application and they didn't object them.

This has been the case during my employment with them and I think they are still running this scheme. I have still got all my payslips with me so what could be the best course of action now.

geriatrix
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Re: Tier 1 ILR Gross Pay Issue

Post by geriatrix » Sun Aug 23, 2015 4:42 pm

Options:
1. Question the employer as to why there is a discrepancy and what do they intend to do about it since they were responsible for tax payments for employees under PAYE.
2. Calculate your taxes for each of the years you were under that alledged scheme, and pay any tax due from your own pocket.

In either case, get confirmation of amendment from HMRC before attempting to apply for settlement.
Life isn't fair, but you can be!

Wanderer
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Re: Tier 1 ILR Gross Pay Issue

Post by Wanderer » Sun Aug 23, 2015 4:52 pm

Marin2342 wrote:My employer was one of the top UK company with over 3000 employees. I don't work for them anymore but the tax issue is certain to be with the scheme I was in. Sorry, I don't know much about that scheme, all I knew that I was been told that you will benefit being into the scheme and get more Net pay but I can't even think of my company running an illegal scheme. I submitted all my payslips to HO with my extension application and they didn't object them.

This has been the case during my employment with them and I think they are still running this scheme. I have still got all my payslips with me so what could be the best course of action now.
Rangers FC operated such a scheme and they were a major employer.

Net pay is net pay, the tax rules are set in stone, no legal 'scheme' will increase net pay, it's just not possible. They might have been assured by a 'top QC' that their scheme is legal but HRMC are definitely gunning for these schemes now, whereas before they weren't aware of them. It's retro-tax but the HMRC are getting away with it.
An chéad stad eile Stáisiún Uí Chonghaile....

Marin2342
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Re: Tier 1 ILR Gross Pay Issue

Post by Marin2342 » Sun Aug 23, 2015 5:13 pm

Wanderer wrote:
Marin2342 wrote:My employer was one of the top UK company with over 3000 employees. I don't work for them anymore but the tax issue is certain to be with the scheme I was in. Sorry, I don't know much about that scheme, all I knew that I was been told that you will benefit being into the scheme and get more Net pay but I can't even think of my company running an illegal scheme. I submitted all my payslips to HO with my extension application and they didn't object them.

This has been the case during my employment with them and I think they are still running this scheme. I have still got all my payslips with me so what could be the best course of action now.
Rangers FC operated such a scheme and they were a major employer.

Net pay is net pay, the tax rules are set in stone, no legal 'scheme' will increase net pay, it's just not possible. They might have been assured by a 'top QC' that their scheme is legal but HRMC are definitely gunning for these schemes now, whereas before they weren't aware of them. It's retro-tax but the HMRC are getting away with it.
It was T&S (Travel & Subsistence) scheme, a sort of Salary Sacrifice. Just been reading in one of the other forum about the similar issue as mine:

uk-tier-1-general-visas/deception-ilr-refused-t185514-40.html#p1183626

According to forum senior members, sounds like its government backed scheme and is a legitimate/legal way to reduce ones tax liability.

anumkh
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Re: Tier 1 ILR Gross Pay Issue

Post by anumkh » Mon Aug 24, 2015 11:29 am

Dear "marin2342" please see following thread. I had a same discussion regarding this and senior members mentioned that T&S scheme is legal .

uk-tier-1-general-visas/deception-ilr-refused-t185514-40.html#p1183626

But again some people mentioned to you that this is not legal etc etc and you have to pay your remaining tax. this is quite confusing.

geriatrix
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Re: Tier 1 ILR Gross Pay Issue

Post by geriatrix » Mon Aug 24, 2015 11:33 am

The issue here is not whether the scheme is legal or not, but whether the "tax" due on "taxable income" that was earned during stay in UK / qualifying period has been paid (according to the income tax laws in effect at the time) or not!

And the bigger question is - why should the applicant be held responsible for non-payment / under-payment of tax by an employer under PAYE!
Life isn't fair, but you can be!

Marin2342
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Re: Tier 1 ILR Gross Pay Issue

Post by Marin2342 » Mon Aug 24, 2015 5:42 pm

sushdmehta wrote:The issue here is not whether the scheme is legal or not, but whether the "tax" due on "taxable income" that was earned during stay in UK / qualifying period has been paid (according to the income tax laws in effect at the time) or not!

And the bigger question is - why should the applicant be held responsible for non-payment / under-payment of tax by an employer under PAYE!
I completely agree with you, Regardless of the Scheme is legal or not, the issue here is about tax which HO believes is underpaid. I just visited a Solicitor and an accountant and both think I am not liable to pay anything related to my employment under PAYE. Could HMRC or my previous Company be of any help if I contact them and if I do, what should I ask?

geriatrix
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Re: Tier 1 ILR Gross Pay Issue

Post by geriatrix » Tue Aug 25, 2015 7:56 am

I have already spelled out the options, that I think, you may pursue.
Life isn't fair, but you can be!

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