Tier 1 Extension Visa Approved

[Sarega]

Dear All,

Please help...

I had put application in and found out 2 days ago that I have been refused. The reason HO give me is that £10k went to assets (245D(c)(ii) and to third party but I think this is not correct.

This is why:

I bought business as sole trader £35k in 2013,and £10k part of it was fixture and fitting.

One year later I made a ltd company and Directors Loan, unsecured, third party creditors etc of the £35k. After which I made other DL and my total investment is 54K. All of this in the accounts as DL.

HO is saying that the 10K is assets but my issue is that I had changed legal structure of company and I made DLs. Is this right?

Please help...

Thank you

[Momi]

Have you checked your final accounts?
Have you got any more point of refusal or just 1?

[heyaheya]

Dear All,

Please help...

I had put application in and found out 2 days ago that I have been refused. The reason HO give me is that £10k went to assets (245D(c)(ii) and to third party but I think this is not correct.

This is why:

I bought business as sole trader £35k in 2013,and £10k part of it was fixture and fitting.

One year later I made a ltd company and Directors Loan, unsecured, third party creditors etc of the £35k. After which I made other DL and my total investment is 54K. All of this in the accounts as DL.

HO is saying that the 10K is assets but my issue is that I had changed legal structure of company and I made DLs. Is this right?

Please help...

Thank you

m sorrry for the refusal .. when did u send ur application ., and what is the refusal .. u dint mention clearly .. if you want an advise u need to copy the refusal points here ( taking out ur personal info) so moderators can help .. good luck .. hope evything goes well with u.

[Sarega]

Thank you for your reply.

I have only got one point of refusal and no others.

In my accounts, it is clearly written DL and my name next to it.

I will copy the refusal out later on as I am just panicking write now!

[heyaheya]

Thank you for your reply.

I have only got one point of refusal and no others.

In my accounts, it is clearly written DL and my name next to it.

I will copy the refusal out later on as I am just panicking write now!

sorry i know what ur going through .. but as far as i know purchasing business is not counted as investment. is that where u lost points.

[kaps84]

Kindly post the exact wording (after removing the sensitive information).

[marcnath]

Dear All,

Please help...

I had put application in and found out 2 days ago that I have been refused. The reason HO give me is that £10k went to assets (245D(c)(ii) and to third party but I think this is not correct.

This is why:

I bought business as sole trader £35k in 2013,and £10k part of it was fixture and fitting.

Does this mean you bought it from the previous owner, paying them 35k ?

One year later I made a ltd company and Directors Loan, unsecured, third party creditors etc of the £35k. After which I made other DL and my total investment is 54K. All of this in the accounts as DL.

HO is saying that the 10K is assets but my issue is that I had changed legal structure of company and I made DLs. Is this right?

This is not clear at all.

Can you copy the exact text from the refusal ?

If you made 54K DL to the Ltd company, then what is the relevance of the sole trader transaction ? Why did you even have to make HO aware of he sole trader ?

[ahsanalishah]

sorry to heat that.

if you could send the exact wording on the letter that will help the other members help you. This is your understanding you did this but this could be other way around as you may have missed this in final accounts or you havent mentioned it anywhere.

by looking at the exact wording i would be able to assist you further as i want to know why did home office consider this as an assets.

secondly you should have mentioned this in your cover letter or you accountant should have mentioned this in his letter etc.



Please provide more information exact wording as other member has told you.

[Sarega]

This is the exact wording:


You have stated that you have invested a total sum of £54,000 into a business in the United Kingdom. Paragraph 245D©(ii)(2) of the Immigration Rule state as follows:

(c) Where paragraphs 245D to 245DF and paragraphs 35 to 53 of Appendix A, refer to money remaining available to the applicant until such time as it is spent for the purposes of his business or businesses:
(ii) ‘Invested’ means that the funds have been invested into a business or businesses which the applicant is running as self-employed or as a director or member of a partnership. ‘Invested’ or ‘spent’ excludes spending on:
(2) buying any business from a previous owner, where the money ultimately goes to that previous owner (irrespective of whether it is received or held directly or indirectly by that previous owner) rather than into the business being purchased
(This applies regardless of whether the money is channelled through the business en route to the previous owner, for example by means of the applicant or business purchasing ‘goodwill’ or other assets which were previously part of the business.)

