Tier 1 extension appeal

[NRK]

this is done

[WRS]

Have you drawn any salary from the business? If yes, paid Class 1 NI on it? Or you have just drawn dividend/shown profit from the business?

[NRK]

I have taken 2 months salary and paid Class 1 NI as well as Tax which is shown in my bank statement and the rest of the balance in my bussiness account i have shown as profit from bussiness

[gauravsk]

Hi,

I have got the similar situation. Do you have any idea how can we prove that we are self employed?

[NRK]

Hello gaurav

I don't have to prove self employed i have to prove i am sole director cum sole employee which is done by a letter from company house

regards

[zuby]

Hello NRK,
Sorry to hear that you extension rejected because of UKBA error.
Second thing you wasted £1800 on Solicitors, you can apply yourself with little search in this forum and UKBA guidelines.

Director of limited company have to options to show earnings:-
1) Salary & Dividend,
So they need to pay class1 NI & tax on dividend

2)Just Dividend
Less hassle just pay tax on dividend and no NI.

So in your case you just need to prove you paid Class 1 NI On your Salary and you will pay tax on dividend.

Simple theory

[NRK]

hello zuby

I am limited company sole directore and shareholder in which case

i have shown net profit of the company which is £11000 remaining £25000 is accepted as valid earnngs by UKBA & i had to shown my earnings above £35K and to qualify earning points
we can show the net profit because in the application there is a option called

-Company/business accounts which clearly show the net profit of the company.

as per their guidance i have given them 3 evidence.
Company/business accounts which clearly show the net profit of the company.
Bussiness bank statement
Invoices duiring the period claimed


any thing wrong in this let me know zuby

Regards

[zuby]

Hello Nakul,

Did you submitted these documents?
Self-employed earnings within a business or company structure

If you have worked in a self-employed capacity in your own business or company structure and have chosen to keep your earnings within the business or company, you could send:
• business or company accounts that meet statutory requirements and show the net profit made for the earnings period claimed; and
• a letter from your accountant confirming the details in those accounts.

and Most important thing is your accountant:-

Requirements for accountants

If you are providing evidence from an accountant or accountancy firm, they must be either a fully qualified chartered accountant or a certified accountant who is a member of a registered body.

If your earnings were for work done while you were in the UK, the evidence must come from an accountant or accountancy firm in the UK who is a member of a recognised supervisory body:

the Institute of Chartered Accountants in England and Wales (ICAEW);
the Institute of Chartered Accountants in Scotland (ICAS);
the Institute of Chartered Accountants in Ireland (ICAI);
the Association of Chartered Certified Accountants (ACCA);
the Chartered Institute of Public Finance and Accountancy (CIPFA);
Institute of Financial Accountants (IFA); and
the Chartered Institute of Management Accountants (CIMA).

[NRK]

Hello Zuby

As i said i am not self employed

i am sole employed/director

i submitted as per Tier1 (general) policy on page 21

viii) Company or business accounts that
clearly show the net profit of the company
or business. Accounts must show both
a profit and loss account (or income and
expenditure account if the organisation is
not trading for profit) and the balance sheet
should be signed by a director. Accounts
should meet statutory requirements and
should clearly show the net profit made
over the earnings period to be assessed.

ix) Business bank statements showing the payments made to the applicant: Bank statements provided must be on official
bank stationery, and must show each of
the payments that the applicant is claiming.
If the applicant wishes to submit electronic
bank statements from an online account
he/ she should also provide a supporting
letter from the bank on company headed
paper confirming that the documents
are authentic. Alternatively an electronic
bank statement bearing the official stamp
of the bank issuing the statements will
be accepted. This stamp must appear
on every page of the statement. For
the purposes of this guidance an online
bank account is one that operates solely
over the internet and sends their bank
statements to their customers electronically
(for example over the internet or via email).
x) Where an applicant is submitting a
combination of bank statements and
a letter/invoice summary from their
accountant, they must also provide any
invoices generated during the period
for which earnings are being claimed.
All accountants must be either fully
qualified chartered accountants or
certified accountants who are members
of a registered body, see section on
providing evidence from an accountant or
accountancy firm.

My accountant is
the Association of Chartered Certified Accountants (ACCA);

Let me know in case any issue here

[NRK]

a typo sole employee/director

[NRK]

Hello zuby

And more over net profit is not only shown by self employed
it can also be shown by sole employee and director.

is there any rule that says it must be shown only be self employed

Regards

[gauravsk]

Hi Zuby,

I am in similar kind of situation where I am director of my limited company and owns 100% shares of my company.

I have applied as a self employed and claimed for my salary and dividends.

UKBA rejected my VISA saying:
"As you are director of a limited company, receive salary and dividend payments, you are not classed as self employed.

I have applied for an appeal. Please suggest me. What was wrong from my side?

