TIER 1 ENTREPRENEUR VISA EXTENSION REFUSED 27th Nov 2017 - Need guidance

BK14 · Post by **BK14** » Sun Jan 07, 2018 10:57 pm

Hi Marcnath,

Will below help, I simply copy-pasted as I can not upload here.

INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2017
2017 2016
£ £
Turnover 157,057 103,549
Cost of raw materials and consumables (32,670) (24,405)
Staff cost (52,965) (30,590)
Depreciation and other amounts written off assets (3,100) (2,788)
Other charges (35,168) (36,985)
Tax (2,708) -
Profit 30,446 8,781

2017 2016
£ £
Fixed assets 41,349 15,354
Current assets 60,194 39,068
Creditors: amounts falling due within one year (85,470) (59,745)
Net current liabilities (25,276) (20,677)
Total assets less current liabilities 16,073 (5,323)
Creditors: amounts falling due after more than one year (15,984) (3,034)
Net assets/(net liabilities) 89 (8,357)
Capital and reserves 89 (8,357)
For the year ending 30 June 2017 the company was entitled to exemption from audit under section 477 of the Companies Act 2006
relating to small companies. The members have not required the company to obtain an audit in accordance with section 476 of the
Companies Act 2006.
The director acknowledges his responsibilities for complying with the requirements of the Act with respect to accounting records
and the preparation of accounts.
These accounts have been prepared in accordance with the micro-entity provisions of the Companies Act 2006 and FRS 105, The
Financial Reporting Standard applicable to the Micro-entities Regime.
Approved by the board on 8 October 2017

My Name
Director

FOR THE YEAR ENDED 30 JUNE 2017
This schedule does not form part of the statutory accounts.
2017 2016
£ £
Turnover
Sales 157,057 103,549
Cost of raw materials and consumables
Purchases 32,670 24,405
Staff costs
Wages and salaries 40,423 15,013
Directors' salaries 11,125 10,700
Temporary staff and recruitment - 2,764
Travel and subsistence 2 38
Motor expenses 1,415 2,052
Entertaining - 23
52,965 30,590
Depreciation and other amounts written off assets
Depreciation 1,700 1,388
Amortisation of goodwill 1,400 1,400
3,100 2,788
Other
Rent 15,100 12,000
Rates 4,597 5,556
Light and heat 1,141 1,595
Use of home 4,800 4,800
Telephone and fax 825 1,404
Stationery and printing 635 1,095
Bank charges 671 278
Insurance 1,144 573
Equipment expensed 63 158
Equipment hire 618 279
Software 169 300
Repairs and maintenance 266 1,163
Sundry expenses 92 658
Accountancy fees 1,463 1,324
Management fees 2,000 1,738
Advertising and PR 976 572
Other legal and professional - 100
Subcontractor costs 272 3,056
Bank loans and overdrafts 336 336
35,168 36,985

BK14 · Post by **BK14** » Mon Jan 08, 2018 12:25 am

Hi Marcnath,

I am filling out the application for my dependant and currently stuck on Page 23, I do not understand what exactly applies to me here:

Section K - About your Immigration History
In this section you will be asked to provide information about your current and previous immigration
status in the UK, including previous applications that you have made.
K1; What is your current immigration status?
• I have leave to enter / remain for a limited period - Go to K4
• I am an EU national / family member of an EU national - Go to K4
• I am exempt from immigration control - Go to K4
• I have leave which has been extended by section 3C of the Immigration Rules – Go to K4
• I had leave to enter / remain for a limited period, which has now expired - Go to K2
• I am applying following the refusal of a previous application for leave which was made intime
or for which the Secretary of State considered there was a good reason why it could not
be made in-time – Go to K2
• I am applying after the expiry date of the time limit for making an in-time application for
administrative review or appeal in relation to the refusal of a previous application for leave –
Go to K2
• I am applying following an administrative review or appeal being concluded, withdrawn
abandoned or lapsing - Go to K2
• None of the above - go to K4
K2; Are you applying within 14 days of;
• Your leave to enter or remain expiring?
Yes – Go to K2A
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas
K2A; Is there a good reason beyond your/your representative’s control why the application
could not be made in time?
Yes – Go to K2B
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas.
K2B; Are you applying within 14 days of;
• the refusal of a previous application for leave which was made in-time or for which the
Secretary of State considered there was a good reason why it could not be made in-time, or
• the expiry of any leave extended by section 3 of the Immigration Act 1971, or
• the expiry date of the time limit for making an in-time application for administrative review or
appeal in relation to the refusal of a previous application for leave, or
• an administrative review or appeal being concluded, withdrawn abandoned or lapsing?
Yes – Go to K3
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas.

