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SET(M) and self-employment financial year
Posted: Thu Apr 04, 2019 8:32 pm
by crispy
Hi board,
My Canadian wife and I are allowed to combine our income to meet the financial requirement. The last two times -- FLR(M) and FLR(M) extension -- we have smashed the financial requirement through double full-time salaried employment.
This time, however, we will likely be dependent on combining my self-employment and her salaried employment. Neither on its own would be enough.
Our next premium service centre appointment will be in February 2021.
Just so we're clear, the financial year they would scrutinise with regards to my self-employment would be the April 2019-April 2020 financial year, right? i.e. the most recently completed and taxed financial year?
Or will they be more interested in my six months of (pre-tax) records running up to Feb 2021?
Thanks!
Re: SET(M) and self-employment financial year
Posted: Mon Apr 08, 2019 2:13 pm
by crispy
In case anyone else is interested in this answer, I have now found the relevant paragraphs in the guidance notes:
9.1.1. Where the applicant’s partner (and/or the applicant if they are in the UK with permission to work) is in self-employment, or is either the director or employee (or both) of a specified limited company in the UK, at the date of application, they can use income from the last full financial year to meet the financial requirement.
So in my example it is the current 2019-2020 financial year.
Ta.
Re: SET(M) and self-employment financial year
Posted: Sun Apr 14, 2019 3:55 pm
by shayan123
Hi My situation is the same.
My mrs is applying for ILR after completing 5 year FLRM route in september 2019.
I became self employed in april 2018 and my income for the full tax year (2018-2019) before tax is £8500.
My mrs. Started working in september 2018 and her income for the last 12 months from the date of application ( 13-09-2019) will be around £11500.
So will HO use her last 12 months and my (2018-2019) combined OR will they use my projected income for last 12 months or income for my last financial year?
I am confused, can anyone help.?
Re: SET(M) and self-employment financial year
Posted: Wed Jul 03, 2019 9:23 pm
by crispy
shayan123 wrote: ↑Sun Apr 14, 2019 3:55 pm
So will HO use her last 12 months and my (2018-2019) combined OR will they use my projected income for last 12 months or income for my last financial year?
I am confused, can anyone help.?
Hi Shayan. Our situation is almost identical even in terms of the amount of money.
My understanding is that your wife's income from employment must be FROM THE SAME FINANCIAL YEAR as the one you're using. So if you're depending on income from the 2019-20 tax year for yourself, your wife's money from that very same financial year is what's relevant.
In addition, your wife must still be employed in the same job at the point of application AND you must be engaged in the same self-employed practice. Evidence of this will be required.
Don't take my word on this, my friend. Keep yourself safe and read the guidance.
Re: SET(M) and self-employment financial year
Posted: Wed Jul 03, 2019 9:25 pm
by crispy
Here are the notes I copy-pasted from the guidance concerning our situation. But remember to read the whole thing for yourself to be completely safe.
4.1.1. Income from self-employment, and income as a director or employee of a specified limited company in the UK, of the partner (and/or the applicant if they are in the UK with permission to work). This is referred to as Category F or Category G, depending on which financial year(s) is or are being relied upon. See section 9 of this guide.
4.1.2. these sources can be combined, but only for the period of the relevant financial year(s)
5.5.7. Overtime, payments to cover travel time (e.g. for a care worker travelling between appointments), commission-based pay and bonuses (which can include tips and gratuities paid via a tronc scheme registered with HMRC) will be counted as income from employment where they have been received in the relevant period(s) prior to the date of application. Sometimes the person will receive the same amount of income from overtime each month; sometimes overtime payments will vary, with different amounts (if any) each month. All overtime in salaried employment will be calculated based on the approach to income from non-salaried employment. This will be an annualised 6-month average for the overtime which will be added to the level of the gross annual salary.
9.1.1. Where the applicant’s partner (and/or the applicant if they are in the UK with permissionto work) is in self-employment, or is either the director or employee (or both) of a specified limited company in the UK, at the date of application, they can use income from the last full financial year to meet the financial requirement.
