Receiving payments from self-employment Tier 1 General

[spicycurry]

Hello everyone,

I was expecting a payment from an overseas company this month for a consultancy project I have delivered to them. However due to financial regulations in that country in terms of letting foreign currency going out - they will not be able to pay me anytime sooner i.e. this month.

However I have to apply for my tier 1 general extension visa on 3 April. My lawyer advised me to email that company so that they nominate and request any personal acquaintance in the UK who can pay from his/her personal account to me on that company's behalf mentioning the invoice number in the transaction.

He asked me to get all the email communications together, contract, invoice of the consultancy and links to actual work done - web projects, contact details of the overseas company, names, newspaper cutting about the work I did etc.

I wanted to know will this be a valid payment? What kind question UKBA may ask about this arrangement?

Thank you all.

[ram80]

I am not sure you need to have received all payments. As long as the revenue has been earned (i.e. your service has been provided), you can treat it as a revenue for the year, it doesnt matter that it is yet to be received. I hope you already have the proof that the work has been delivered, and that the invoice has been sent out to the customer which they have confirmed to pay soon?

Is there any rule that all earned revenue should have been received before declaring it for your visa renewal?

[spicycurry]

Thanks for your reply ram80. I have already sent out the invoice to the client but they have clearly said that they cannot pay it within March due to legal complications. However, they will request anyone in UK personally to pay me on their behalf as I have an urgency.

Is there any rule that all earned revenue should have been received before declaring it for your visa renewal?


I really don't know the answer to this I am afraid

[ram80]

Based on my personal understanding, receipts and revenue are two different things. You earn revenue when you have finished your work according to your contract, and once you have billed your customer.

Whether you receive it in time or not does not matter, as you have earned your income even if you have received it late.

I think your accountant should be able to analyse and assure you about this in greater detail as they probably need to certify your earnings???

You may have other problems though -- if you have a company, without having enough cash in the company's account it might not be legal to declare yourself a dividend. In any case, check with an accountant about all these issues.

[karg_g]

Hi,

For accounting purpose what ram80 said is/can be right, however for home office purpose they will not take this into account unless you have earned it (i.e) available to you in your business bank/personal bank a/c. I also understand there is no clear guidance on this.

Also Home office wants to have solid information like the money is there physically and not pending. Assume the case I open a company and generate invoices to just cover up/prove my earnings, how will Home office believe i received my monies for the service provided?

HRMC on the other hand will let you take this what they call as receivables. Ideally you should get your invoices paid within 60-90 days hence you can carry forward this as good debts.

Ex:

1) If you were employed for 11 months and your employer gives you forced no pay holiday for 2 weeks, that salary/earnings can not be assumed to made even though you did not want to the take the holidays.

Also be careful about your client asking to pay through a person instead of a company since it might look dodgy for Home office but HRMC does not care.


86. We will only consider actual earnings. We will never consider earnings claimed on a pro rata basis (for example when the applicant has worked part-time and tries to claim for what he/she might have earned if the work had been full-time).

[spicycurry]

Also be careful about your client asking to pay through a person instead of a company since it might look dodgy for Home office but HRMC does not care.

Thank you karg_g for your reply. I understand now that you will actually need to have received the payment in your bank account - no two way about it. Thanks.

About the issue that the company can pay through a person - that is all they are offering now. As they don't have any open links with any company in UK. Also if I approach any other company to help with the transaction, I am not sure whether this 'host' company in UK is genuine or not, dodgy or not etc. Basically the client is requesting someone they know here to pay me off and they will settle the deal within themselves.

Is it illegal? I have email communications between my client and me, where they are requesting this to happen, copying in the intermediary person.

Please advise.

[ram80]

Also Home office wants to have solid information like the money is there physically and not pending. Assume the case I open a company and generate invoices to just cover up/prove my earnings, how will Home office believe i received my monies for the service provided

Would the UKBA not accept a signed contract, accompanied by a purchase order & invoices where the customer says the amount is due for payment, since a trail of documentation (as well as prior billings received from the same client) might prove genuineness?

The HSMP caseworker guidance for self employed earnings has some info, it is located at http://www.ukba.homeoffice.gov.uk/sitec ... iew=Binary

[karg_g]

Hi Spicy Curry,

I don't think it is illegal. Kindly check with Senior Guru's/Accountant. All I said was it might look dodgy since UKBA might think you just created income/money by paying them under the table and they paying it through bank transfer. I am not saying they would not accept this, but you will have a tough time proving this. Alternatively can't you ask them to pay in the local currency in the country they are based and you can register a business or open a business account and claim that as well? All you will need is an accountant statement confirming this.

@Ram80: This guidance seems to be bit old, esp the guidance seems for HSMP. Also, I did not really see where the guidance says the pending payment can be accepted.(even if you prove you will get it at a later date?) Apologies if i overlooked reading the guidance.