As evidence to demonstrate you have supplied:

Directors Loan
Companies House Current Appointment Report
Companies House Certificate of Incorporation
Barclays Bank Statement ending *******
Unaudited Accounts ending 31 July 2016 and 2015
HMRC CT600 and CT620

You have provided a document from your accountant dated 03 March 2017 providing the breakdown of the £54,000 figures as following:

£35,000 initial investment into the shop as a sole trader
£5,000 additional funds bought in
£3,000 additional funds bought in
£2,000 additional funds bought in
£3,000 additional funds bought in
£2,000 additional funds bought in
£1,000 additional funds bought in
£1,000 additional funds bought in
£1,000 additional funds bought in
£1,000 additional funds bought in

Total funds £54,000

You have provided a business lease dated 16 May 2013 signed by yourself and interested parties in relation to the sale of the business

With reference to your lease the sale price of the lease is £35,000

The purchase price has been apportioned into the following:

£25,000 – Premise sum
£10,000 – trade equipment

From the following evidence we are satisfied that your investment does not meet the requirements of Paragraph 245D©(ii)(2) of the Immigration Rule because that part of the investment amounts to assets that were previously part of the business.

As such £10,000 cannot be considered as part investment of your total investment, therefore we are satisfied your total investment amounts below the £50,000 threshold in order to meet the requirements of the immigration rules.

Therefore we have been unable to award points for attributes.


I would appreciate your advice - Thank you.

[marcnath]

Ok. So, it is not because it is an asset but because the money went to the previous business owner

I had put application in and found out 2 days ago that I have been refused. The reason HO give me is that £10k went to assets (245D(c)(ii) and to third party but I think this is not correct.

This is why:

I bought business as sole trader £35k in 2013,and £10k part of it was fixture and fitting.

I am actually surprised that HO did not discount the entire 35K. Why do you think this was not correct ?

So, your AR argument would depend on who exactly you paid the money to.

Any money paid to the previous business owner cannot be counted towards the investment.

If you have proof that it was not paid to the previous owner, you can argue that HO should have asked for that. Otherwise, your best bet would be make the additional investment and submit a fresh application. (still do AR to get some time to prepare your application)

[Sarega]

The £25,000 went to the landlord and not the previous business owner.

But if you note, I have a Directors Loan. I was a sole trader and changed the business of the structure to Ltd Company 1 year later and the amount of £35,000 I than made a DL for and the money is owed to me as well the rest of the amounts.

I have invested via DL into my company and hence not paid the previous owner as when I made my application it was on the basis of the DL and not direct investment.

[CR001]

So where or to who did the £10,000 go then??

[marcnath]

The £25,000 went to the landlord and not the previous business owner.

But if you note, I have a Directors Loan. I was a sole trader and changed the business of the structure to Ltd Company 1 year later and the amount of £35,000 I than made a DL for and the money is owed to me as well the rest of the amounts.

I have invested via DL into my company and hence not paid the previous owner as when I made my application it was on the basis of the DL and not direct investment.

ok. So are you saying the 35K as DL is in addition to the money you paid for the business as sole trader ? As per the accountant letter HO quoted in the refusal, the 35K is made as a sole trader. Obviously, you can't have a DL into a sole trade business as there are no Directors.

Where is that confusion from ?

[Sarega]

I initially made the investment of £35k as sole trader but than changed the legal structure of the business to a limited company a year later.

I than made a Directors Loan for £35k to the ltd company.

My accountants letter actually states that I have by way of a directors loan made an investment of £54K in total. My application form states that I have made an investment by way of Directors Loan for £54K as well.

Therefore, my explanation is that the investment of £35K should be treated as a DL and not sole trader as it is reflected in my accountants letter, application form, and accounts.

[marcnath]

I initially made the investment of £35k as sole trader but than changed the legal structure of the business to a limited company a year later.

I than made a Directors Loan for £35k to the ltd company.

My accountants letter actually states that I have by way of a directors loan made an investment of £54K in total. My application form states that I have made an investment by way of Directors Loan for £54K as well.

Therefore, my explanation is that the investment of £35K should be treated as a DL and not sole trader as it is reflected in my accountants letter, application form, and accounts.

Ok. You can try arguing that in the AR. Essentially, you submitted a document (accountant letter) that was not necessary and now has contradictions - it talks about investment as a sole trader and also the DL.

But if the rest of the documentation is all correct and you have now made a total investment of 89K (35K to your sole trader and 54K as DL to the limited company), then the CW has clearly made a mistake.

Did you submit bank statements showing the transfer of the 35K DL ?

