Refusal of EEA2 to lack of nat ins contributions !!

[madmart132]

Hi and thanks in advance for any help you can give us
My wife ( Moroccan National ) has been refused an EEA2 Due to the fact that I ( UK / Irish ) Have not paid any National Insurance contributions , as a company director I understood that I do not have to !!
This appears to be the only reason for them to have refused the permit
We have our own house and a small company not to mention an 11 month old son , also we have over 25K in the bank .
We have been given only 10 working days to appeal ( 6 left ) we are appealing on the basis of the fact that the immigration officer is not a tax specialist ( or immigration specialist in my opinion ) any help or advice on this and should we get a lawyer to help us ?

[nonspecifics]

Hello

The Gurus prefer you to quote exactly the Reason for Refusal.

Could you do that please?

If you are currently in the UK, were you a resident of Ireland and moved to the UK? If you always lived in the UK or always Ireland and have not moved to another EEA country, then you aren't exercising Treaty Rights and so any EU document applications would be refused.
(McCarthy case)

From what I read, you are a self-employed company director.

On the June 2011 EEA2 it says:


SECTION 6 - YOUR EEA NATIONAL FAMILY MEMBER (SELF-EMPLOYMENT)
You must complete this section if you are applying as the family member of an EEA national who is self-employed. If you are supporting them through self-employment you must refer to section 7.

6.1 Name of business
6.2 Business address
Postcode
6.3 Business telephone number
6.4 Evidence of self-employment/business please provide at least one of the following documents:
Invoices/receipts Accountant’s letter Business bank statements

6.5 Additionally you can also provide:
A lease on business premises
(if applicable)
Inland Revenue
self-assessment forms
(if applicable)
Evidence of National
Insurance Contributions
paid

For proof of self-employment it appears 6.1 to 6.4 is the important information required, and particularly 6.4.

Did you supply Invoices / Receipts, Accountant's letter and Business bank statements?


It says " can" provide evidence of NI contributions, not MUST. This means proof of NI contributions is optional.

I presume you have an accountant? Your accountant could write explaining the rules and regulations regarding NI.

When you appeal your case is supposed to be reviewed by a senior caseworker before the appeal, so if the caseworker was talking total rubbish then perhaps UKBA will back down before it goes to appeal.

[madmart132]

Thanks for getting back to me , the exact wording is as follows
On 09 June 2011 a letter was sent to you requesting evidence that your EEA sponsor is exercising treaty rights . The letter also stated that if your EEA sponsor is exercising treaty rights as a self employed person then evidence of National insurance contributions and tax payments are required . You have failed to provide evidence of these payments

We provided the certificate from companies house and bank statements from the company , as you have pointed out there is no compulsion on the nat insurance contributions . So a little annoyed that they appear to be the main plank of refusal .
I am Dual national Irish/UK citizen and we have moved back from Spain , I really did not feel that we needed to send a letter from the accountant , but yes we have an accountant and I will get him to send a letter explaining National Insurance to them .

But please get back to us as we are just about to send the appeal form .

[86ti]

I am Dual national Irish/UK citizen and we have moved back from Spain

Have you applied as an Irish national or a returning UK citizen? In the latter case you should not be required to exercise treaty rights as per the Eind ruling.

[John]

as a company director I understood that I do not have to !!

What gave you that idea? Directors are liable to pay Class 1 NI Contributions, the only difference compared to employees is that Directors have an annual pay period for NI purposes.

Roughly how much salary are you taking from the company?

[madmart132]

Hi John , I am paying myself £400 a month at the moment and will take some as a dividend at the end of the year . This was on the advice of my chartered accountant and I have always done this , as far as I can tell most directors that I know do this !!
The rules for company directors are a little different than for employees , but what I am doing is perfectly within the rules as laid out by the taxman .

[eldane]

I am employed and pay NI. I also have consultancy jobs and am registered as a sole-trader.

A part from paying employee NI I have clearly been told by HMRC I also have to pay Class 1 contribution for the soletrader business I have.

So, why would you not have to pay NI as director? Perhaps you should have a look at http://www.hmrc.gov.uk/calcs/nicd.htm

In http://www.hmrc.gov.uk/nitables/ca44.pdf page 11 it says: "The same rules apply to directors as for other employees but there are some additional rules for directors."

[madmart132]

Hi Eldane , thanks for the post ,the main gist of what I was saying appears to have been lost ie that the question was a non compulsary question anyway !!
Having checked with my accountant , I can pay myself up to £589.38 a month before I have to pay National insurance contributions . There are major differences between being a sole trader and a Company Director , both have there own advantages !!

[Obie]

The question here is whether or not you can be described as a Worker or a Self Employed Person.

Under community law, a worker is someone who undertake an effective and genuine activity, under superversion, for which they receive renumeration.

A Self employed person, undertake activity which is effective and genuine, but there is no relationship of surbordination. They are not being supervised. Whether or not you pay your self, you will still be classified as a Self Employed, as you do not receive supervision from anyone.

