Tier 1 (Entrepreneur) Extension refusal 245D(c)

[samisosa]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner but should be spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. Still they refused because the money was gone to previous owner.

[samisosa]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner rather that being spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. HO refused because the money was gone to previous owner. Totally confused as to what might be the next step. Two times my Application was refused and and one AR. I am packing to leave now since I thing my second AR might get refused as well.
This is what I explained in my second AR:

"The Home Office refused the Applicant's Tier 1 Entrepreneur application under paragraph 245D(c)(ii) on
the basis that the Applicant had purchased the business premises from the previous owner with fixtures
and fittings.
It is contended that the Applicant bought the business property and not the business from the previous
owner and this included fixtures, fittings and stock. The Applicant rightly invested amounts in purchasing
assets that were to be used for setting up a new business. It is important to note that the previous owner
of the business was running the business under a contract with Gulf for petroleum products and Best One
for the attached convenience store. The Applicant bought fixtures and fittings from the previous owner but
set up his business as a completely new and fresh business. The Applicant did not operate under any of
the previous owner's contracts and in fact marketed his business as a new and independent start-up. The
Home Office has therefore, failed to consider the application or apply the Immigration Rules properly.
It is further stated that the Immigration Rules specifically allow a Tier 1 (Entrepreneur) applicant to
purchase commercial property as part of his investment to set up his business. In case of any commercial
property being purchased by an Applicant the money would have to go to the previous owner of the
property. It is again reiterated that the Applicant has bought property and not the business from the
previous owner and therefore, the Home Office has applied the Immigration Rules incorrectly, rendering
the decision illegal, arbitrary and unsafe.
In addition and in the alternative, it is also important to note that the requirements of 245D(c)(ii) are
relatively new and were not in effect at the time that the Applicant was granted leave as a Tier 1
(Entrepreneur) migrant and therefore, an application of this provision retrospectively is unfair and illegal.
The Applicant was issued his Tier 1 (Entrepreneur) visa in September 2012 and he made an investment in
access of £200,000 in his business within six months of entering the UK on this visa, when there was no
restriction on the purchase of business assets from the previous owner. These requirements under
245D(c) were introduced in 2014 and as stated above should not be applied retrospectively on the Applicant."

[sm12]

Have you considered judicial review? What proof did you submit for investment?
Did they say money went to previous owner on basis of bank transactions?

[samisosa]

Not yet. still waiting for AR result which i submitted on 23 May 2016. Yes, based on the bank transaction I paid to the previous owner through the solicitor via bank when I purchased the petrol station. i did attach the list of fixture, furniture and equipment worth 325,000 but again they argue that it went to the previous owner.

[moongesture]

Not yet. still waiting for AR result which i submitted on 23 May 2016. Yes, based on the bank transaction I paid to the previous owner through the solicitor via bank when I purchased the petrol station. i did attach the list of fixture, furniture and equipment worth 325,000 but again they argue that it went to the previous owner.

Can You clarify the following so that I can advise you

a) Are you the company director or self employed

b) If you are a Company Director, have you paid DL to Company and then company organised the payment for any expenditure

c) Who own the business now you or the company (if you have one)

[samisosa]

a) I am the director of the company.
b) I made payment from my personal account. After the business was purchased, the business account was opened. For these purpose, I had to make director loan agreement that specified that I loaned property and asset to the company.
c) I am still the director of the company and 100% share holder.

[moongesture]

a) I am the director of the company.
b) I made payment from my personal account. After the business was purchased, the business account was opened. For these purpose, I had to make director loan agreement that specified that I loaned property and asset to the company.
c) I am still the director of the company and 100% share holder.

if I understood correctly then business was purchased from personal account and after that a company has been formed and a business account has been setup.
Company was not the first owner and transaction was not made via concerned business account. These assets were transferred to Business and shown in balance sheet later? is that the case??