Post by **marcnath** » Mon Jan 08, 2018 6:51 am

BK14 wrote: ↑
Mon Jan 08, 2018 12:25 am
Hi Marcnath,

I am filling out the application for my dependant and currently stuck on Page 23, I do not understand what exactly applies to me here:

Section K - About your Immigration History
In this section you will be asked to provide information about your current and previous immigration
status in the UK, including previous applications that you have made.
K1; What is your current immigration status?
• I have leave to enter / remain for a limited period - Go to K4
• I am an EU national / family member of an EU national - Go to K4
• I am exempt from immigration control - Go to K4
• I have leave which has been extended by section 3C of the Immigration Rules – Go to K4
• I had leave to enter / remain for a limited period, which has now expired - Go to K2
• I am applying following the refusal of a previous application for leave which was made intime
or for which the Secretary of State considered there was a good reason why it could not
be made in-time – Go to K2
• I am applying after the expiry date of the time limit for making an in-time application for
administrative review or appeal in relation to the refusal of a previous application for leave –
Go to K2
• I am applying following an administrative review or appeal being concluded, withdrawn
abandoned or lapsing - Go to K2
• None of the above - go to K4
K2; Are you applying within 14 days of;
• Your leave to enter or remain expiring?
Yes – Go to K2A
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas
K2A; Is there a good reason beyond your/your representative’s control why the application
could not be made in time?
Yes – Go to K2B
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas.
K2B; Are you applying within 14 days of;
• the refusal of a previous application for leave which was made in-time or for which the
Secretary of State considered there was a good reason why it could not be made in-time, or
• the expiry of any leave extended by section 3 of the Immigration Act 1971, or
• the expiry date of the time limit for making an in-time application for administrative review or
appeal in relation to the refusal of a previous application for leave, or
• an administrative review or appeal being concluded, withdrawn abandoned or lapsing?
Yes – Go to K3
No – If you wish to apply to continue your stay in the UK, you should leave the UK and
reapply for a visa from overseas.

Post by **marcnath** » Mon Jan 08, 2018 7:04 am

Thanks for posting the accounts.
But it still did not answer my question - where is the 70K shown ?
You should be knowing your own accounts - otherwise you are going to be in trouble if you are interviewed.
The closest I can see to the 70K is Creditors within one year, which then indicates it is a Director's loan. That is the opposite of what you said. And anyway that is a guess without more information.

BK14 · Post by **BK14** » Tue Jan 09, 2018 9:27 am

Hi Marcnath,

Could you please let me know how far back the accounts needs to be prepared? I have cross checked with 2-3 different accountants and they have all confirmed the set of accounts were fine but they were wrongly presented to HO with restricted information, therefore, your application was bound to be refused.

So, I am now preparing the accounts differently with much more information for i.e. directors loan, investment amount etc, however, I need to know do I need to go back to the date I started the Business or 2016 - 2017 will be fine plus the management accounts up until Dec 2017?

Best Regards

Post by **marcnath** » Tue Jan 09, 2018 9:52 am

All you need is one set of accounts- does not matter which one. So either 2016-2017 or the management accounts to Dec is sufficient

BK14 · Post by **BK14** » Tue Jan 09, 2018 9:56 am

Hi Marcnath,

Thank you, so basically last 1 year is fine with added management accounts to date?. Also, now I am showing the investment by Director Loan and I can show the statement of the funds transferred but those funds came directly to my Business Account rather personal and with Director Loan I believe it should come from Personal to Business?

So, what do I need to do here? Also, I have not instructed my Accountant to remove me from my Payroll so I will advise him now to remove me immediately.

