Advice needed! Extension Tier 1 Entrepreneur

[Iro_2013]

Dear Enrepreneurs!

I would appreciate any advice related to my situation.

I am also an extension applicant and received a 200k Tier 1E visa in dec 2011. Since then the funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??)

What is a probability to get an extension if your business is not profitable and operates at a loss? However all other requirements such as 2 full-time workers are employed and money is invested.

All advice is welcomed.
Much appreciated,
IRO

[rahulsingh1]

"funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??) "

- This is a question even I have and many other people. But no one seems to know the answer to it.

I am still waiting for someone to answer this.

Dear Enrepreneurs!

I would appreciate any advice related to my situation.

I am also an extension applicant and received a 200k Tier 1E visa in dec 2011. Since then the funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??)

What is a probability to get an extension if your business is not profitable and operates at a loss? However all other requirements such as 2 full-time workers are employed and money is invested.

All advice is welcomed.
Much appreciated,
IRO

[la]

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

more details - please refer to this link

http://immigrationboards.com/viewtopic.php?t=137111

[rsrameshsunil]

Dear Enrepreneurs!

I would appreciate any advice related to my situation.

I am also an extension applicant and received a 200k Tier 1E visa in dec 2011. Since then the funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??)

What is a probability to get an extension if your business is not profitable and operates at a loss? However all other requirements such as 2 full-time workers are employed and money is invested.

All advice is welcomed.
Much appreciated,
IRO

As far as i am aware, you need to satisfy the two conditions:

1.You have invested 200k in businesses. The money should have been already spent for business purposes. It should not be held in the business account anymore. In other words, what they mean is all the 200k you had is now no more and spent for business purposes.

2.You should have created 2 new jobs since you established the company.

It doesn't matter if the business is in profit or loss. Also it is not even necessary that all the 200k should be invested in the initial business you showed during application. It could be split across many of your other businesses.

[maverick_76]

Any money which is in your business account is money belonging to your business and not you. You have invested this money in your business the moment you transferred it to your business account as part of initial capital, capital injection over a period of time or unsecured loan.

As long as money is in business account you should be alright considering other extension criteria is met.

[my_friend]

Dear Enrepreneurs!

I would appreciate any advice related to my situation.

I am also an extension applicant and received a 200k Tier 1E visa in dec 2011. Since then the funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??)

What is a probability to get an extension if your business is not profitable and operates at a loss? However all other requirements such as 2 full-time workers are employed and money is invested.

All advice is welcomed.
Much appreciated,
IRO

keeping money in business account DOESNOT mean it has been invested....

you need to transfer 200k into your business account and use that money to expand your business and make it profitable...

im sure if you have 2 full time workers and as you have been previously granted a three years visa, you may have invested something in your business during this time and your business may be in good running state otherwise how is your business managing two employees...

its not about profit or loss...its about proper investment and two employments that is a major part of extension, without which the probability is zero...

you still have plenty of time to invest so make your by the time of your extension your 200k have been invested properly....

good luck...

[rsrameshsunil]

Any money which is in your business account is money belonging to your business and not you. You have invested this money in your business the moment you transferred it to your business account as part of initial capital, capital injection over a period of time or unsecured loan.

As long as money is in business account you should be alright considering other extension criteria is met.

Technically from a venture capitalist and angel investors perspective that may be true. But I dont think this is how it works. HO expects you to spend all the money and not just hold in the account.

[rahulsingh1]

Hi La- Following is the full text from page 40 of the guidance.
I dont see where it says that money from business acount has to be spent. ?

