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salaried or contractor?

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susie84
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salaried or contractor?

Post by susie84 » Fri Oct 29, 2010 11:33 pm

Hello,

how do the case workers make the distinction between salaried employment and contractor?

I worked in the United States for an employer who paid me via weekly or monthly checks with different amounts. For those familiar with the US system, I did not get W2, but got 1099. I am not submitting any tax documents so caseworker does not need to know that.

Can I count those earnings as salaried employment? I will submit the bank statements which are showing the check deposits and a letter from the employer showing the various check payments including net/gross amount for each although net and gross are always equal as they did not withhold any tax. Any help?

Thanks.

susie84
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clarification

Post by susie84 » Sat Oct 30, 2010 1:15 pm

Although I am not a tax expert, I think it is legitimate that they did not withhold any taxes (thus gross=net) as I was using my OPT which makes me exempt from FICA and Medicare withholdings.

But, would the caseworker think I am a contractor? I am quite confused with this..

asp
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Post by asp » Sat Oct 30, 2010 2:42 pm

Don't YOU know whether you were a contractor (self employed) or an employee of the company?

In UK employment law the basic distinction is between the type of contract that you have with the company. Employees have a "contract of service" while contractors have "contract for services". If your status is unclear the caseworker may ask to see the contract you had with the company and they will make up their own mind as to whether it is one "of service" or "for services".

A quick Google search tells me that 1099 is a US tax form used for contractors, not employees. If you conceal that from the caseworker then there is a strong chance it will be regarded as an attempt to deceive, which could make you an illegal entrant if you got a visa.

susie84
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Post by susie84 » Sat Oct 30, 2010 2:53 pm

well, I was working like an employee (going to the office everyday) but they did not show me under their payroll to save from taxes and paperwork and paid me via checks. Unfortunately, it is a common practice among small firms in the US. any other ideas?

aruni4470
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Post by aruni4470 » Sat Oct 30, 2010 3:17 pm

susie84 wrote:well, I was working like an employee (going to the office everyday) but they did not show me under their payroll to save from taxes and paperwork and paid me via checks. Unfortunately, it is a common practice among small firms in the US. any other ideas?
If you are not on their payroll, then you cannot be their employee. You are a contractor.

Also, see the website below which says 'Working on a 1099 basis actually means that you are working as a true Independent Contractor under the IRS rules.'

http://www.residual-rewards.com/w2-vs-1099.html

susie84
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Post by susie84 » Sat Oct 30, 2010 3:40 pm

ok, then I better apply as a contractor. In the policy guideline, it says:

"If the applicant is a contractor who does not operate either through his/her own company or as an employee, he/she may provide:
an accountant’s letter confirming a breakdown of his/her gross and net earnings for the period claimed;

and personal bank statements clearly highlighting all credit payments made to his/her account from employment undertaken during the earnings period claimed"

The thing is I left US and came to UK in May and did not get any letter from an accountant (I did not have an accountant) and now it is not easy to get in touch with some accountant in US to get a letter. In the policy guideline it says:

" 146. These examples are not the only combination of documents we will accept for each employment type and an applicant can use other combinations of documents, providing these meet the requirements of the ‘documents required’ section above: "

So, can I submit any other document instead of the accountant letter such as a letter from the company I worked for stating I worked as an independent contractor with them and they paid me these checks, with gross, net amounts..

Thanks.

rizwan567
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Post by rizwan567 » Sun Oct 31, 2010 9:46 pm

In guidance its clearly mentioned that you need to provide evidence out of 10 listed there.

If you provide any evidence which is not listed then its a straight refusal!

It is not UKBA problem that why you are not able to provide accountant reference. You need to get solutions yourself.

And one more thing which you need to be careful about, you should also provide registration of your business/contract work.. which you did not. It is also a possibility that earnings you made in US were not legitimate as you did not have a registered business and you did not pay any taxes on your earnings

If you are on payroll then your employer pays your taxes. If you are self employed or contractor then you are supposed to pay your taxes yourself. Which you didnot and you even did not register. Now check out the possibility of back date registering. And if the tax year is over in US then file you tax return, get acknowledgment from tax authorties and get a letter in support of your earnings.. That will make your case solid and you can qualify.

susie84
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Post by susie84 » Sun Oct 31, 2010 11:54 pm

I was planning to submit one of the 10 which is the letter from the company stating my earnings including net/gross instead of the accountant letter, but I am not sure if that can be submitted for a contract work. I guess my real question is there any other document that can be submitted instead of accountant letter for a contract work?

I don't see anywhere in the policy guide saying that I should provide registration of my contract work, so I didn't get your point. I don't think I needed to register anyways.

I don't see the relevance of tax situation either. I paid part of my taxes for 2010 and can pay the rest before April 2011 maybe with penalty, but since I am not submitting any tax document as evidence, so I don't see the point. You pay your taxes online for this kind of work, so there is no solid document that can back of my case.

I think I should talk to an immigration lawyer, as this doesn't look straightforward.

rizwan567
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Post by rizwan567 » Mon Nov 01, 2010 10:30 am

If you are self employed contractor and paying your taxes yourself then do as I said in the above post. If you worked other way around then your employer should have deducted your taxes.

Only and simple answer to your question is, only taxable earnings are considered. I am not caseworker but your paperwork needs to show that your earnings were ligitimate and taxable.

If we go by as you say then every second self employed person can show himself contractor in order to reduce the paperworkd and get visa without showing any third document.

Rest do your customized calculations yourself according to your case.

susie84
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Post by susie84 » Mon Nov 01, 2010 9:07 pm

Sorry to repeat again, but does anyone know whether there is any other document that can be submitted instead of accountant letter for contract work?

Thanks.

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