Self Employment and HSMP extension

nithinmanohar · Post by **nithinmanohar** » Sat Dec 30, 2006 9:59 pm

Hi

is there anyone who has got HSMP extension through transitional arrangement for Self employment.

I was selfemployed ( registered with HMRC and been giving NI contribution by direct debit) since septmeber 2006 but was earning just 600 pounds per month. Will i still qualify for extension. I do have the contract from the college which show that i am working self emploed as a lecturer and that i have my contract till next september 2007

Please help

webhunter · Post by **webhunter** » Sat Dec 30, 2006 10:03 pm

It appears that you have been self employed for hardly 4 months now. When is your extension due?

nithinmanohar · Post by **nithinmanohar** » Sat Dec 30, 2006 10:12 pm

my visa expire On Feb 23rd 2007 and i intend to apply for my visa extension on February 1st.. That makes me self employed for 4.5 months. Would that be sufficient

webhunter · Post by **webhunter** » Sat Dec 30, 2006 10:18 pm

well based on your situation, it appears that you are eligible under the transitional arrangements. There is no mention on how much amount you are required to earn in self-employment/business, so 600 pounds does not appear to be a constraint

nithinmanohar · Post by **nithinmanohar** » Sat Dec 30, 2006 10:24 pm

thanks web hunter for giving me confidence and increasing my morale...

Is there any one up there who has got HSMP extension through self employment way.

Post by **John** » Sat Dec 30, 2006 11:19 pm

Nithinmanohar, I think there is a more profound question than the one you are actually asking. That is, are you really self-employed, or are you actually employed?

How many colleges do you work for? And certainly if just one college, how would you describe your work ... full-time, part-time, a visiting lecturer, or just an occasional lecturer?

And are National Insurance contributions being deducted, or is it genuinely the case that :-

the lecturer is engaged to lecture on not more than three days in three consecutive months; or
the instruction is given as a public lecture which anyone can attend.

nithinmanohar · Post by **nithinmanohar** » Sun Dec 31, 2006 5:59 am

Hi John..at the moment i am just giving my services as a Lecturer in just 1 college, 1 day a week. At the end of the month i invoice them for the service provided.

Could u please explain as to what the last 2 sentences in that quote mean.

regarding natinal insurance- i have given direct debit instruction to the bank, so they deduct around 8 pound 40 pence per month.

When checked with the accountant i will have to pay my tax and file my returns only when this finanacial year end that April 2007,

Do guide me whether i am on the right track

Post by **John** » Sun Dec 31, 2006 10:24 am

Based upon what you post I think there is considerable doubt about whether HMRC would agree you are Self-Employed. And even if they did agree that, which would amaze me, you and your "employer" are undoubtedly caught by the National Insurance provision relating to lecturers.

Lots more detail on this HMRC webpage. See the reference to the special arrangements for National Insurance, towards the bottom of that webpage.

Who suggested this was Self-Employment? The college? Based upon the (limited) information you have posted, I suspect that they are trying to avoid paying employer's National Insurance Contributions for you, and they have not even (legally) succeeded in doing that.

Jk2007 · Post by **Jk2007** » Sun Dec 31, 2006 10:57 am

By the way, What is the transitional arrangement provided for self employed persons, if the fail to get 75 points? Will they get 4years extension(in case of 1+4)?

nithinmanohar · Post by **nithinmanohar** » Sun Dec 31, 2006 3:23 pm

From what i know if u r selfemployed and dont get the required points u are eligible for extension, provided u r registered as self employed and ahs been in business for last 4 months atleast and has contracts for next 6 months...

Post by **John** » Sun Dec 31, 2006 3:23 pm

In order to answer that question, JK2007, I think a good starting point would be to have a look at this webpage and then read no. 13, and indeed the last paragraph in that section.

Also download the HSMP extension application form and then read the information in Section 8 of that form.

What is not known at this stage is how much checking will be done if someone claims to be Self Employed. After all it is all too easy to claim to be Self Employed when HMRC would disagree, and indeed, just looking at the tax angle of this, would easily be able to defeat any assertion of Self-Employment status.

I expect the question of Employed or Self-Employed to become quite a hot topic in the next few months, and not just because of preferential treatment given as regards HSMP extensions. As from tomorrow Bulgarian and Romanian citizens will be allowed to be Self-Employed in the UK, without needing permission, but will need a Work Permit to be employed. Expect that some will claim falsely Self-Employed in order to attempt to by-pass the employment restriction.