9.3.1. For those self-employed as a sole trader, as a partner or in a franchise, the relevant financial year(s) will be that covered by the self-assessment tax return and in the UK this runs from 6 April to 5 April the following year.
9.3.3. The evidence submitted must cover the relevant financial year(s) most recently ended. A self-assessment tax return may include provisional figures
9.3.4. If a person has different financial years, e.g. because they are both self-employed and a director or other employee (or both) of a specified limited company, their income from the self-assessment tax return and Company Tax Return financial years cannot be combined to meet the financial requirement. Including income from differently based financial years would not be a fair or accurate way of calculating a person’s annual income. This restriction also applies where a person andtheir partner have income based on different financial years: the application must rely on both partners’ eligible income in the same financial year(s).
9.3.7. Where a coupleare using their joint income to meet the financial requirement, all of this income must fall within the financial year(s) being relied on and must still be a source of income at the time of application. For example, if the applicant is in the UK with permission to work, to combine their salaried employment income with their partner’s self-employment income, they must provide evidence of the income received from this salaried employment during their self-employed partner’s relevant financial year(s) and evidence of ongoing employment at the date of application.
Re: SET(M) and self-employment financial year
Posted: Thu Apr 16, 2020 1:29 pm
by crispy
Hi all. It's the request for an "accountant's certificate of confirmation" that's confusing me now. I have no idea what that is. Nor does my accountant. Anyone have any idea? Just a letter to confirm that my accounts are legitimate maybe?
Evidence of self-employed income
Posted: Thu Apr 16, 2020 2:23 pm
by crispy
Hi everyone,
Does anyone have any understanding of the "accountant's certificate of confirmation" required as evidence for self-employed income?
Neither I nor my accountant know what this is. Could it just be a letter from the accountant to say "these accounts are legitimate and we are indeed a member of a UK Recognised Supervisory Body"?
Here's the requirement verbatim from Appendix FM 1.7: Financial Requirement (section 9.6.1):
(bb) If the business is not required to produce annual audited accounts, unaudited accounts for the last full financial year and an accountant’s certificate of confirmation, from an accountant who is a member of a UK Recognised Supervisory Body (as defined in the Companies Act 2006) or who is a member of the Institute of Financial Accountants;
Re: Evidence of self-employed income
Posted: Thu Apr 16, 2020 4:16 pm
by zimba
That is needed in these two cases ONLY where a business entity is involved and there is NO audited account:
In respect of income from employment and/or shares in a limited company based in the UK
OR
In respect of self-employment in the UK as a partner, as a sole trader or in a franchise
https://assets.publishing.service.gov.u ... -ext_1.pdf
Re: Evidence of self-employed income
Posted: Thu Apr 16, 2020 4:45 pm
by crispy
Zimba wrote: ↑Thu Apr 16, 2020 4:16 pm
That is needed in these two cases ONLY where a business entity is involved and there is NO audited account:
In respect of income from employment and/or shares in a limited company based in the UK
OR
In respect of self-employment in the UK as a partner, as a sole trader or in a franchise
https://assets.publishing.service.gov.u ... -ext_1.pdf
Yes. Unless I misunderstand, that applies to us. We are combining my Canadian wife's employed earnings AND my self-employed earnings to meet the financial requirement. As a self-employed person, I do not require audited accounts. So, my read is that I need to provide unaudited accounts (done) and the certificate of confirmation (which is what I'm asking about here). Is that not right?
Re: Evidence of self-employed income
Posted: Thu Apr 16, 2020 6:56 pm
by zimba
Yes.
Re: Evidence of self-employed income
Posted: Thu Apr 16, 2020 8:22 pm
by Fivem
hi,as i did in my two previous FLR(M) ,i submitted unaudited account paper and letter has accountant logo explains the figures in your assessement.
Re: Evidence of self-employed income
Posted: Fri Apr 17, 2020 4:06 pm
by crispy
Fivem wrote: ↑Thu Apr 16, 2020 8:22 pm
hi,as i did in my two previous FLR(M) ,i submitted unaudited account paper and letter has accountant logo explains the figures in your assessement.
Okay. Thanks Fivem.