Now, so far, the situation is you are a Self-Employed person, as there is no relationship of surbodination.

Your activity has to be legal, even though this is not stipulated in community law. The question is, is the Self employed activity you are undertaking considered legal by virtue of the fact you do not pay taxes ?

The Home Office has to satisfy themselves that you are is lawful self-employment activity, that is the business has to be legal, registered and and effective and genuine. I am of the view this is the case with you.

On the one hand, they have no right to question your tax payment, so long as you are registered and everything is overboard, outstanding taxes or unpaid taxes, does not make your activity illegal, it simply means you may or may not be owing money to Inland revenue.

The medical service and other social services, are supported by NI contributions, therefore it could be argued that failure to pay it, means you are not contributing to the state in the same way as national workers or self-employed persons who do, and as a result, you are not entitled to these services. In these instances, you will be expected to hold a Comprehensive sickness insurance.

I believe there are two ways you can overcome this, which will have to be played out it court, as i strongly believe the HO will not accomodate this.

1. The above explanition i have given, which is , it is not UKBA concern to question your taxes, it is a matter for inland revenue, so long as it is established you are in self-Employment, by virtue of you activities, that should close the matter.

2. Zambrano, your 11months old child has a right to be in the UK with his/her mother and father, or the rights afforded to him under Article 20 of TFEU will be meaningless.

3. Eind. This will certainly apply if your wife was residing with you in Spain
and your were a worker or a self employed person in Spain. In those circumstances, you will not be required to show you are undertaking an economic activity in the UK, as correctly pointed out by 86ti. However, it will be a requirement, that she has resided with you in Spain. I am not sure it will be material, whether or not you resided in Spain as a British or Irish national.

I wish you all the best.

[madmart132]

Thanks Obie , I was planning what you have put forward as the basis for the appeal . I am sure that we have done nothing wrong , obviously as I make more profit I can pay myself more but we have only been trading since the middle of December so are not even in a profitable situation yet . With your points
1) there are no problems with the Inland revenue and our accountant will not allow us to take any liberties anyway
2) could you give us more details on the Zambrano ruling please ?
3) Yes my wife was residing with me in Spain

Thanks Obie and any other advice would be appreciated , should we get a lawyer ?

[Obie]

I suspect you may just be able to pull this without a lawyer, as i don't think it meets the complexity treshold. Just do your homework well and acquaint yourself with the case and your rights.

Zambrano concerns the right of a British Child under Article 20 TFEU to live in the UK with their parent on whom they are dependant. It came about as a result of a CJEU ruling that was passed last Spring.

Provided your worked it Spain, Eind on its own may suffice.

You will need to get evidence of your treaty rights being exercised in Spain, and possibly get it translated in English.

[nonspecifics]

Here is the webpage link for a useful guide on how to lay out your appeal :

'Representation at Immigration Appeals A Best Practice Guide'
Jane Coker, Jim Gillespie, Sue Shutter, Alison Stanley, ILPA/OISC, December 2005
Download a PDF version

It's about half-way down the page.

find it here:

http://www.ilpa.org.uk/pub.html

[Directive/2004/38/EC]

madmart132,

Does your Ltd company have clients who are paying it real money?
Are there any other employees or directors?
Are you paying yourself £400/month as an employee or in your role as a director?

I think UKBA wants to make sure it is "real and effective" employment or self employment. That is the key thing. Namely that your company is doing real work, that it is getting paid, and that you are actively directing it or working for it.

[madmart132]

Hi Directive 2004/38/EC
Yes we have clients who pay real money , the fact that over 2 days this week has been dedicated to sorting out the family permit does not seem to enter in to their way of thinking . As I said earlier the refusal is solely based on the lack of National Insurance contributions , a question on the form that is not compulsary to answer anyway . I am paying myself £400 at the moment and again mentioned earlier will pay myself more when the business is up and running properly and making a reasonable profit I am the only director although my wife is the company secretary .
Thank you nonspecifics for the link on the appeal I am part way through it at the moment so going back to finish it off .

[Innersource]

If you earn below the minimum income salary in which you don't have to pay NI, you need to apply for a certificate of exemption from HMRC, without this written certificate you have to pay NI or make voluntary contributions.

Normally it takes 6 weeks after you have made the application to receive a certificate.

Hope everything goes well...

[John]

If you earn below the minimum income salary in which you don't have to pay NI, you need to apply for a certificate of exemption from HMRC, without this written certificate you have to pay NI or make voluntary contributions.

That is true, for people liable to pay Class 2 NI Contributions, but it is not true as regards Class 1 Contributions.

If drawing £539 per month salary, technically the OP is paying some NI contributions, at the rate of 0%.

[Directive/2004/38/EC]

Are you applying as an employee (a "worker") or as a self-employed person?

Put another way, are you officially an employee of your Ltd company? Do you file regular PAYE for yourself?