[NRK]

hello gaurav

You say you are self employed are you registered with HMRC as self employee if so prove in front of Jury that you are registered self employed

but i am not getting one thing when u are limited company director which u choose to be self employed anyway

see bellow linkhttp://www.hmrc.gov.uk/selfemployed/reg ... elfemp.htm

Regards
NRK

[NRK]

Hello gourav

one more thing gorav when you put forward as self employed you are eligible to pay Class 2 national insurance

http://www.hmrc.gov.uk/selfemployed/reg ... elfemp.htm


Rgrds

[geriatrix]

NRK,

From UKBA's perspective:

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

From HMRC's perspective, you are holder of an office and not an employee unless a contract of employment has been drawn up.


I am not an expert in financial matters, so the following is based on my limited understanding and may not be entirely accurate:

The "profit" is the company's, not yours and the company may choose to distribute profits through dividend(s). Unless there is a legal document that grants you entitlement to company's profits as your personal income,, I don't think you can claim the profits of the company to be your personal earnings.

I think what you have tried to do is operate through a company structure for sometime (salary and dividend) and then thought that you could operate as a sole trader and claim your company's profits.

Assuming that you can do the latter, then you are liable to Class 2 NI contributions.

[NRK]

thanks sushdmehta

company net profit is your earnings if you are sole director & sole employee

more over they have that option in Tier 1 application where we can show net profit of the company why will they have this option if we can't show the net profit

if i was knowing in advance that company net profit will not be considered as my earning in which case i would not opened a limited company in the first place itself rather i would opt to join permanent role

it is their system which encourages for limited company through contract roles they take VAT(21%) what is left over after vat and expenses of company is net profit of company that you have earned. now they say we cannot show this net profit so if we try to take it as divident we pay
corporation tax(21%) and what is left over is peanuts

after all drama our application is rejected saying earnings is not sufficient so come for appeal we will charge another £140 and no lawyer in this country works less than £1800 per hearing. at last you end up loosing all money.

[zuby]

Hello Guys,

if you set up your limited company, best way to show earning is only take dividends not the Salary.

If you withdraw the salary, there is 2 possibilities for NI

a) Class1 NI (Employed by limited company)
b) Class2 NI (Self employed using Limited company)

Now those rejected by UKBA, you have two option guys;

1) Prove them you are employed by your limited company
2) OR If you are Self employed, breakdown your earning in two years
first year is £5,595 (So you don’t need to pay NI) and second year you will pay NI on rest of your income.

If you showing earning between 09/10/2011 till 07/04/2012 (26 weeks) due date will be 31/07/2012,
If you showing earning before this date just show only £5,595.
So this way you can appeal against UKBA decision.

[tier1_aspirant123]

gaurav, in your case if you were drawing salary and dividend through your own limited company then as per the UKBA rules you are self-employed even sushdmehta has pointed that out

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

so you should definitely appeal and if all your your documentation are valid and legal then there is no reason for your case to be rejected.

There has been huge confusion about this rule among many applicants, as in the immigration rule under part 6a ukba says you are self employed and then in the guidance it says, for self employed you need class 2 NI and registered with HMRC as self employed.

its high time for UKBA get their act correct and align their rules with HMRC

[NRK]

Hello everybody

I am employee cum director of limited company
When i had filed my Tier 1 application i had shown netprofit of my limited company
with proof as account letter showing netprofit it also shows corporation tax paid remaining amount is taken as divident the divident vouchers were not submitted to the UKBA earlier
now when i get a date for appeal hearing

can i submit my divident voucher as my earning will they accept this divident vouchers or is there any rule that i have to fight with what all documents i had submitted with the application

Regards
NRK

[NRK]

And that i cannot submit any more documents/evidence during the appeal

[WRS]

Hi,

Can you quote the exact refusal statement as well as the evidence that you have submitted? This will help the seniors here to better advise you.

Regards,

[geriatrix]

can i submit my divident voucher as my earning will they accept this divident vouchers or is there any rule that i have to fight with what all documents i had submitted with the application

And that i cannot submit any more documents/evidence during the appeal

See also Unnecessary immigration appeals to end.

[NRK]

Hi WRS

refusal statement
--------------------
Your self employed earnings are not acceptable as you have not provided evidence of making class 11 national insurace payments to HMRC for the period claimed you have provided evidence of corporation tax for the period,but this is not acceptable evidence as specified at paragraph 116 of the published tier 1 guidance

regards

[NRK]

what i had provide

account letter stating net profit of the company
bussiness bank account statement
invoices claimed

Regards

[WRS]

And more over net profit is not only shown by self employed
it can also be shown by sole employee and director.

is there any rule that says it must be shown only be self employed

NRK,

I am not too sure about it, but in context to your case, it appears that the net profit can only be claimed in "self-employed" capacity and not as director of limited company. In such case class 2 NI would become liable.

Numerous applicants have applied as director of limited company and claimed earnings from salary + dividends (paying tax + class 1 NI on salary) and granted leave succesfully. Your case is rare (that i have seen) where you have claimed net profits as earnings being director of limited company.

Somebody expert in these matters will be able to better advise. AccountantMathew if reading this, can you give your opinion?