Urgent !! Extra Income Query

Thanks to ImmigrationBoards, I was able to find answers to my questions when I applied for Tier 1 G for first time years ago.

This time around again I am going for Tier 1 G extension in Match 2015 and urgently need help to answer a question :- How do I show the money earned as a self-employed contract work?

The premise is: 95% of my salary criteria is being fulfilled by my Permanent employment. I took an IT contract work from a company (regsitered in India) in 1st Jan, 2015 to cover rest. As of now all documents I have is the invoice which I send to the company and the bank statement which shows the money being depostied in my personal account from their business account.

1. Are the invoices and the bank statement enough for UKBA to see it as extra earning? Would they need further documents/proofs? Also if invoices going to help, does UKBA accept it in any particular format?
2. Is the other company being registered in India an issue? The copmany is not one of the big companies but is a prominent player in its own niche work. They have offices in USA and India.
3. Do I need to pay tax on self-employed income before going for extension?

Also regarding the tax on self-employed income, a tax accountant mentioned I cannot pay tax on it untill April, 2015 which is no good for my March appointment iff I need the taxation to be done before extension.

Your help and suggestions much appreciated!
Thanks in advance
Arun

Hi Mate,

No offence , but what you have describe is not looking good.
I think you need to learn bit more on Self employment presenting an invoice to UKBA to overcome the shorthaul is not going to work.

There few key requirement which needs to be in place before your case looks GENUINE.

UTR number
Tax Return:
Company Account
Remittance advice
Account statements

Etc...

The SE route for T1 and ILR is very very tricky and UKBA dont leave any stone unturned. The best option is to find a part time JOB in uk and cover the shortage.

Again its an advice, nothing personal.

KR
A

First be clear, any income earned outside UK, needs to be declared and taxed in UK.

https://www.gov.uk/tax-foreign-income/overview

Read this clearly and do a SA for the same as this income is not PAYE, also as askhan mentioned. from 1st Oct 2013 HO is scrunitinzing all SE and genuine income/earnings tests.

Thanks,

Thanks to askhan and argus7 for your invaluable inputs.

1. I had applied for UTR number 4 weeks ago, I should be getting it now soon. My accountant mentioned it will take approx 6 weeks and I can already start working even before getting the same in hand.
2. I was in touch with a UK Accountant to understand the process. I was not told if I need a company account for this purpose. Do I?
3. I have my personal bank account's statements for all my earnings. Is that ok?
4. I am not sure what "Remittance advice" is ? Is it same as proof of bank transaction? I hve my bank statement for the same and also can ask my client to retain the copy of bank cheques/etc.
5. As per the Accountant, I cannot have Tax Return earlier than April for an income earned in Jan/Feb this year. Is that correct? How do I address if UKVI insists on it or anything else of similar nature?

I called UKVI (UK Visa and Immigration) and they mentioned, to prove Self employed income, presenting Invoices, Bank statement, UTR number and tax return would be enough. Also Doing international business is ok as long as I have above in place. I pointed out the inability to have tax return, as my self employment started after previous financial year started. To that they did not answer very clearly but mentioned they would give me some time to present any further document if they need me to.

@argus7, regarding one of your input:

"First be clear, any income earned outside UK, needs to be declared and taxed in UK."

I am more than happy to do that, but as per the accoutant I have to wait till April to declare this financial year's earnings / do SA, but waiting till April is not an option as am going for extension in March. Am I being guided correctly by the accoutant ?

As per askhan's advice of looking part time job in UK itself, that route is quite tough for me now to try because of amount of time in hand vs the extra income which I have to generate. I strategically started in December to go thorugh my professional connection to find a part time contract to fulfill earning criteria. I hope to be able to use the same.

@argus7, can you please tell more what genuine earning test might mean when you said:
"from 1st Oct 2013 HO is scrunitinzing all SE and genuine income/earnings tests."

My client is a genuine company (registered in USA, India and Japan but not in UK) and they are happy to tell UKVI about nature of my work if contacted.

Appreciate your advises!
Thanks
Arun

You say about bank statement from your personal account, what about the second source of evidence payslips? How are they issuing you a payslip.

I am not sure what your accountant has advised,where is the tax going to be deducted at source?

For me as of now there is no payslip. I was not sure if a company would give you a payslip if you are not a permanet employee.
My understanding regrading payslips in self-employment may not be very good but AFAIK payslips are there for a company to show what is gross and net payment to its employee. In my case entire payment is gross as the copmany cannot deduct tax on my behalf as it is not a UK company.

What alternative I have to this? Does the copmany have to give me payslip or I can take help of an Accountant in this regard?

Thanks

if your co is giving you gross then you need to register as a self employed / register for SA and declared that untaxed income. I am not a tax expert or person doing self employment. But it is a tedious and long process.

Consult a tax advisor and an immigration lawyer to get the clarity on how would would be overcoming this pitfall.