[John]

A Director is the holder of an office, and unless a contract of employment is specifically drawn up, they are not also an employee of their company.

From the tax point of view there is no difference in the taxation of income from an employment, or income from an office. Both are subject to PAYE.

But from the immigration point of view, both UK and EU, if someone owns all the shares in a Limited Company, and is a Director, they are treated as self-employed for immigration purposes.

[madmart132]

Hi Directive , thanks for the input but the real question is should we be penalised for not answering a question that we did not have to answer ???

As a company director I followed the advice of my accountant , that is all .
I filled in the part for self employed people as I have various sources of income ( all below the threshold )
For our family to be threatened to be broken up because I have followed a perfectly legal way of doing things ,due to the circumstances at this time upon information given to me by an expert in the field is pretty rubbish really !!

What I am looking for now is help with the appeal , which I am basing solely on the fact that the UKBA are not tax experts ( which is fair and the simplest way of doing things ) and that a voluntary question is question that does not need to be answered .

Sorry but John has just clarified the situation , a company director is an office holder ( a different legal situation from employee or self employed ) but as I have said I have other sources of income ,still as long as I am being paid less than the threshold I do not legally need to pay the national insurance contributions , if the UKBA do not know that it is not my fault !

[nonspecifics]

Here is some case law and discussion on self-employment. It refers to other cases to, which I haven't checked, but thought there might be something of interest here :

http://www.cpag.org.uk/cro/wrb/wrb220/reside.htm

[madmart132]

Nonspecifics , as I have stated before , if the question is not asked ie if you are not asked to provide a contract of work / rental contract / or proof of anything else , can they then refuse the permit because you did not provide the evidence for the question they did not ask ? And as I am just playing the game, tax wise like a lot of company directors is that my fault ? Did I make the rules ?
As stated earlier I am proceeding with the fact that it was not a question that I had to answer !!
Therefore as I am playing within the rules they should have given the permit .

[nonspecifics]

Supply enough documentary evidence to convince the Tribunal your wife is entitled to the Residence Card.

That will prove UKBA was wrong to refuse it , no matter what reason they gave.

[Obie]

I believe you have to stay focused on the core reason why your wife was refused rather than the surface.

The reason may appear on the surface, that it was down to the fact you are not paying tax, but the underlying reason in my view is different.

They are alleging you are not exercising treaty right or you set up this business simply to get you wife residency, and that it is not effective and genuine. Even though not registering for tax purpose does not mean a person is not self-employed, it can also be part of evidence that they are not. Remember the immigration is not a tax expert, and so you have to try and convince him or her that your business/activity in legitimate and within the bounds of the law, and that it is effective and genuine, rather than being set up for the benefit of your wife.

You have got to work on convincing a judge that you are actually self-employed. That you are not paying tax because you are not required to do so. I know the UKBA is not a tax man, but using that as a defence, may not be sensible, focus on proving you are indeed self employed and forget about the other law argument.

You case seems very strong. But try not to appear as arrogant, and cause a judge to make adverse finding on your treaty right, such as " I am not satisfied that on a balance of probability this person is Self-Employed". You will certainly be given a right of appeal to upper tribunal and it will surely be overturned, but it will cause lot of delays and inconvenience to you. Just keep things nice and simple, and gather evidence of your activities.

I believe your first focus should be sending the appeal form to the Tribunal, then you will be given a date for your appeal depending on your area and the availability of slots. Then work on sorting your bundle.

I believe you will be fine, but try and digest things calmly, and focus on your witness statement, which should incoperate all these legal aspect.


I wish you the best in everything.

[nonspecifics]

I know of an appeal where the UKBA reason for refusal was utter rubbish.

The appellant could easily discredit the reason for refusal as rubbish by legal argument , quoting the 2004 Directive and relevant case law, but they lost the appeal.

The Appeal Tribunal did not even address that the reason for refusal was rubbish or discuss the case law.

The appeal was dismissed with the verdict that the appellant failed to submit enough evidence to prove they were entitled to the residence document.

So, that's why Obie's advice is worth listening to.

You win your appeal by proving you are exercising Treaty Rights and that therefore EU law says your Family Member ( wife) is entitled to a residence card.

Legal argument is not enough.

UKBA seem to rely on suspicion and innuendo as a basis for refusal, cos they know they don't need to prove anything if they don't blatantly accuse / libel someone.

But you need to prove your case to win.

Judges want documentary proof.

[John]

I am being paid less than the threshold I do not legally need to pay the national insurance contributions

As long as you are being paid above the rate of £102 per week, technically you are paying NI Contributions, at the rate of 0%. It is only people paid at a rate of £102 pw or less that are exempt from paying NI contributions.

Does it make a difference, either being exempt, or alternatively "paying" 0% NI contributions? Well yes, it determines whether any NICs were paid in the tax year concerned, which has an effect upon contribution-based benefits.