Hint to nithinmanohar and others in the same situation ..... if just one customer of your business you are going to struggle to maintain a suggestion that you are running a real business. In am absolutely not saying that it is quite as easy as this ... but you need to get more customers as soon as possible! That at least would start to give you the chance of putting up reasonable arguments to counter any suggestion by HMRC that you actually are employed, rather than self-employed.

ajani · Post by **ajani** » Sun Dec 31, 2006 4:14 pm

Hello John,
I will be applying for extension(1+3) under the transitional arrangement for Self employed during the 2nd week of January.
Below is a summary of my situation,

Came to UK in Sept 2001 on a Student Visa and completed my Masters degree in April 2003. I also completed my Professional examinations to qualify as a Chartered Secretary in November 2003.

Wife joined me in May 2002.

Got the HSMP visa in April 2003.

Children aged between 7 and 17 joined us October 2003.
Got a 3year extension in January 2004 three months before our visas expired.

This happened because the Education authorities insisted on a longer term visa before admitting children to school. I spoke to homeoffice and they advised me to send an early application. It therefore means, i need 15months visa to complete 5years. I hope to point this out in my covering letter, i hope this will be OK.

Between 2004 and 2006 i have done various jobs from working in the Bank to Administrative positions. I wont qualifying under the new criteria because of earnings and age which clearly put me in a disadvantage position.

SELF EMPLOYMENT.
1-In July this year i incorporated a limited liability company.
2-In August i received my Public Practice certificate from the Institute of Chartered Secretaries and Administrators authorising me to engage in Public practice in UK, Channel Islands and the Isle of Man.(www.icsa.org.uk) for more information about Chartered Secretaries.
3-Started operation in September and did some few jobs for some clients.
4-Opened a Business Bank account in October and this has been operated OK.
5-All necessary registration was done with HMRC fOR PAYE, CORPORATION TAX AND NI.Documents to this effect were received between Nov/Dec. We are not due to submit an audited account until September 2007.

I have checked all the requirements and seem to qualify.
Kindly advise accordingly.

Post by **John** » Sun Dec 31, 2006 4:59 pm

Ajani, I don't think there is any doubt .... you have a genuine business.

And just to clarify one point, IND seem to accept that owning a business through the medium of a Limited Company, rather than being a Sole Proprietor, is OK and still qualifies as Self-Employment.

And Ajani, that is indeed the definition of Self-Employment enshrined in the EU regulations, and all these new Bulgarian and Romanian citizens moving here in 2007 or later might well want/need a Limited Company, to assist in giving credence to the thought that they might be self-employed. A possible business opportunity for you? Subject of course to money laundering-type checks.

ajani · Post by **ajani** » Sun Dec 31, 2006 5:23 pm

Thank you John for your timely reply. I hope things go well when i apply in January. I will keep you and other members posted. Once again, thanks.

Spear · Post by **Spear** » Sun Dec 31, 2006 11:36 pm

Ajani,

"Opened a Business Bank account in October and this has been operated OK."

Can you give some details on how you went about opeing and operation the business bank account. What was required, was it easy ???
Thanks

ajani · Post by **ajani** » Mon Jan 01, 2007 11:45 am

Spear,
The procedure for opening a Business account is simple. Walk into any bank of your choice and request for details. Thanks.

goldfish · Post by **goldfish** » Sat Feb 10, 2007 6:11 pm

Has anyone applied as "Salaried" with a limited company and been successful/unsuccessful with their extension?

I receive a salary + dividends from my company so applied for my Extension as "Salaried". This was based on previous advice was Work Permits that this was okay, plus wanting to avoid any Inland Revenue implications of saying I was "Self Employed".

But the new HSMP FAQ state that if you run a limited company you are considered Self Employed.

So now I'm worried they will reject my application on the basis I applied in the wrong category? Anyone had this experience since the new rules?

goldfish · Post by **goldfish** » Fri Feb 16, 2007 11:59 am

Okay I can relax now

My HSMP Extension was approved even though I applied as "Salaried" while working through a limited company. Details if anyone wants them are in the main HSMP Extension Forum, here:
http://www.immigrationboards.com/viewto ... &start=540

alijamal77 · Post by **alijamal77** » Wed Feb 28, 2007 10:48 pm

Hi Ajani

Did you get your HSMP extended under transitional arrangement ?

regards

Ali

Immigrationboards.com: Immigration, work visa and work permit discussion board

Self Employment and HSMP extension

Self Employment and HSMP extension

HSMP Extension Approved as limited company

Did you get your HSMP extended under transitional arrangemen