--------------------------

A person involved in
property development
makes improvements of some kind to immovable
property (real estate), which increases its value. A person involved in
property management
is charged with operating immovable property (real estate) for a fee, on behalf of the owner
.
The restrictions on investment in property development and property management are intended
to ensure that the Entrepreneur route is used to promote United Kingdom competitiveness in
business.
There is no objection, however, to you investing in companies that are mainly involved in
construction.
Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.
W
hat is a business in the United Kingdom?
A21.
For the purposes of this application, you must have made a capital investment in a business
operating within the United Kingdom economy and subject to United Kingdom taxation. We will
consider a United Kingdom business to be one that:
1.
has its business premises (unless you are self-employed and do not have a premises) or its
registered office or, if it has no registered office, its head office (for a Director of a company)
in the United Kingdom;
2.
has a United Kingdom bank account showing transactions for the business that are current
(this may be either a business bank account, or a personal bank account for sole traders);
and
3.
is subject to United Kingdom taxation.
Any business that benefits from your £200,000 (or £50,000) investment used for the purposes of
claiming points for this application must be this type of business.
Multinational companies that are registered as United Kingdom companies with either a registered
office or head office in the United Kingdom are acceptable.
Registration as self-employed
A22.
A person setting up as self-employed must register as such with HM Revenue & Customs
within six months of starting up. For more information on the legal requirements see the section
Business and Self-employed at
www.gov.uk/browse/business.
Current appointment report from Companies House
A23.
You must obtain the report from Companies House, for a fee, and send it with your
application. This document shows when you became a director of a company. This will be the
same document for a new business as for those becoming directors of an existing business.
For more information on registration with Companies House, please contact Companies House
www.companieshouse.gov.uk/contact/contactUs.shtml
For information on obtaining the current
appointment report please see
http://www.companieshouse.gov.uk/toolsT ... Info.shtml.
Franchises
A24.
Businesses that are set up as franchises can be accepted for the award of points.
You will
either be self-employed or employed, depending on how you decide to structure the franchise
business, and should provide the appropriate evidence

--------------------------


Can you point to the line you are referring to ? Will help us all..

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

more details - please refer to this link

http://immigrationboards.com/viewtopic.php?t=137111

[rahulsingh1]

Hi Sunil,

can you point us to where you read this in the guidance or part6a notes or appendix a ?

how do you know this or is it assumption ?

Regards,

Dear Enrepreneurs!

I would appreciate any advice related to my situation.

I am also an extension applicant and received a 200k Tier 1E visa in dec 2011. Since then the funds are still on my business account and haven't been invested into the business (or when you transfer money to a LTD business account it's automatically means that you have invested into the business??)

What is a probability to get an extension if your business is not profitable and operates at a loss? However all other requirements such as 2 full-time workers are employed and money is invested.

All advice is welcomed.
Much appreciated,
IRO

As far as i am aware, you need to satisfy the two conditions:

1.You have invested 200k in businesses. The money should have been already spent for business purposes. It should not be held in the business account anymore. In other words, what they mean is all the 200k you had is now no more and spent for business purposes.

2.You should have created 2 new jobs since you established the company.

It doesn't matter if the business is in profit or loss. Also it is not even necessary that all the 200k should be invested in the initial business you showed during application. It could be split across many of your other businesses.

[Iro_2013]

Hello rahulsingh1!

I also didn't manage to find it. It was the post from 2010. So may it's now on a different page!
--------------------------

A person involved in
property development
makes improvements of some kind to immovable
property (real estate), which increases its value. A person involved in
property management
is charged with operating immovable property (real estate) for a fee, on behalf of the owner
.
The restrictions on investment in property development and property management are intended
to ensure that the Entrepreneur route is used to promote United Kingdom competitiveness in
business.
There is no objection, however, to you investing in companies that are mainly involved in
construction.
Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.
W
hat is a business in the United Kingdom?
A21.
For the purposes of this application, you must have made a capital investment in a business
operating within the United Kingdom economy and subject to United Kingdom taxation. We will
consider a United Kingdom business to be one that:
1.
has its business premises (unless you are self-employed and do not have a premises) or its
registered office or, if it has no registered office, its head office (for a Director of a company)
in the United Kingdom;
2.
has a United Kingdom bank account showing transactions for the business that are current
(this may be either a business bank account, or a personal bank account for sole traders);
and
3.
is subject to United Kingdom taxation.
Any business that benefits from your £200,000 (or £50,000) investment used for the purposes of
claiming points for this application must be this type of business.
Multinational companies that are registered as United Kingdom companies with either a registered
office or head office in the United Kingdom are acceptable.
Registration as self-employed
A22.
A person setting up as self-employed must register as such with HM Revenue & Customs
within six months of starting up. For more information on the legal requirements see the section
Business and Self-employed at
www.gov.uk/browse/business.
Current appointment report from Companies House
A23.
You must obtain the report from Companies House, for a fee, and send it with your
application. This document shows when you became a director of a company. This will be the
same document for a new business as for those becoming directors of an existing business.
For more information on registration with Companies House, please contact Companies House
www.companieshouse.gov.uk/contact/contactUs.shtml
For information on obtaining the current
appointment report please see
http://www.companieshouse.gov.uk/toolsT ... Info.shtml.
Franchises
A24.
Businesses that are set up as franchises can be accepted for the award of points.
You will
either be self-employed or employed, depending on how you decide to structure the franchise
business, and should provide the appropriate evidence

--------------------------


Can you point to the line you are referring to ? Will help us all..

