Tax issues & Change in circumstances after BC Application

[Shogun75]

Hello,

I was running a limited company as a Director and therefore continue to file self-assessment every year. I'm now employed by a large organisation and moved to the PAYE and NIC scheme of that organisation.

I filed for the latest Self-Assessment(SA) in Jan 2016 and found that I have Tax outstanding for 2014/2015 financial year. However, the filing postdate the BC application made in December 2015. I currently have payment delay and negotiating an arrangement or alternative to pay that off. Could the payment delay be seen as an evidence of "Bad Character" during the HO checks? All personal taxations (PAYE, NIC & SA) were in order at the time of BC application and the payment delay was caused by significant loss of income in Jan / Feb 2016.

Also, I recently changed job and therefore my current employer is not the one on the form but the previous one, i.e. at the time of the application. Could this be seen as a misrepresentation? Should I update the HO while the application has not been completed yet?

Finally, would any outstanding Corporation Tax or VAT (being settled under payment arrangement) affects a former Director of a limited company BC application, even though there hasn't been any Court Proceedings and the company is still "Active" (i.e. no bankruptcy, liquidation or CVA)?

Thanks in advance,

Regards,

[zzzindagi]

You don't need to write to H.O if your employment was changed during your application. Under PAYE system employers pay tax and NI every month to HMRC and HO can see when you started your new job.
Secondly, Loss in Jan/Feb has nothing to do with your last year i.e 2014-2015. You earned profit in 2014-2015 and last submission as well as payment date was 31 Jan 2016. The loss you occurred in Jan/Feb belongs to 2015-2016 and the last date for this is 31 Jan 2017. You should have made payment before 31 Jan 2016. Now it is over 2 months and 10 days, they will add penalty as well. You can request them to give you option to pay in installments. If you have cleared all the dues or paying in installments then it should not effect your application.

[Shogun75]

You don't need to write to H.O if your employment was changed during your application. Under PAYE system employers pay tax and NI every month to HMRC and HO can see when you started your new job.
Secondly, Loss in Jan/Feb has nothing to do with your last year i.e 2014-2015. You earned profit in 2014-2015 and last submission as well as payment date was 31 Jan 2016. The loss you occurred in Jan/Feb belongs to 2015-2016 and the last date for this is 31 Jan 2017. You should have made payment before 31 Jan 2016. Now it is over 2 months and 10 days, they will add penalty as well. You can request them to give you option to pay in installments. If you have cleared all the dues or paying in installments then it should not effect your application.

Thanks for your reply.

According to the naturalisation tracking spreadsheet on this platform, many if not most people who applied for BC in Dec 2015 and did biometric in Jan 2016 have already received their approval by the end of Mar 2016.

I was wondering if something else, which I've overlooked or potentially done wrong could have caused the delay. Then I came across this "Tax and Good Character" issue which is extremely nebulous and could be interpreted and used as a catchall. At the time of the application, I did not see that as an issue since I'm a "high rate" tax payer, I've always paid tax and didn't claim any benefit over the 13 years I've been in the UK. Currently, my HMRC deductions (PAYE+NIC) is about £2.5k per month and a large proportion of my net salary is also used to pay other HMRC taxes (i.e. payment arrangement on CT) for a company I was a Director of and which I hope to maintain in an "Active" status. Again, the delay was due to an economic downturn in 2014/2015 in the sector, hence the idea to move to a more stable employment and the use of the regular but lower salary income to clear the HMRC outstanding corporation debt (CT). Of course, the additional SA liability which came in Jan 2016 caused an additional financial strain.

I'm extremely concerned that despite the significant individual contribution to the Treasury over the years and the pro-active approach taken to resolve occasional delays beyond control, my BC would still be refused because of "Bad Character" on the basis described previously.

I'll just wait and see which decision the HO will come up with.

Thanks again for your reply..

[noajthan]

It may be prudent to update HO with latest employer. Could save unnecessary confusion &/or delays if caseworker decides to contact 'latest' employer.

You must keep us informed of any changing circumstances including change of address or agent.

Ref https://www.gov.uk/government/uploads/s ... hanges.pdf

[Shogun75]

Just to inform that, in addition to the Tax situation explained above, my local council mistakenly referred me to a Magistrate Court and obtained a Liability Order against me in March 2016 for non-payment of Council Tax. The Council argument was that the payment details information I sent went to their Spam email !!! I swiftly address the situation and demanded a written letter of apology for the mistake to be used in case this affects my BC application.

I've now cleared all my personal tax liabilities (i.e. Self-Assessment, PAYE and Council Tax)

I did receive the letter from the Council but don't have to use it because my BC has been approved and the Ceremony is scheduled for the 25 May 2016.

That concludes a (very) long path to BC as follows:

1.UK Student Visas obtained on 30 Aug 2002
2.Entered UK on a "Student Visa" on 22 Sep 2002
3.Changed status to "Tier 1 - PSW" in Aug 2008
4.Obtained "Tier1 - G" in Apr 2011
5.Granted "ILR - Long Residence" in Nov 2014
6.Granted "British Citizenship" in Apr 2016

Hope this inspires someone...

Thanks again for all the good people, gurus and moderators on this forum for lightening up the way when the shadow seemed permanently cast and the future gloomy...

[12years]

Congratulations