[Sarega]

Dear Marcnath,

Thank you so much for your reply.

First of all my apologies for confusing the matter.

The 35K is not in addition to the 54K - it is a part of it.

Hopefully, I can be clearer below:

* 35K investment into buying shop - sole trader in 2013
* 1 year later (2014) I change the legal structure of my business to a ltd company. I than take the same £35K of 2013 and make it into a DL to the business (the ltd company).
* Out of this the Home office has told me that 35K of the 10K went to assets as it was as a sole trade

My argument is that is incorrect as this 35k which includes the 10K that the Home office are not giving me points for has been applied in the wrong way as it had become a DL and investment into the ltd company I set up. It is reflected in my accountants letter, and my accounts as well as the application in which I have shown that I have made the investment by DL.

I believe that I do not need to show the investment going into the account as it has been made before November 2015 and it is only after this date you need to show the bank transfers.

What do you think?

[marcnath]

Dear Marcnath,

Thank you so much for your reply.

First of all my apologies for confusing the matter.

The 35K is not in addition to the 54K - it is a part of it.

Hopefully, I can be clearer below:

* 35K investment into buying shop - sole trader in 2013
* 1 year later (2014) I change the legal structure of my business to a ltd company. I than take the same £35K of 2013 and make it into a DL to the business (the ltd company).
* Out of this the Home office has told me that 35K of the 10K went to assets as it was as a sole trade

My argument is that is incorrect as this 35k which includes the 10K that the Home office are not giving me points for has been applied in the wrong way as it had become a DL and investment into the ltd company I set up. It is reflected in my accountants letter, and my accounts as well as the application in which I have shown that I have made the investment by DL.

I believe that I do not need to show the investment going into the account as it has been made before November 2015 and it is only after this date you need to show the bank transfers.

What do you think?

You are right - since the investment was made before Nov 15 you don't need bank statements - I was just wondering if you did submit them.

But, with this explanation, the CW was correct in the decision. You have altogether made an investment of 54K - the condition that money going to previous owner is excluded applies to DL as well. So, you only get credit for 44K.

Also, your 35K DL is effectively just a paper transaction, not an actual cash investment.

Immigration rules require it to be a cash investment as Table 4 of Appendix A sets out:

The applicant has invested or has caused investment to be made by one or more third parties, totalling at least £200,000 (or £50,000 if they were awarded points for £50,000 funding or investment in their last grant of leave) in cash directly into one or more UK businesses.

So, essentially, HO will only consider your 35K as a sole trader and the 19K into the Ltd company.
You can make another 6K investment, prepare new accounts and submit a fresh application.

[Sarega]

Thank you for your reply from what I have read from the forums is not DL a investment into the Ltd company?
As i thought the point of the DL is you are investing the Ltd company that has been set up.
As ltd company is a separate legal entity you have invested into and not to the third party.

What the Ltd company does as a separate entity with the loan is separate as the actual investment is into the ltd company?

[marcnath]

Thank you for your reply from what I have read from the forums is not DL a investment into the Ltd company?
As i thought the point of the DL is you are investing the Ltd company that has been set up.
As ltd company is a separate legal entity you have invested into and not to the third party.

What the Ltd company does as a separate entity with the loan is separate as the actual investment is into the ltd company?

Yes, you are correct about all that.

But you obviously did not read my post.

Immigration rules require that the investment has to be a CASH investment. And obviously, you have only put in 19K of CASH into the Ltd company.

[Sarega]

Thank you for your help.

I see your point so I will now make a fresh application and top up the £10k investment but will do AR to get some time to prepare

[Sarega]

Dear All,

I have had my admin review decision 3 days ago and it states the following:

"You claim that the investment into XX Ltd was by way of Directors Loan and that you did not as the caseworker claims purchase the business, therefore the amount of £10,000 should be counted towards your investment.

You have claimed to invested a total sum of £54,000 by way of an unsecured loan to the company as at 31/08/2017. In support of your claim you made reference to the policy guidance. However, paragraph 245D(C)(ii)(2) clearly specified; any investment will exclude goodwill or other assets which were previously part of the business.

Therefore, from the evidence you have provided (lease and sale of business agreement), you failed to meet the requirements of 245D(C)(ii)(2) of the Immigration rules because part of the investment amounts to purchase of goodwill and or other assets which were previously part of the business as stated in your refusal letter.