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

more details - please refer to this link

http://immigrationboards.com/viewtopic.php?t=137111

[/quote]

[maverick_76]

@rsrameshsunil

Investment is act of pledging and not spending. I'm sure HO or any one else understands this. You have to understand once money belongs to business even you can't withdraw it without following corporation taxation rule. I can imagine things might be different in case of directors loan but I'm sure if you have made capital injection by virtue of share capital - solely this act will be considered as act of investment.

[Iro_2013]

Dear Forum Members!

Thank you for your replies and thoughts.

I totally agree with maverick_76, to spend 200k only for a sake of visa extension it is not a good idea as the money is already invested into your business (it's on your business account). But it doesn't mean that we shouldn't encourage the business growth and expansion.

[rsrameshsunil]

@rsrameshsunil

Investment is act of pledging and not spending. I'm sure HO or any one else understands this. You have to understand once money belongs to business even you can't withdraw it without following corporation taxation rule. I can imagine things might be different in case of directors loan but I'm sure if you have made capital injection by virtue of share capital - solely this act will be considered as act of investment.

I am sure HO does not accept this. They clearly expect you to spend the money fully. What if you inject 200k for the purposes of visa as you said and then later take everything as your own salary. This is clearly stated in policy guidance that all the investment should exclude your own salary. Which means that they expect you to spend all the money on other business related things such as logos, office space, staff salary etc...and prove them that you have not included your own salary for claiming points.

[sky_rise]

Wow finally some life signs appear in the Extension discussions!

One more question:

Employing two people:

- Do the employees need to be on a payroll consecutively? I mean, can I employ now for 3 months over summer period (as part-timers) for 20hrs a week, and then just count their hours?
Or does it HAVE to be for 30hr weeks only that count and with minimum of blocks of 6months each time?

Would help a lot!

SR

[la]

Hi La- Following is the full text from page 40 of the guidance.
I dont see where it says that money from business acount has to be spent. ?

--------------------------

A person involved in
property development
makes improvements of some kind to immovable
property (real estate), which increases its value. A person involved in
property management
is charged with operating immovable property (real estate) for a fee, on behalf of the owner
.
The restrictions on investment in property development and property management are intended
to ensure that the Entrepreneur route is used to promote United Kingdom competitiveness in
business.
There is no objection, however, to you investing in companies that are mainly involved in
construction.
Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.
W
hat is a business in the United Kingdom?
A21.
For the purposes of this application, you must have made a capital investment in a business
operating within the United Kingdom economy and subject to United Kingdom taxation. We will
consider a United Kingdom business to be one that:
1.
has its business premises (unless you are self-employed and do not have a premises) or its
registered office or, if it has no registered office, its head office (for a Director of a company)
in the United Kingdom;
2.
has a United Kingdom bank account showing transactions for the business that are current
(this may be either a business bank account, or a personal bank account for sole traders);
and
3.
is subject to United Kingdom taxation.
Any business that benefits from your £200,000 (or £50,000) investment used for the purposes of
claiming points for this application must be this type of business.
Multinational companies that are registered as United Kingdom companies with either a registered
office or head office in the United Kingdom are acceptable.
Registration as self-employed
A22.
A person setting up as self-employed must register as such with HM Revenue & Customs
within six months of starting up. For more information on the legal requirements see the section
Business and Self-employed at
www.gov.uk/browse/business.
Current appointment report from Companies House
A23.
You must obtain the report from Companies House, for a fee, and send it with your
application. This document shows when you became a director of a company. This will be the
same document for a new business as for those becoming directors of an existing business.
For more information on registration with Companies House, please contact Companies House
www.companieshouse.gov.uk/contact/contactUs.shtml
For information on obtaining the current
appointment report please see
http://www.companieshouse.gov.uk/toolsT ... Info.shtml.
Franchises
A24.
Businesses that are set up as franchises can be accepted for the award of points.
You will
either be self-employed or employed, depending on how you decide to structure the franchise
business, and should provide the appropriate evidence

--------------------------


Can you point to the line you are referring to ? Will help us all..

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

more details - please refer to this link

http://immigrationboards.com/viewtopic.php?t=137111

Please read bold highlighted text

Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.