BK14 · Post by **BK14** » Tue Jan 09, 2018 9:48 pm

Hi Marcnath,

I would really appreciate if you can shed some light whether I can apply with Director loan or I need to put some different notes within the accounts? Since the money invested was from directly from a Business account.

The funds deposited were in Business account rather personal.

Post by **marcnath** » Tue Jan 09, 2018 10:04 pm

The requirement for investment by DL is:

If you have made the investment in the form of a director’s loan, it must be shown in both the relevant set of financial accounts provided and through readily identifiable transactions in the applicant’s business bank statement(s). The statement(s) must clearly show the transfer of this money from you to your business

The underlined parts are key. It does not have to come from a personal account, but your name need to be against the transaction in your bank statement.

But you may be lucky with the latest changes. If you apply after 11th Jan, the new rule is effective and that says:
where the investment was made after 19 November 2015,the investment must be shown through readily identifiable transactions in ......
So, bank statement are not needed for investments made before 19/11/2015.

Read the full guidance - the requirement is very clear in the guidance as to what else is needed.

There is another aspect about your case that I am not sure about. You showed funds available from the VC but now you will be showing all the investment as coming from you (because your accounts don't show the VC at all). I can't see anything in the rules that prevents that but I could be wrong. But you don't have any options - if I am wrong, you don't have any alternatives anyway.

BK14 · Post by **BK14** » Tue Jan 09, 2018 10:30 pm

Hi Marcnath,

Thank you for your valued feedbacks, yes initial application was based on VC funds available however afterwards I had to inject my own funds which came from abroad directly into my Business account and thereafter I made payments for i.e. Franchise fee etc.

The only confusion I had is, I switched from Student to TIER 1 and I believe migrants on PSW were allowed to have their own funding etc but not the students at that time. I spoke to another chap who is an accountant and have helped his clients in such cases however he said you can not show a director loan because that money was from Business rather personal so therefore Business account do belongs to you but it would not have your name.

I am only stuck with this accounts issue, rest I have gathered all the relevant documents just this accounts are the issue now.

Post by **marcnath** » Wed Jan 10, 2018 6:51 am

BK14 wrote: ↑
Tue Jan 09, 2018 10:30 pm
Thank you for your valued feedbacks, yes initial application was based on VC funds available however afterwards I had to inject my own funds which came from abroad directly into my Business account and thereafter I made payments for i.e. Franchise fee etc.
The only confusion I had is, I switched from Student to TIER 1 and I believe migrants on PSW were allowed to have their own funding etc but not the students at that time.

I think you are not getting my point. The 50K route was limited to only three sources of funding. In fact, the old guidance said:
Entrepreneurs may not mix their own funds with the funding from the venture capital firm/s, seed funding competitions and/or UK Government Department/s if they are using the provision to invest £50,000. If the entrepreneur wishes to mix such funding he/she will need to invest £200,000 into the UK business.
But you have now mixed your personal funds or are claiming investment by yourself.
What might work in your favour is that this seems to refers to initial application only, not to extension. And that is where I could be wrong. If it applies to extension also (which it should rightfully should) then you should have invested 200K and your 70K investment will be rejected.

BK14 wrote: ↑
Tue Jan 09, 2018 10:30 pm

I spoke to another chap who is an accountant and have helped his clients in such cases however he said you can not show a director loan because that money was from Business rather personal so therefore Business account do belongs to you but it would not have your name.

I am only stuck with this accounts issue, rest I have gathered all the relevant documents just this accounts are the issue now.

Yes, I agree, this is where it is confusing and you don't seem to be able to answer questions about your own business finance.

Money cannot just appear in your business account without any reason - it has to come as equity, income or loan. You still haven't been able to say what the source of the 70K is shown as in your accounts. I understand where it actually is from - you gave the money to a VC and they transferred it to you account. But how that is accounted in your accounts is not clear to me.