Whilst it is acknowledged that you have provided Directors Loans amounting to £54,000, you have also detailed the purpose of this investment.

We are satisfied that your total investment amounts to below the £50,000 threshold and as explained above this amount is discounted, and the previous caseworker assessed your application and supporting documents diligently in accordance with the immigration rules, therefore we have maintained the original decision."


I have some questions concerning this decision as I kind of find it bizarre as they are not arguing that they have agreed that I invested into a Directors Loan but rather the purpose that the company used it for.

(Just to let you know I even had a visit from them in my original application and they did not comment anything on that)

1) I thought the requirements was that I make the investment into a company as DL?

2) The company being a separate entity and can invest as it wished as my investment is into the company (which they acknowledge)?

3) How can purpose of investment be linked to DL?

4) I do not know the relevance of the 31/08/2017 date - this a mystery to me?

5) I have further invested £10,000 as a DL into the business since this matter has been ongoing - shall I just make a new application?

6) I went to a solicitor who said point 1 and 2 could be JR - i am not sure if this is strong enough?

Please advise as I would appreciate at this stage as time is running out?

[marcnath]

Why start a new thread - the readers miss the history.
I'll reply in your original thread.

[marcnath]

Dear All,

I have had my admin review decision 3 days ago and it states the following:

"You claim that the investment into XX Ltd was by way of Directors Loan and that you did not as the caseworker claims purchase the business, therefore the amount of £10,000 should be counted towards your investment.

You have claimed to invested a total sum of £54,000 by way of an unsecured loan to the company as at 31/08/2017. In support of your claim you made reference to the policy guidance. However, paragraph 245D(C)(ii)(2) clearly specified; any investment will exclude goodwill or other assets which were previously part of the business.

Therefore, from the evidence you have provided (lease and sale of business agreement), you failed to meet the requirements of 245D(C)(ii)(2) of the Immigration rules because part of the investment amounts to purchase of goodwill and or other assets which were previously part of the business as stated in your refusal letter.

Whilst it is acknowledged that you have provided Directors Loans amounting to £54,000, you have also detailed the purpose of this investment.

We are satisfied that your total investment amounts to below the £50,000 threshold and as explained above this amount is discounted, and the previous caseworker assessed your application and supporting documents diligently in accordance with the immigration rules, therefore we have maintained the original decision."


I have some questions concerning this decision as I kind of find it bizarre as they are not arguing that they have agreed that I invested into a Directors Loan but rather the purpose that the company used it for.

(Just to let you know I even had a visit from them in my original application and they did not comment anything on that)

1) I thought the requirements was that I make the investment into a company as DL?

2) The company being a separate entity and can invest as it wished as my investment is into the company (which they acknowledge)?

3) How can purpose of investment be linked to DL?

4) I do not know the relevance of the 31/08/2017 date - this a mystery to me?

5) I have further invested £10,000 as a DL into the business since this matter has been ongoing - shall I just make a new application?

6) I went to a solicitor who said point 1 and 2 could be JR - i am not sure if this is strong enough?

Please advise as I would appreciate at this stage as time is running out?

1) to 3) Has been discussed quite extensively in your initial post. Now can be read above this.
4) was 31/8/17 the date of your application ? It just said "as of", so not really significant.
5) Yes, that was the initial conclusion also.
6) Sure, if you want to enrich the solicitor. If the solicitor is so confident, maybe they will do a no win, no fee arrangement. It would definitely be worth it then.

[Sarega]

Hi Marcnath

Thanks for getting back to me.

I am going with option 5! Forget option 6 as I think it is too risky and you right it is enriching the solicitor.

I have a question for the new application. Do I have to provide all over again the employees proof or can I use the old evidence with an updated accountants letter?

Also, my understanding there is a change about about job creation something about hours and minimum wage does that have to be on the accountants letter?

Thanks,

[marcnath]

Hi Marcnath

Thanks for getting back to me.

I am going with option 5! Forget option 6 as I think it is too risky and you right it is enriching the solicitor.

I have a question for the new application. Do I have to provide all over again the employees proof or can I use the old evidence with an updated accountants letter?

Also, my understanding there is a change about about job creation something about hours and minimum wage does that have to be on the accountants letter?

Thanks,

A new application is exactly that - it has to be as complete as the original application was. The only thing you don't submit is passports and any other original documents that are held by HO. You can refer to them.
If you had a new business (i.e. did not join/takeover a business) there is no accountant letter for job creation. So not sure what changes you refer to.