Tier 1 Earnings - Contract job

[saravana_pc]

Hi,

I have a query regarding the earnings for a contract job.
For example, let's say I earn 250 pounds/day as a contractor for 8 months. Assuming that I work for 20 days a month, can I show 40000 (250*20*8 ) as my earning while applying for Tier-1 extension?

--Thanks

[Lucapooka]

You show your actual earnings that have been acquired over a previous and defined 12 month period. If it was made over 8 months at 20 days per month then good for you but that's not really relevant.

[saravana_pc]

You show your actual earnings over a defined 12 month period. If it was made over 8 months at 20 days per month then good for you but that's not really relevant.

My concern is this:

For permanent jobs, the gross salary is considered while applying for extension. However, for Contract jobs, the pay structure is different (commission etc. are involved ). So, I am wondering if we can show the gross income as earnings when doing a contract job?

[Lucapooka]

The guidance is very clear on how to deal with contract employment.

[saravana_pc]

The guidance is very clear on how to deal with contract employment.

Thanks for the reply, can you please provide a link where the guidance talks about contract jobs? I could not find it anywhere.....

[geriatrix]

Are you employed or self-employed?

[ScopeD]

Thanks for the reply, can you please provide a link where the guidance talks about contract jobs? I could not find it anywhere.....

I think Lucapooka has explained well (short and to the point). Reading the guidance policy will address your concerns. I have just copied & pasted a small (and relevant) section for you but I am sure you will read the document in detail which is available on the UKBA website.

Contractors:
If the applicant is a contractor who does not
operate either through his/her own company
or as an employee, he/she may provide:
• an accountant’s letter confirming a
breakdown of his/her gross and net
earnings for the period claimed; and
• personal bank statements clearly
highlighting all credit payments made
to his/her account from employment
undertaken during the earnings period
claimed.
All accountants must be either fully
qualified chartered accountants or certifi ed
accountants who are members of a registered
body, see section on providing evidence from
an accountant or accountancy firm.

[saravana_pc]

Are you employed or self-employed?

Thanks for the reply. I have just got the offer for 250 pounds/day. I have not decided whether to start my own company or become an employee of an umbrella company. Is it going to make any difference while showing the earnings?

[geriatrix]

Yes, because the documentary evidence(s) one needs to submit depends on the manner the applicant has earned his income (employment, self-employment or something else).

Tier 1 (General) assessment is not based on how or what job you do (like you say, "contract job") but on "previous earnings" on the basis of employment, self-employment, as a contractor or in another operating scenario (individually or in combination of). That is why you failed to notice any reference to "contract jobs" in the policy guidance - because there isn't any, as it is irrelevant.

[arnie365]

Thanks for the reply, can you please provide a link where the guidance talks about contract jobs? I could not find it anywhere.....

I think Lucapooka has explained well (short and to the point). Reading the guidance policy will address your concerns. I have just copied & pasted a small (and relevant) section for you but I am sure you will read the document in detail which is available on the UKBA website.

Contractors:
If the applicant is a contractor who does not
operate either through his/her own company
or as an employee, he/she may provide:
• an accountant’s letter confirming a
breakdown of his/her gross and net
earnings for the period claimed; and
• personal bank statements clearly
highlighting all credit payments made
to his/her account from employment
undertaken during the earnings period
claimed.
All accountants must be either fully
qualified chartered accountants or certifi ed
accountants who are members of a registered
body, see section on providing evidence from
an accountant or accountancy firm.

Hi, I am planning to go contracting, and have not dealt with Umbrella companies before.
1.)How will UKBA come to know that I am a contractor? Does a contractor payslip look different from a permie one?
2.)Will any umbrella company provide "an accountant’s letter confirming a breakdown of my gross and net earnings for the period claimed"?
3.)Will UKBA consider net salary or gross salary for a contractor for "previous earnings"?
4.)What are the deductions for net salary besides employer's and employee NI,Income Tax and umbrella fees?

[ldbright]

I have been a contractor and used the same umbrella company for 4 years.

Because officially, I am the employee of the umbrella company, they issue me payslip (hard copy, envelope format) every month with break down of my incomes, which includes gross pay and net pay. The net pay matches 100% of the payments shown on my bank statements.

I used my paper payslip and bank statement for my initial application and granted visa without any problems. I plan to use the same type of documents for my extension and hopefully they are enough.