BK14 · Post by **BK14** » Wed Jan 10, 2018 9:46 am

Hi Marcnath,

Thank you, the funds came from a EUROPEAN account directly into my Business account and for the new set of accounts they will be shown as an investment. The bank statements can also show the transactions for purchasing franchise etc so they were used lawfully as per HO rules but indeed I made a mistake here because once the visa was granted the VC firm started playing up and I was stuck.

So, I had no choice other than to go that route and pay them the money so that they can transfer they also charged a percentage for doing this, but as I said I was stuck and have no choice. I understand the guidance which you provided but there is no way I can source and inject £200k.

Post by **marcnath** » Wed Jan 10, 2018 11:43 am

I would encourage you to get professional help with your second application.
All the best

BK14 · Post by **BK14** » Fri Jan 12, 2018 9:16 pm

Marcnath,

Thank you, I have probably the last question:

If a venture capital firm dissolves without investing and the applicant is left with no choice other than to either find another venture capital to fund or eventually invest his/her own funds how does the policy evolve around this?

I would really appreciate if you or any other senior experienced member can shed some light on this, also if all fails can someone switch to any other category for i.e. on a sponsored license will the 3C clause still continues?

Post by **marcnath** » Fri Jan 12, 2018 9:54 pm

BK14 wrote: ↑
Fri Jan 12, 2018 9:16 pm
Marcnath,

Thank you, I have probably the last question:

If a venture capital firm dissolves without investing and the applicant is left with no choice other than to either find another venture capital to fund or eventually invest his/her own funds how does the policy evolve around this?

I would really appreciate if you or any other senior experienced member can shed some light on this, also if all fails can someone switch to any other category for i.e. on a sponsored license will the 3C clause still continues?

Yes, that situation is not covered in the immigration rules. So, it is difficult to say how HO will handle it. Also, there seems to be no clear requirement that the VC who showed funds is the one invested or that it should even be a VC that invests.

As I said in my earlier reply:

marcnath wrote: ↑
Wed Jan 10, 2018 6:51 am
What might work in your favour is that this seems to refers to initial application only, not to extension.

I rank the chances of the investment being accepted as quite high if you do the documentation correctly and not give reason for the CW to look in great detail.

Your Section 3C protection ends the minute your fresh application is submitted. So, no, you will not be able to switch category later as you will be applying as an overstayer. You will have to leave and apply from outside.

BK14 · Post by **BK14** » Fri Jan 12, 2018 10:08 pm

Hi Marcnath,

Thank you, here is the situation.

I am currently drafting the accounts as share capital taking the share value to over £50k with my Business accounts to support the ground since that is where they can see the funds came in and invested accordingly.

Now, if I do the above what additional paperwork do I require because in my case that venture capital funds never came through and when I looked at the details of that Venture Capital Fund company it is showing as dissolved so technically I can not provide paperwork apart from the paperwork that VC supplied in my initial application.

With regards to 3C, so if I a apply with a fresh application within 14 days period and if this will be granted I will still be an overstayer and 10-year mark will become pointless unless 5 years with TIER 1 category is not completed?

Post by **marcnath** » Fri Jan 12, 2018 10:54 pm

From my reading of the immigration rules, you don't need to provide any other evidence. There does not seem to be any requirement to provide any VC documentation for your extension.

In your original post, you mentioned the refusal was due to lack of VC documentation - you did not post the exact text, so I am not sure why you referred to VC documentation there.

In the AR rejection that you posted, the refusal was based on investment evidence and not on VC documentation evidence.

Once your fresh application is approved, the overstay period will be ignored for our 10 year LR or 5 year ILR

BK14 · Post by **BK14** » Fri Jan 12, 2018 10:59 pm

Marcnath,

Thank you as always for your valued feedback, since I switched from STUDENT to TIER 1 rather from PSW. Anyone at that time who was on PSW who switched to TIER 1 can invest their own funds or from 3rd party source where is if a student is switching to TIER 1 they would have to go through venture capital funding and probably with extension you would need to show a confirmation/letter confirming that they gave the funds.

So, I am actually stuck there because if that is the case I have an issue and if that is 100% not an issue with HO then I am fine and I will easily cross the line since I have corrected the accounts, investment, Business, job creation etc all good just this VC paperwork (LETTER) is an issue now.

