ILR - tax discrepancy in 2010

[titinho]

Hi all.

I had my premium appointment last week in Croydon, but they couldn't make a decision on the day and asked for a letter from HMRC stating my earnings from 2009 until 2015. I found it strange that they asked for all these years and wondered if they found a discrepancy somewhere that could lead to refusal of my application.

I had always declared foreign dividends and paid tax over it, but after going through my tax returns, I realised I hadn't declared about £33,000 in foreign dividends for year ending 2010, which coincides with my initial tier 1 general application. These dividends wouldn't have generated tax to be paid due to tax credits. Plus, I declared every single £ of foreign dividend after that (including some £15,000 that fell within the period I claimed for Tier 1). But I worry that HO will categorise what was left out as deception and refuse my application.

Now I'm not sure how to proceed. I have spoken to my accountant and I'll inform HMRC of these earnings this week (and possibly pay a penalty, which is fine). But HMRC seems to take at least 6 weeks to update their systems.

Now the possibilities I have in mind are:

1- take my chances and submit the earnings statement as is, hoping for the best.

2- submit the statement but write a letter admitting my inexcusable mistake and my action to make amendments, along with letter from accountant confirming this and a copy of the letter I sent the HMRC.

3- if the fee could be refunded, withdraw my ILR application and apply again when HMRC records are straight.

Any thoughts? I just don't want to risk a refusal, but I'm not sure they only want

For the ILR application I relied solely on my earnings as self employed (so no foreign dividends). I know they're quite picky with self employment, so I wonder if all they want is to confirm my self employed earnings rather than closely investigate my tax returns.

Thanks.

[ilrvisanow]

Best option will be no 3. If you can withdraw application sort Hmrc out and apply. If you can't than you must send amendments to Hmrc and attach a letter saying you're waiting for them to do amendments.

Option of taking risk might not be wise .

[titinho]

Thank you for replying.

Does withdrawing an application negatively affect new applications? and also, would I get a refund of the fee?

Many thanks.

[guaravd]

Thank you for replying.

Does withdrawing an application negatively affect new applications? and also, would I get a refund of the fee?

Many thanks.

Withdrawing the application shouldn't impact you negatively but I doubt HO will refund your fees.

[titinho]

Thank you.

But being refused would definitely affect future applications, right? Even if I disclose my mistake this time, do you think they could categorise deception and prevent me from applying again?

Thanks!

[guaravd]

Thank you.

But being refused would definitely affect future applications, right? Even if I disclose my mistake this time, do you think they could categorise deception and prevent me from applying again?

Thanks!

If they reject your application due to mismatch in income you declared with HMRC and income you showed to HO for claiming points then you can correct the records, sort out the tax and re-apply. Did you used those £33000 dividends to claim points ?

[muraxza]

Thank you.

But being refused would definitely affect future applications, right? Even if I disclose my mistake this time, do you think they could categorise deception and prevent me from applying again?

Thanks!

@titinho

I would suggest you, withdraw your application asap although while doing this they would certainly flag this in your account but they wouldn’t impose any deception so your future application will be safe but they may ask this why did you withdraw previous application at the time of new application which you can give them any reasonable excuse, secondly sort your difference with hmrc asap as their current processing timeline is from 3 months to 6 months..

[titinho]

Thank you all for the advice.

I claimed about £45000 for my initial tier 1 application, all in foreign dividends. £33000 fell within tax year 2009/2010, which I failed to declare. The rest (£12000) I did declare in the following year (2010/2011), and have been declaring it ever since. Do you think the HO would take into consideration me being upfront about it and trying to amend things right away, and the fact that all other years are in order?

[muraxza]

Thank you all for the advice.

I claimed about £45000 for my initial tier 1 application, all in foreign dividends. £33000 fell within tax year 2009/2010, which I failed to declare. The rest (£12000) I did declare in the following year (2010/2011), and have been declaring it ever since. Do you think the HO would take into consideration me being upfront about it and trying to amend things right away, and the fact that all other years are in order?

Unfortunately HO only interested in your first & extension years earning and records with HMRC rest of the years they are not bothered because of the rule

[ilrvisanow]

Did you submit:
1. Employment history
2. SA302?

Please respond.

[titinho]

I submitted self-assessment forms from previous 5 years (year ending Apr 2011-2015). All declaring income in foreign dividends and self employment. The problem is that I neglected to file a tax return for 2010, and now HO is asking for statement of earning from HMRC from 2009 onwards.

I'll amend 2010 ASAP, but I don't know wether to take the risk and carry on with my application, stating the discrepancy and my action to amend it, or lose money by withdrawing and wait until HMRC has updated their records, and then apply again. My current tier 1 expires in 11 weeks though, so not sure HMRC will have updated things by them.

Any thoughts?

