Tier-1 Extension general (Mistakenly checked Self-employed)

[sparsh]

Submitted Tier-1 Extension (general) form, but checked question B26 as Self-employed.

I work for my own Limited company as a IT contractor. From other post I understand that I should have selected employee. What can be done now? As for my earnings proof I have submitted pay slips & dividend vouchers, personal&business bank statements and accountant letter.

Also in the Cover letter I have mention that I am self-employed and work for my own LTD company. Can anything be done now??

[John]

Submitted Tier-1 Extension (general) form, but checked question B26 as Self-employed.

I think that is right. It is confusing but I think from the immigration point of view you are self-employed, whereas from the tax point of view you are .... a Director!

I hesitate to say you are an employee because you are not an employee of your company, unless a Contract of Employment has been drawn up, and that would not be common action.

Instead you are the holder of an office, namely the office of Director.

On the Self Assessment tax form income from an office or from an employment is entered in the same place.

[sparsh]

I have comfirmed from HMRC Director of a LTD company falls under Employee.

I called up public enquiry office no. (0870 606 7766 option 4) and asked what can be done. they advised me to post/fax a letter to Shefield office.

Anyone who has provided a letter/clarification to the case worker after submitting the tier-1 extension application can share your experiences.

[John]

I have comfirmed from HMRC Director of a LTD company falls under Employee.

You have? So why do HMRC refer to "Income from Office or Employment"?

In any case, there is no dispute that from the tax point of view the income is from an Office or employment. But that does not stop the immigration people taking a different view ..... as I stated in my previous post.

[sparsh]

so what should I do now, I haven't registered my self as self employed nor I have paid Class 2 NI because as per HMRC I am an employee.

[geriatrix]

Even from an immigration (Tier 1 (General) assessment) perspective, you are employed by (your) limited company as an employee.

Have you received a reference number?

Call up UKBA and enquire to which address you should send an amended application form.

Fill up a new form.
Write a covering letter, include reference number and personal information (name, dob, passport no., nationality) and state that you are enclosing a new application form and that this amended form should be used when assessing your application.
Post the letter+form to the address advised by UKBA.

[John]

Even from an immigration (Tier 1 (General) assessment) perspective, you are employed by (your) limited company as an employee.

Where is the proof of that? Absolutely nothing in this topic shows him to be an employee. To be an employee of his limited company someone would have needed to draw up a Contract of Employment.

Please have a look at this UKBA document and on page 33 there is a section headed "Self-employed earnings within a business or company structure".

[geriatrix]

Where is the proof of that?

I would say .. his payslips. AIUI, only an employee gets salary / pay slips. His employer (limited company) pays him salary and issues him payslips.

That he happens to be a majority (or only) shareholder of the limited company (his employer) has no bearing on his application other than that he (as a majority / only shareholder) must have complied with company / taxation laws. Had he not been a majority shareholder, he (as a Tier 1 applicant) wouldn't need to to prove such compliance for Tier 1 assessment.

UKBA is not bothered if a "contract of employment" has been signed or not. For them, payslips = employed. No applicant is required to submit their "contract of employment" to prove that he is "employed". Payslips or a letter from employer certifying salary payouts is sufficient.

Not an expert on HMRC / taxation matters but I believe self-employed individuals are liable for paying Class 2 National Insurance contributions, but an employee is not. And I don't think the OP (as a "self-employed" individual) is paying any .... the limited company may be (if required by law).

PAYE?


The text you refer to is relevant to only those who retain / keep their earnings within the business or company (e.g. - sole trader, proprietor etc. where in personal income is a part of the business profit, and simply withdrawn or transferred to a personal account). For those who take payslips, the preceding paragraphs apply (for OP the one immediately preceding the one you refer to, since he is taking salary and also dividend).

My point - how Tier 1 (General) applications are assessed is different from how HMRC defines "self-employed" and how "self-employed" are assessed for tax purposes.

[John]

My point - how Tier 1 (General) applications are assessed is different from how HMRC defines "self-employed" and how "self-employed" are assessed for tax purposes.

I thought that was my point! And accordingly the person is not classified as self-employed for tax purposes, and accordingly no need for the person to register as Self Employed for tax purposes, or pay Class 2 NICs.

[geriatrix]

Oops! Point withdrawn.

So, from UKBA's and HMRC's perspective the OP is an "employed" individual.

[sparsh]

@sushdmehta's
Should I send the entire form or Just that one page?

I am getting different amswers from the UKBA help line.

And I was told that it is entirely up to the case worker whether to consider my request...