[samisosa]

Yes, you understood it perfectly. I was awarded all the points except investment of 200,000 which is 20 points.
Directors loan was also shown and in the business accounts, the figure was also shown.
Here is what HO replied:

"You have claimed points for fund which you have invested in UK business. Paragraph 46-SD (a) to 46-SD (e) of Appendix A of the immigration rules listed the Evidence that must be provided to evidence the money has been invested into the UK business.

You have submitted a director loan agreement confirming that you have loaned your business premises along with fixture and furniture with a value of 325,000 that is not acceptable as director loan must be a loan of money and not property.

Although you have bought the premises with fixtures and fitting paragraph 2a5D(c) (ii) of the immigration Rules list what is excluded from being classed a invested funds 2a5D(c) (ii) states buying the business from a previous owner, where the money ultimately goes to the previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather than into the business being purchased ( this applies regardless of whether the money is channeled through the business en route to the previous owner, for example by mean of the applicant or business purchasing 'goodwill' or other asset which were previously part of the business)
We have therefore not been able to accept these funds as being invested into your company.
As a result vou have demonstrated that vou have invested no money into one or more UK business.
Therefore no points has been awarded for attributes in accordance with paragraph 46 of appendix A of immigration rules"

Hope you got the whole picture. I have got another person with exact same situation.

[zimba]

The purpose of Tier 1E visa was never for you to purchase a business with your money but to inject money into a business for growth and expansion. Rules we're clarified to ensure this remains the major purpose of the route. You chances of challenging this are quite slim

[sm12]

When did you apply? And when did you receive the decision?

[moongesture]

Unfortunately the legal side of your case is not very strong. Two major flaws in application.

A) You should loaned the net amount (In cash) to your company and then company has to do whatever required. In this circumstances you could be prevented from, 245(D....

B) You have paid directly to the previous owner thus company business bank statements does not have "transactions" from personal to business (46-SD) ...

[samisosa]

Yes, you are right abdhriz. But I have similar case of an Entrepreneur who did exactly what you said and still got refused with the same clause 245D..He is now investing another 200,000 in the same business and apply fresh application second time after his AR was refused first time.
Another thing is our application was September 2012 so the new law should not apply. If you check the archive of the policy for 2012, it did not even exist.

[helpingperson]

Yes, you are right abdhriz. But I have similar case of an Entrepreneur who did exactly what you said and still got refused with the same clause 245D..He is now investing another 200,000 in the same business and apply fresh application second time after his AR was refused first time.
Another thing is our application was September 2012 so the new law should not apply. If you check the archive of the policy for 2012, it did not even exist.

There is some hope in your case and you should try via JR after your 2nd AR and hire a good law firm.

[sameerb]

Hi Samisosa,

its really sad to hear the news that after such a huge investment your visa was rejected. Actually, I was going to do the same mistake of buying petrol station on long term lease but instead I started construction business. (I submitted petrol station business plan at the intial application)

1. What business plan did you submit at the time of intial application?

2. If you submitted petrol station plan like I did, then how HO expects us to do petrol station business? if you cant purchase it!!

Wish you best luck my friend.

[sameerb]

I mean do they expect us to build a petrol station form scratch!

[zimba]

I mean do they expect us to build a petrol station form scratch!

No but you cannot buy a business and call yourself an entrepreneur. If you are interested in only investing in businesses, you can apply under Tier 1 Investor route

[robertholdon]

Samisosa,

I totally agree with Zimba that your chance to win on AR or challenge the case against HO is slim as you were granted to create a business, not to buy assets.

I understand where you're coming from. Your case is a little bit grey. But in the business point of view when you bought a petrol station and fixtures and goodwill. These are not considered as contributing or investing to the UK unless you put your money as an investor which is the requirement is different than £200k

On the other hand, you could argue that you have successfully created many jobs and these will be a lengthily case. I understand that this is your 100 percent business and your own it. But the HO will not see that as you paid to the previous owner directly or indirectly.

If you bought that petrol station and put your name under the company which the previous owner owned it. Then it would be different story as you are considered as a taking over business and therefore your investment would be considered as entrepreneur.

