Genuine Ent Act (contract of service with another business)

Hi,
Can some one please elaborate about the below point A41 from T1 E Guidance?
What does it mean by the underlined content?

I work as a contractor for an IT company through a recruitment agency.
The contract of my business is with recruitment agency and recruitment agency has a contract with IT company.
The payment is done by recruitment agency in my business bank account.

Please advise

Genuine Entrepreneur Activity (contract of service with another business)
A41. If you are granted leave to enter or remain as Tier 1 (Entrepreneur) migrant, your leave will
prohibit you from engaging in employment except where you are working for the business which
you have established, joined or taken over. You will comply with this restriction if, for example, you
are employed as the director of the business in which you have invested, or if you are working in a
genuinely self-employed capacity. In this capacity you will have a contract for service.

You may not, however, be considered to be working for your own business if the work you
undertake amounts to no more than employment by another business (for example, where
your work amounts to no more than the filling of a position or vacancy with, or the hire of your
labour to, that business, including where it is undertaken through engagement with a recruitment
or employment agency). In this capacity you would have a contract of service. This applies even
if it is claimed that such work is undertaken on a self-employed basis.
...............

Thanks

The policy indicates that obtaining contracts via recruitment or employment agencies is considered EMPLOYMENT.
Based on that, you are currently in breach of the conditions of your visa.
Cheers

@mfh
Yes I agree with Julesxander, you will have to be very careful with this, please seek legal expert advice asap.

Irfanmz wrote:@mfh
Yes I agree with Julesxander, you will have to be very careful with this, please seek legal expert advice asap.

HI there,

Am also having the same problem right now. any expert advise will be much appreciated.

@ mfh: Did you find any other information on your case? as I am also planning to do contracting the way you explained. I will rethink if it is not allowed.

What about the people who applied before April 2014 as it was not mentioned before in the policy guide.

Cheers

This was not clear until April 2014 when it showed up in the guide. If you do any work through your company which amounts to merely filling a post in another company (e.g contracting for services), then you are not really an entrepreneur because you are running a Personal Service Company. You could be affected by the HMRC's infamous IR35 tax rules and you will be required to pay extra taxes too. You also will not be able to enjoy certain benefits as a company director.

Read more: https://www.gov.uk/guidance/ir35-find-out-if-it-applies

If IR35 applies to you under any circumstance, then you are in breach of your conditions of stay

I guess this is one of the discussions or worry for IT contractors on Entrepreneur visa. Some agencies like Hays have spotted this early and are excluding these visas for contract work.


What I can see, the rules will apply to you only at the time of the application. So if you have applied entrepreneur visa before April 2014 then you are not affected by the changes. But however for the later extensions or ILR you will certainly do.

there's further discussion on this here, http://www.immigrationboards.com/uk-tie ... 34370.html

Any inputs / comments are appreciated.

stak wrote:I guess this is one of the discussions or worry for IT contractors on Entrepreneur visa. Some agencies like Hays have spotted this early and are excluding these visas for contract work.


What I can see, the rules will apply to you only at the time of the application. So if you have applied entrepreneur visa before April 2014 then you are not affected by the changes. But however for the later extensions or ILR you will certainly do.

there's further discussion on this here, http://www.immigrationboards.com/uk-tie ... 34370.html

Any inputs / comments are appreciated.

You should avoid most of what considers to be IT contracting on your own. If you end up in a contract in which you are personally responsible to perform a certain work (a contract bears your name and makes you responsible) rather than your business, then it is fair to argue that you are not an Entrepreneur. However this became quite clear after April 2014 in the guide and people who got their visas before that, were not given such conditions. Generally you better avoid this type of work altogether to prevent any unnecessary headaches.

zimba88 wrote:

stak wrote:I guess this is one of the discussions or worry for IT contractors on Entrepreneur visa. Some agencies like Hays have spotted this early and are excluding these visas for contract work.


What I can see, the rules will apply to you only at the time of the application. So if you have applied entrepreneur visa before April 2014 then you are not affected by the changes. But however for the later extensions or ILR you will certainly do.

there's further discussion on this here, http://www.immigrationboards.com/uk-tie ... 34370.html

Any inputs / comments are appreciated.

You should avoid most of what considers to be IT contracting on your own. If you end up in a contract in which you are personally responsible to perform a certain work (a contract bears your name and makes you responsible) rather than your business, then it is fair to argue that you are not an Entrepreneur. However this became quite clear after April 2014 in the guide and people who got their visas before that, were not given such conditions. Generally you better avoid this type of work altogether to prevent any unnecessary headaches.

Hello Zimba,

I don't see its a problem with the current grant of leave to remain as the rules apply at the time of application. With regards to IT contract, the business includes but not limited to these services. For example you can have other services / contracts on other hand.

And for the extension, it is advised to stop this well before and plan your business activities to be genuine. As of when at the time of extension you have to have a valid contract which proves your genuine entrepreneur activity. This shouldn't include employment agency in the middle and if you are working with end client, the contract should be of "Contract for services" rather than as a replacement of vacancy or person's work. But you have to be careful with the type of the contract made with end client as well.

In policy gudiance UKBA indicates that obtaining contracts via recruitment or employment agencies is considered EMPLOYMENT.
Based on that, you are currently in breach of the conditions of your visa.

Majid12 wrote:In policy gudiance UKBA indicates that obtaining contracts via recruitment or employment agencies is considered EMPLOYMENT.
Based on that, you are currently in breach of the conditions of your visa.

Hello Majid,

If you have granted leave to remain on =>

After April 2014,

As per the latest policy guidance, you cannot work. I agree with you.

Before April 2014,

I am referring to the policy guidance in 2013, thats when, the applied visa is given by the policy guidance at that time.

Heres a copy of policy guidnace in 2013, http://webarchive.nationalarchives.gov. ... dance1.pdf

But you will be subjected to the latest policy guidance when you want to extend your visa in the same category.

I would say that you should apply common sense and then it will not be difficult to see that working as an IT contractor even via a limited company or as a self-employed really is not what considered entrepreneurship and surely it is not what Tier 1 entrepreneur immigration route intended to attract. Entrepreneurship means you start a business, build a brand, take risks, create jobs, innovate and contribute to the economical growth.
Forget about the rules and if they were not clear ! HO can argue quite successfully that IT contracting is not genuine entrepreneurship and you are rather a temporary employee in some other business. That is why I suggest to avoid contracting at all costs.

Admins there should be a thumbs up button for the posts people agree to, I am having to type this message just to show my agreement with the last post by zimba which is absolutely correct, you are not an entrepreneur if you worked an IT contract

@Zimba and @solomdid, I do definitely agree the IT contracting is not valid Entrepreneurship, this applies only after the rules since April 2014.

If you are going for extension or have got visa after the rules has been changed, then you have to run genuine entrepreneurship.

And in that with regards to IT contracts doesn't work if you have Agency in the middle.

If you are engaging directly with end client, it depends on the contract you made with them. However this wont be genuine entrepreneurship if you are filling a position in a company.