SET(M) : combining employment and savings (worked example)
Posted: Tue Jul 21, 2020 6:02 pm
by crispy
I'm trying to work out how much my wife would need in cash savings to supplement her employed income of £9,700 to meet the financial requirement. This would be a combination of Categories A and D.
As I understand it, she would need £24,900 ((18,600-9,700)+16,000) in savings to supplement her income. Is that correct?
For that matter, if she had £34,600 in savings (18,600+16,000), would she meet the Financial Requirement with an income of £0?
Just trying to make sure I've understood the guidance correctly.
Re: SET(M) : combining employment and savings (worked example)
Posted: Tue Jul 21, 2020 7:13 pm
by zimba
crispy wrote: ↑Tue Jul 21, 2020 6:02 pm
I'm trying to work out how much my wife would need in cash savings to supplement her employed income of
£9,700 to meet the financial requirement. This would be a combination of Categories A and D.
As I understand it, she would need
£24,900 ((18,600-9,700)+16,000) in savings to supplement her income. Is that correct?
For that matter, if she had
£34,600 in savings (18,600+16,000), would she meet the Financial Requirement with an income of £0?
Just trying to make sure I've understood the guidance correctly.
Correct. If you (or her) have held cash saving of
£34,600 or more for at least 6 months, there is no need to provide other sources of income.
Re: SET(M) : combining employment and savings (worked example)
Posted: Wed Jul 22, 2020 3:28 pm
by crispy
Zimba wrote: ↑Tue Jul 21, 2020 7:13 pm
Correct. If you (or her) have held cash saving of
£34,600 or more for at least 6 months, there is no need to provide other sources of income.
That's very interesting indeed. Thank you.
Sorry for asking so many questions here. It's just very reassuring to check with someone that I've understood the guidance properly. All the best.
Re: SET(M) : combining employment and savings (worked example)
Posted: Wed Jul 22, 2020 6:55 pm
by crispy
Zimba wrote: ↑Tue Jul 21, 2020 7:13 pm
Correct. If you (or her) have held cash saving of
£34,600 or more for at least 6 months, there is no need to provide other sources of income.
Can the money be held in our two separate personal bank accounts? (e.g. half in mine and half in hers?)
The guidance says we need:
personal bank statements showing that at least the level of cash savings relied upon in the application has been held in an account(s)
in the name of the person or of the person and their partner jointly throughout the period of 6 months prior to the date of application.
That doesn't actually say it can be held by "her, me, or both of us." It says "her or both of us". We do not have a joint account, only our own accounts.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 12:33 am
by zimba
The rules are not clear on that. I interpret this as the funds must be in a joint account rather than in separate accounts
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 12:18 pm
by crispy
Zimba wrote: ↑Thu Jul 23, 2020 12:33 am
The rules are not clear on that. I interpret this as the funds must be in a joint account rather than in separate accounts
A bit of a slippery one, isn't it? We've read over the entire Category D guidance and, most of the time, it speaks as if two separate personal accounts is fine. But then there's that (quoted above) phrasing under the evidence section. I suspect it's a mistake/a bit of sloppy writing but I wouldn't want to bet our visa on it.
Thanks for your help Zimba.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 12:32 pm
by CR001
The guidance, Appendix 1.7 is quite clear, it is either of you or jointly, page 43.
https://assets.publishing.service.gov.u ... gov-uk.pdf
7.4. Cash savings – further guidance
7.4.1. Savings must be held in cash in a personal bank/savings account in the name of the
applicant, their partner or the couple jointly.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 2:57 pm
by crispy
CR001 wrote: ↑Thu Jul 23, 2020 12:32 pm
The guidance, Appendix 1.7 is quite clear, it is either of you or jointly, page 43.
Yes, that's what I mean when I say the rest of the guidance reads as if it's okay to be split across different accounts and different partners. But you're right, it is quite clear. It's the contradiction that concerns me.
On closer inspection, the troubling clause says "the person" rather than than "the applicant" or "the partner" so could apply to either of us. Maybe that's intended. If "the person" refers to either of us, the clause makes sense and is consistent with the rest of the document.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 3:04 pm
by AmazonianX
crispy wrote: ↑Wed Jul 22, 2020 6:55 pm
Zimba wrote: ↑Tue Jul 21, 2020 7:13 pm
Correct. If you (or her) have held cash saving of
£34,600 or more for at least 6 months, there is no need to provide other sources of income.