[sky_rise]

Also found this on other forum:

Within a MAXIMUM of 2 years, you must have created 2 new full time (>30 hrs pw) PAYE (not self employed) jobs for UK ‘settled workers’ (or a net increase of 2 if taking over a pre existing business) ; these jobs must be shown to have existed for at least 12 months before you apply to extend the visa (this will be c3yrs after the initial approval, hance the need to create them within 2 years)

Wow finally some life signs appear in the Extension discussions!

One more question:

Employing two people:

- Do the employees need to be on a payroll consecutively? I mean, can I employ now for 3 months over summer period (as part-timers) for 20hrs a week, and then just count their hours?
Or does it HAVE to be for 30hr weeks only that count and with minimum of blocks of 6months each time?

Would help a lot!

SR

[rahulsingh1]

Hello La-
Its only applicable if the business is in construction.

it does not apply to business other than that i think ?

Hi La- Following is the full text from page 40 of the guidance.
I dont see where it says that money from business acount has to be spent. ?

--------------------------

A person involved in
property development
makes improvements of some kind to immovable
property (real estate), which increases its value. A person involved in
property management
is charged with operating immovable property (real estate) for a fee, on behalf of the owner
.
The restrictions on investment in property development and property management are intended
to ensure that the Entrepreneur route is used to promote United Kingdom competitiveness in
business.
There is no objection, however, to you investing in companies that are mainly involved in
construction.
Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.
W
hat is a business in the United Kingdom?
A21.
For the purposes of this application, you must have made a capital investment in a business
operating within the United Kingdom economy and subject to United Kingdom taxation. We will
consider a United Kingdom business to be one that:
1.
has its business premises (unless you are self-employed and do not have a premises) or its
registered office or, if it has no registered office, its head office (for a Director of a company)
in the United Kingdom;
2.
has a United Kingdom bank account showing transactions for the business that are current
(this may be either a business bank account, or a personal bank account for sole traders);
and
3.
is subject to United Kingdom taxation.
Any business that benefits from your £200,000 (or £50,000) investment used for the purposes of
claiming points for this application must be this type of business.
Multinational companies that are registered as United Kingdom companies with either a registered
office or head office in the United Kingdom are acceptable.
Registration as self-employed
A22.
A person setting up as self-employed must register as such with HM Revenue & Customs
within six months of starting up. For more information on the legal requirements see the section
Business and Self-employed at
www.gov.uk/browse/business.
Current appointment report from Companies House
A23.
You must obtain the report from Companies House, for a fee, and send it with your
application. This document shows when you became a director of a company. This will be the
same document for a new business as for those becoming directors of an existing business.
For more information on registration with Companies House, please contact Companies House
www.companieshouse.gov.uk/contact/contactUs.shtml
For information on obtaining the current
appointment report please see
http://www.companieshouse.gov.uk/toolsT ... Info.shtml.
Franchises
A24.
Businesses that are set up as franchises can be accepted for the award of points.
You will
either be self-employed or employed, depending on how you decide to structure the franchise
business, and should provide the appropriate evidence

--------------------------


Can you point to the line you are referring to ? Will help us all..

No you cannot just keep money in business bank account. Please see below on page 40 of policy guidance.....

Money deposited in a bank account, even if it is in a United Kingdom business bank account, is not counted as investment in business. The money should be used in the business to encourage growth or expansion, to improve services or products and to ensure the business is profitable.

more details - please refer to this link

http://immigrationboards.com/viewtopic.php?t=137111

Please read bold highlighted text

Money should be fully used in the business and not held in the business bank account in order to
qualify for the award of points
Money deposited in a bank account, even if it is in a United Kingdom business bank account, is
not counted as investment in business. The money should be used in the business to encourage
growth or expansion, to improve services or products and to ensure the business is profitable.

[rahulsingh1]

The guidance says 3 years for investments and jobs both.

Where did this new 2 years come from ?

Also found this on other forum:

Within a MAXIMUM of 2 years, you must have created 2 new full time (>30 hrs pw) PAYE (not self employed) jobs for UK ‘settled workers’ (or a net increase of 2 if taking over a pre existing business) ; these jobs must be shown to have existed for at least 12 months before you apply to extend the visa (this will be c3yrs after the initial approval, hance the need to create them within 2 years)

Wow finally some life signs appear in the Extension discussions!

One more question:

Employing two people:

- Do the employees need to be on a payroll consecutively? I mean, can I employ now for 3 months over summer period (as part-timers) for 20hrs a week, and then just count their hours?
Or does it HAVE to be for 30hr weeks only that count and with minimum of blocks of 6months each time?

Would help a lot!

SR

[rahulsingh1]

This was my doubt as well. Bec they state this bit.