[ilrvisanow]

I submitted self-assessment forms from previous 5 years (year ending Apr 2011-2015). All declaring income in foreign dividends and self employment. The problem is that I neglected to file a tax return for 2010, and now HO is asking for statement of earning from HMRC from 2009 onwards.

I'll amend 2010 ASAP, but I don't know wether to take the risk and carry on with my application, stating the discrepancy and my action to amend it, or lose money by withdrawing and wait until HMRC has updated their records, and then apply again. My current tier 1 expires in 11 weeks though, so not sure HMRC will have updated things by them.

Any thoughts?

I don't understand why are they asking from 2009 if anything they should ask from 2010. Did you get any visa in 2009. What was tier 1 issue date?

[titinho]

Sorry for the delay in replying.

Not sure why they're asking from 2009, as my first tier 1 was issued in Sept 2010.

Anyway, in the end I discovered that the issue with the 2010 tax was my accountant's fault, as I had submitted the info to him at the time, but he hadn't filed a tax return for that year (still not sure why). Of course it's my responsibility in the end, so we contacted HMRC last week and sent a cheque for the tax that would be due. I'm currently waiting for HMRC's acknowledgement, also to find out how much penalty there will be.

I decided carry on with the ILR application, and so I sent the information that the HO asked (statement of earnings from 2009 to date), and included a letter from my accountant explaining the issue and admitting fault, as well as a copy of the letter and cheque sent to HMRC (and proof of postage). I asked them to hold their decision if they wanted to see an acknowledgement from HMRC, which I will send as soon as I receive it.

So now it's the waiting game, but I'm hopeful. I think it's better to be honest and forthright in these cases, even when things are not straightforward. I'll let the forum know when I receive a decision.

[tungha1979]

Sorry for the delay in replying.

Not sure why they're asking from 2009, as my first tier 1 was issued in Sept 2010.

Anyway, in the end I discovered that the issue with the 2010 tax was my accountant's fault, as I had submitted the info to him at the time, but he hadn't filed a tax return for that year (still not sure why). Of course it's my responsibility in the end, so we contacted HMRC last week and sent a cheque for the tax that would be due. I'm currently waiting for HMRC's acknowledgement, also to find out how much penalty there will be.

I decided carry on with the ILR application, and so I sent the information that the HO asked (statement of earnings from 2009 to date), and included a letter from my accountant explaining the issue and admitting fault, as well as a copy of the letter and cheque sent to HMRC (and proof of postage). I asked them to hold their decision if they wanted to see an acknowledgement from HMRC, which I will send as soon as I receive it.

So now it's the waiting game, but I'm hopeful. I think it's better to be honest and forthright in these cases, even when things are not straightforward. I'll let the forum know when I receive a decision.

Did you applied for your ILR as salatried or self employed or combination of both?

[titinho]

ILR only as self-employed.

[muraxza]

ILR only as self-employed.

Hi titinho

have you received any update from HMRC yet and did they cash your cheque? you could also pay this to them via online.

[titinho]

Hi Blocked Username,

No updates from HMRC yet, and cheque hasn't been cashed yet. I'll try to give them a ring on Saturday.

Likewise, no updates from HO either. I'll keep the forum posted.

[muraxza]

Hi Blocked Username,

No updates from HMRC yet, and cheque hasn't been cashed yet. I'll try to give them a ring on Saturday.

Likewise, no updates from HO either. I'll keep the forum posted.

Hi titinho

you better pay this via online using your UTR as this is quick and will reflect in your account within a week so. HMRC is going quite slow timeline is roughly over 4 months to process SA's

[titinho]

Dear all,

Just writing with an update on my case.

Today I received the letter of APPROVAL for ILR, for both myself and my wife.

For those who don't know, I had a PEO appointment in Croydon on 23/10, where I got a letter requesting a statement of earnings from HMRC from 2009 onwards. I applied to ILR as self employed, but at tier 1 general initial application and extension I claimed earnings in foreign dividends.

My complication was that when I phoned HMRC, I realised that a self assessment for 2009-2010 hadn't been filed (despite me sending the figures to my accountant at the time) and so there were £37,000 in foreign dividends that weren't declared. This would have been a problem, because my initial tier 1 general was in 2010, and these dividends were part of the earnings claimed.

So a couple of weeks ago I instructed my accountant to file a tax return for 2010 and declare these dividends, and I enclosed a cheque for the tax due (about £1000). The next day I sent to the HO the HRMC statement of earnings as requested, along with an explanatory letter from my accountant (saying that I had indeed submitted the figures at the time), a copy of the self assessment, a copy of the cheque and proof of postage. I also wrote a letter explaining my case.

I'm very relieved that the HO saw my attempt to make amendments favourably. What I learned from this is to always be forthright and upfront about things, even if they seem problematic.

I also consulted with an immigration advisor, who advised on pursuing the application.

Best of luck to the rest who are waiting for their decisions.