I have had empathy to you as your investment is a lot of money and the best way is to perhaps going to put as a fresh application.

I must also appreciate that Zimba has made a very clear point about this and hope others will learn from someone's mistake.

Thank you.

[sm12]

Samisosa
Will you attempt to go for JR?

[samisosa]

Still waiting for AR reply which is due by 23 June 2016 or before. I am thinking to go for JR after my solicitor's advice. As being mentioned in the above comments, need to have solid proof to fight or else waste of money and time. After reading the above comments, I still cannot understand what really Tier 1 Ent is all about. just came across another person whose extension was approved in first attempt and he just opened Subway franchise from scratch not pruchasing the property but renting a place and opened Subway, though he "spent" more than 200k in the business. I think this is the right approach with any business.

[DurraniS]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner but should be spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. Still they refused because the money was gone to previous owner.

Hi Samisosa,
It's been a while since u had started this thread but I was going through it last night and I'm afraid I might find myself in the same situation. Could you please let me know what eventually happened with ur application? I will look fwd to hearing from u soon.
Regards

[Casa]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner but should be spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. Still they refused because the money was gone to previous owner.

Hi Samisosa,
It's been a while since u had started this thread but I was going through it last night and I'm afraid I might find myself in the same situation. Could you please let me know what eventually happened with ur application? I will look fwd to hearing from u soon.
Regards

Member Samisosa only posted 8 times and hasn't visited the forum since Thu Jul 28, 2016

[teddybear79]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner but should be spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. Still they refused because the money was gone to previous owner.

As far as my understanding is property investment is allowed if ( please zimba , i would like your feedback on this)

(1) funds go thru company bank account and there is no mortgage on property.
(2) property is used by business and not rented
(3) any additions to property, like equipment , goodwill , will not be counted so property should be registered in full at land registry , if you do like property 100K + 50K equipment & goodwill it will not be counted
(4) to be safe all investment should not be in property ( as it will look like property investment not business) max 30% - 50 %

[DurraniS]

My extension was refused on the basis of section 245D(c) where the money should not go to the previous owner but should be spend in the business. I came to UK in 2012 September and purchased petrol station for 325,000. Still they refused because the money was gone to previous owner.

As far as my understanding is property investment is allowed if ( please zimba , i would like your feedback on this)

(1) funds go thru company bank account and there is no mortgage on property.
(2) property is used by business and not rented
(3) any additions to property, like equipment , goodwill , will not be counted so property should be registered in full at land registry , if you do like property 100K + 50K equipment & goodwill it will not be counted
(4) to be safe all investment should not be in property ( as it will look like property investment not business) max 30% - 50 %

Hi teddybear79. I just got an email about r PM but can't seems to msg u back since I'm a new user. U can email me on xxxxxxxxxxxxxxxxx or if anyone can plz explain how I can access PM. I'm a little confused about this whole thing because the matter being discussed is about buying property and an existing business. What is u buy an existing loss making business and turn it around by investing in marketing it, managing it better, and creating more jobs within that business by turning it around and making it successful. Isn't that what entrepreneurs do? Moreover the clause 245D(c)(ii) was added in may 2014. Should it be applied on applicants who were granted visa before that?

[noajthan]

Hi teddybear79. I just got an email about r PM but can't seems to msg u back since I'm a new user. U can email me on xxxxxxxxxxxxxxxxx or if anyone can plz explain how I can access PM. I'm a little confused about this whole thing because the matter being discussed is about buying property and an existing business. What is u buy an existing loss making business and turn it around by investing in marketing it, managing it better, and creating more jobs within that business by turning it around and making it successful. Isn't that what entrepreneurs do? Moreover the clause 245D(c)(ii) was added in may 2014. Should it be applied on applicants who were granted visa before that?

No contact details in public.

Members have to earn privilege of using Board PM.
http://www.immigrationboards.com/announ ... 99998.html

And why are people hijacking OP's post. OP is evidently busy or has perhaps left UK - hasn't been active since last July.