Post by **marcnath** » Fri Jan 12, 2018 11:12 pm

BK14 wrote: ↑
Fri Jan 12, 2018 10:59 pm
Marcnath,

Thank you as always for your valued feedback, since I switched from STUDENT to TIER 1 rather from PSW. Anyone at that time who was on PSW who switched to TIER 1 can invest their own funds or from 3rd party source where is if a student is switching to TIER 1 they would have to go through venture capital funding and probably with extension you would need to show a confirmation/letter confirming that they gave the funds.

So, I am actually stuck there because if that is the case I have an issue and if that is 100% not an issue with HO then I am fine and I will easily cross the line since I have corrected the accounts, investment, Business, job creation etc all good just this VC paperwork (LETTER) is an issue now.

Yes, I appreciate you have a problem. But there is no point worrying about that because there are no easy solutions.

The only option you have is to hope that, since the rules are unclear for your specific situation, you will get the benefit of the uncertainty.

Can you post the actual words from the first rejection where it referred to VC documentation ?

BK14 · Post by **BK14** » Fri Jan 12, 2018 11:18 pm

Marcnath,

I am going to type this here now, and this will be available to read after 10 minutes.

BK14 · Post by **BK14** » Fri Jan 12, 2018 11:23 pm

Marcnath,

When you initially applied for leave as Tier 1 Entrepreneur you applied with funds 50,000 from a Venture Capital Firm.

Paragraph 46-SD(a)iv of Appendix A of the Immigration Rules states that:

(iv) If the applicant is claiming points for investing 50,000 from a Venture Capital Firm, Seed Funding Competition or UK Government Department, and has now been awarded points in a previous application for having those funds available, he must provide a letter as specified in paragraph 41-SD(c)iii (Except that the letter does not need to have been produced within three moths immediately before the date of application) as evidence of source of those funds, and additionally if the source of the funding was a Venture Capital Firm, he must also provide the evidence as specified in 41-SD(d)iii.

You did not supply evidence from the Venture Capital firm with your application for extension of leave as TIER 1 Entrepreneur.

Post by **marcnath** » Sat Jan 13, 2018 8:24 am

BK14 wrote: ↑
Fri Jan 12, 2018 11:23 pm
Marcnath,

When you initially applied for leave as Tier 1 Entrepreneur you applied with funds 50,000 from a Venture Capital Firm.

Paragraph 46-SD(a)iv of Appendix A of the Immigration Rules states that:

(iv) If the applicant is claiming points for investing 50,000 from a Venture Capital Firm, Seed Funding Competition or UK Government Department, and has now been awarded points in a previous application for having those funds available, he must provide a letter as specified in paragraph 41-SD(c)iii (Except that the letter does not need to have been produced within three moths immediately before the date of application) as evidence of source of those funds, and additionally if the source of the funding was a Venture Capital Firm, he must also provide the evidence as specified in 41-SD(d)iii.

You did not supply evidence from the Venture Capital firm with your application for extension of leave as TIER 1 Entrepreneur.

Can you confirm the highlighted word ? It was "not" in the immigration rules and that makes a big difference.

BK14 · Post by **BK14** » Sat Jan 13, 2018 10:07 am

Typing error it is NOT.

Post by **marcnath** » Sat Jan 13, 2018 10:16 am

BK14 wrote: ↑
Sat Jan 13, 2018 10:07 am
Typing error it is NOT.

OK. So, my interpretation of this is that you don't need to provide the documentation.

Unfortunately, you did not argue it correctly in the AR so it was not tested properly. But the response to your AR did not raise this issue again, so hopefully my interpretation is correct.

Go ahead and submit the application without any VC documents and if it is rejected with the same reason as the original, then do a proper AR to show why there was no need to submit the VC documents.

This really becomes quite detailed legal interpretation, so at some point in time you will have to conduct a professional lawyer.

BK14 · Post by **BK14** » Sat Jan 13, 2018 10:26 am

Marcnath,

I have hired a solicitor now, though his views were slightly different with regards to VC. He states that you should provide the old paperwork but we'll mention that the funding never came through therefore the applicant was left with no option other than to source his own funds.

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