But remember, this could be applicable to self-employed persons(which you can be on this visa). They dont hvae a limited company or business bank account. So they need to show investment aka spending..

I am interpreting it. I am not sure...

@rsrameshsunil

Investment is act of pledging and not spending. I'm sure HO or any one else understands this. You have to understand once money belongs to business even you can't withdraw it without following corporation taxation rule. I can imagine things might be different in case of directors loan but I'm sure if you have made capital injection by virtue of share capital - solely this act will be considered as act of investment.

I am sure HO does not accept this. They clearly expect you to spend the money fully. What if you inject 200k for the purposes of visa as you said and then later take everything as your own salary. This is clearly stated in policy guidance that all the investment should exclude your own salary. Which means that they expect you to spend all the money on other business related things such as logos, office space, staff salary etc...and prove them that you have not included your own salary for claiming points.

[sky_rise]

it is from other discussions on the web, was wondering.

The guidance says 3 years for investments and jobs both.

Where did this new 2 years come from ?

[Iro_2013]

Hm.... very interesting. If La is right and I need to spend for business purposes the whole amount of 200k, and then my extension application will be rejected. How can I secure myself? The only way is going to be is to sell the business and move out from the country?

[Iro_2013]

rahulsingh1

For example, you were rewarded with 3 -years Tier 1 Entrepreneur on the 20th of December 2011, therefore in two years on the 20th of December 2013 you should hire two full-time workers, so that by the time of your extension application they would worked for your business for one year.

[sky_rise]

it cant be correct. what if i hire 4 people for 6 months each?

rahulsingh1

For example, you were rewarded with 3 -years Tier 1 Entrepreneur on the 20th of December 2011, therefore in two years on the 20th of December 2013 you should hire two full-time workers, so that by the time of your extension application they would worked for your business for one year.

[Iro_2013]

Sky_rise, please read below:

The employment created:
• does not need to be in a single period. It can be made up of shorter periods;
• does not need to be for any particular number of workers. A single person may be
employed for this time, or several people; and.
• must comply with the United Kingdom regulations, including the working time directive.
You can find more information on the business link website: http://www.businesslink.gov.
uk/.
93. Only employees of your business will qualify. Self-employed contractors who are working for
your business will not qualify for the award of points.
94. EXAMPLES: We would consider the following as acceptable employment:
• The working hours of two part-time workers can be combined to add up to 30 hours a
week or more and form the equivalent of one full-time post.
• A worker who is employed for part of a year and then leaves the job can be replaced
by another worker so that the employment as a whole adds up to 12 months. However,
if there is a gap between one worker leaving a post and another worker starting
employment, the period when the post is not filled will not be counted. Only periods
during which a worker is employed in a post will be considered.
• A single worker can be employed for 24 months. The employment can also be made up
of a six-month period for one worker and an 18-month period for another.
• If four workers are employed for 26 weeks (six months) each, their hours of employment
may be added together.

[sky_rise]

ok thanks. then this concerns me a bit:

• A worker who is employed for part of a year and then leaves the job can be replaced
by another worker so that the employment as a whole adds up to 12 months. However,
if there is a gap between one worker leaving a post and another worker starting
employment, the period when the post is not filled will not be counted. Only periods
during which a worker is employed in a post will be considered.


This implies that it must be a continues employment of every week for the period of 12 months. But if we have 4 workers continues full time for the period of 6 months - in terms of hours it is the same..

Sky_rise, please read below:

The employment created:
• does not need to be in a single period. It can be made up of shorter periods;
• does not need to be for any particular number of workers. A single person may be
employed for this time, or several people; and.
• must comply with the United Kingdom regulations, including the working time directive.
You can find more information on the business link website: http://www.businesslink.gov.
uk/.
93. Only employees of your business will qualify. Self-employed contractors who are working for
your business will not qualify for the award of points.
94. EXAMPLES: We would consider the following as acceptable employment:
• The working hours of two part-time workers can be combined to add up to 30 hours a
week or more and form the equivalent of one full-time post.
• A worker who is employed for part of a year and then leaves the job can be replaced
by another worker so that the employment as a whole adds up to 12 months. However,
if there is a gap between one worker leaving a post and another worker starting
employment, the period when the post is not filled will not be counted. Only periods
during which a worker is employed in a post will be considered.
• A single worker can be employed for 24 months. The employment can also be made up
of a six-month period for one worker and an 18-month period for another.
• If four workers are employed for 26 weeks (six months) each, their hours of employment
may be added together.