[John]

sparsh, there is nothing for you to do. Whilst HMRC consider you to be the holder of an office, namely, the office of Director, UKBA consider you as self-employed, so it was totally right for you to tick the self-employed box on the application form.

I am not surprised you are getting conflicting advice from the so-called helpline that UKBA operate. That "helpline" has a reputation for sometimes not being very helpful.

[sparsh]

@Jhon,

If I am self-employed than as per giudence notes I must provide additional evidence for my previous earnings like
1. Proof of my registration as self-employed with HMRC and
2. Class 2 NI

[geriatrix]

I re-iterate: From a Tier 1 (General) assessment perspective you are "employed" - for the reasons I have explained above.

Any intelligent caseworker should be able to figure out this (very minor and) inadvertent mistake on the form and ignore it (or correct it himself / herself, for record), but having observed the caseworkers refusing applications because of their own silly mistakes in assessing the application and their incompetence, if I were you I would do not take any chances and would do as I have suggested above.

Your choice!

[John]

I re-iterate: From a Tier 1 (General) assessment perspective you are "employed" - for the reasons I have explained above.

Well no, I thought you had conceded the point!

[John]

@Jhon,

If I am self-employed than as per giudence notes I must provide additional evidence for my previous earnings like
1. Proof of my registration as self-employed with HMRC and
2. Class 2 NI

No, you don't need to do either of those things, as already explained.

[geriatrix]

The statement (my point) was made with the impression in mind that HMRC considers the OP as "self-employed". Since it is not the case, as you have pointed out (which I missed), best that the statement in question be ignored altogether.

As for how UKBA considers the OP, I stand by what I have previously stated and explained in detail - OP is an "employed" applicant.

[John]

OK, let's just ignore the detailed UKBA document.

[geriatrix]

OK, let's just ignore the detailed UKBA document.

Well, no.

@Jhon,

If I am self-employed than as per giudence notes I must provide additional evidence for my previous earnings like
1. Proof of my registration as self-employed with HMRC and
2. Class 2 NI

No, you don't need to do either of those things, as already explained.

If the OP is to be considered "self-employed" as you suggest, then as per Tier 1 (General) policy guidance, he must provide these documents - else his application might be refused by an incompetent caseworker who fails to note that B26 was filled in error.

113. In addition to the documents required to demonstrate earnings, applicants claiming points for self-employed earnings made in the UK must provide documents to show that they are registered as self-employed and were registered as self-employed for the period when this money was earned.

115. If the applicant is claiming earnings from self employment in the UK, he/she must provide evidence that he/she was paying Class 2 National Insurance contributions during the period/s of self-employment used to claim points.

The way I understand the detailed UKBA document, OP is "employed" and there is no need for such documents.


I rest my case.

[John]

But none of what you post explains, from the document you have provided a link to, at 120, a section headed "Self-employed earnings within a business
or company structure".

[geriatrix]

(The text you refer to in) Point 120 is relevant to individuals to whom point 93 applies.

If an applicant has worked in a self-employed capacity in his/her own business or company structure and has chosen to keep his/her earnings within the business or company

e.g. - assuming sole ownership of business / company, net profit of the business / company = personal income of the individual.

[John]

I give up! I am not going to continue to post the same thing time after time.

The situation is totally clear as far as I am concerned.

I shall not post again in this topic.

[geriatrix]

Guess It's time for me to concede - totally - after all!

Having spent considerable part of the night exploring the minute details regarding self-employment, and in desperate search of any UKBA guidance on the matter, I found the answer at the most obvious place - immigration rules!

Under Part 6A of these Rules, "Self-Employed" means an applicant is registered as self-employed with HM Revenue & Customs, or is employed by a company of which the applicant is a controlling shareholder.

So, I admit that there is nothing to be done - as John was repeatedly trying to put into my head (and ended up being annoyed, thanks to my ignorance on the matter).

Apologies, John.
Apologies to the OP as well ..... for creating this utter confusion!


Now, me the punching bag waiting for the blows!

[sparsh]

@sushdmehta
@JHON

So from your comments I gather that I would come under self-employed catogery.

And these 2 requirements would not be aplicable to me
1 Class 2 NI
2 register with HRMC as self-employe

Please let me know if I have correctly understood.

[John]

Please let me know if I have correctly understood.

That is right, HMRC class you as "employed", so you do not need to register with them as self-employed.

And this applies even though UKBA class you as self-employed, which confirms that your completion of the application form was correct.

In short, nothing for you to do, except wait for the visa to arrive!