Can the money be held in our two separate personal bank accounts? (e.g. half in mine and half in hers?)
The guidance says we need:
personal bank statements showing that at least the level of cash savings relied upon in the application has been held in an account(s)
in the name of the person or of the person and their partner jointly throughout the period of 6 months prior to the date of application.
That doesn't actually say it can be held by "her, me, or both of us." It says "her or both of us". We do not have a joint account, only our own accounts.
Using personal example, used sponsor and applicant's savings in the past and got successful outcome. Ensure the money did not drop below the requirement at any time in last 6months. Write a declaration of source of funds that are in both accounts.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 3:16 pm
by crispy
AmazonianX wrote: ↑Thu Jul 23, 2020 3:04 pm
Using personal example, used sponsor and applicant's savings in the past and got successful outcome. Ensure the money did not drop below the requirement at any time in last 6months. Write a declaration of source of funds that are in both accounts.
Thank you very, very much. That is good to know.
On the subject of the declaration, how deep do the sources have to go? For example, if 10k came from liquidised investments, is that enough or do I have to explain where the money came from
before it was invested? Or is that ancient history? Are they only interested in the sources from the past 6 or 12 months or do I have to delve into my childhood, given that we're talking about life savings here?
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 4:14 pm
by seagul
crispy wrote: ↑Thu Jul 23, 2020 3:16 pm
Are they only interested in the sources from the past 6 or 12 months or do I have to delve into my childhood, given that we're talking about life savings here?
By surmising since the cash savings should have been held from the last 6 months so only 6 months will be mattered. Furthermore, you aren't required to supply the evidences of their provenance (unless gets asked at later) rather the 6 months of bank statements and a declaration which ideally be written without any verbosity but appurtenantly.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 4:41 pm
by AmazonianX
AmazonianX wrote: ↑Thu Jul 23, 2020 3:04 pm
crispy wrote: ↑Wed Jul 22, 2020 6:55 pm
Zimba wrote: ↑Tue Jul 21, 2020 7:13 pm
Correct. If you (or her) have held cash saving of
£34,600 or more for at least 6 months, there is no need to provide other sources of income.
Can the money be held in our two separate personal bank accounts? (e.g. half in mine and half in hers?)
The guidance says we need:
personal bank statements showing that at least the level of cash savings relied upon in the application has been held in an account(s)
in the name of the person or of the person and their partner jointly throughout the period of 6 months prior to the date of application.
That doesn't actually say it can be held by "her, me, or both of us." It says "her or both of us". We do not have a joint account, only our own accounts.
Using personal example, used sponsor and applicant's savings in the past and got successful outcome. Ensure the money did not drop below the requirement at any time in last 6months. Write a declaration of source of funds that are in both accounts.
You are welcome.
In our own case, it was a few lines....
I write to declare the source of funds in account ***** being used for this application. This accrued over the years as savings from my income.
Thanks.
same from spouse and signed. And that was it. We were prepared that should they request for more details to print the account statements going back years, to supply invoices, copies of receipts and delivery notes from business going back to about 4 years.
Keep it simple in the application. However, be prepared to present more details with evidence should HO request such down the line.
Re: SET(M) : combining employment and savings (worked example)
Posted: Thu Jul 23, 2020 5:15 pm
by crispy
AmazonianX wrote: ↑Thu Jul 23, 2020 4:41 pm
You are welcome.
In our own case, it was a few lines....
I write to declare the source of funds in account ***** being used for this application. This accrued over the years as savings from my income.
Thanks.
same from spouse and signed. And that was it. We were prepared that should they request for more details to print the account statements going back years, to supply invoices, copies of receipts and delivery notes from business going back to about 4 years.
Keep it simple in the application. However, be prepared to present more details with evidence should HO request such down the line.
Fabulous. Thank you. I almost feel a pie chart coming on... but I will keep it simple, I think!