Self Employed - how do new HSMP rules effect?

[artfreak9]

Hi,
I got my HSMP initial 2 years stamp in october and am in london contracting as a QA analyst. My company is pushing for me to go permanent. I would like to stay contractor...i am currently on 200£ a day which is near about £50,000 per annum.

I was wondering if apply for self employed, how would the new HSMP rules affect me..is there specific requirements for Self employed people when they go for an extension?
Is taking the permanent role (which is big drop in pay) a good idea (i thought it would help me show regular income when i go for extension in two years time Oct. 2008).
I am not sure if i should go for permanent or apply for self emplyed and keep contracting as that will keep my income band higher and i can gain higher points...
Besides that i have a masters in the UK, previous work experience in UK(1 year as a student placement at £24,000 p.a)
Please advice....

[webhunter]

I think you will still be eligible (based on current rules and your salary), whether you are self-employed, contracting or holding a permanent job.

My advice would be not to change your career plans if you are already happy , because of your plass for hsmp application which is due in 2 years ( a long wait ).

If you have followed what happened in the last 1 year, you would have 0% belief that the existing rules will be in tact at the end of 2 years with out any changes.

Hope that helps.

[LondonBlonde]

artfreak9 - the new rules favour contracting in my opinion. If you become permenant and lose your job several months before applying for FLR, HO will not care if you were steadily employed years before this happened. They will simply add up what you have made over the last 12 months with no preference given to permanant or contract earnings.

If it were me, I would take the independant contract route and pile up as many alternative contract jobs as possible - preferably, working more than one week to week if you can.

Obviously, this is not what your employer would prefer, however this is where the home office is pushing all of us.

If you fail to meet the 75 points, you can apply for provisional arrangements as self employed. However, as a faithfull employee, you have no recourse whatsoever if you become redundant and fail to meet your extension requirements. You will be forced to scramble for a work permit under threat of deportation, and you will lose your time spent here as a skilled migrant for ILR consideration.

Good luck to you - well done on the earnings.

[Jk2007]

The main adavantage with the "Self Employment" route is that if you fail to get 75 points, the transitional arrangement in this case is easier than the "Salaried Employee" applicants.

For transitional arrangement, the Salaried Employee has to transfer to Work Permit scheme. This is easier said than done since this depends on your employer's willingness to sponsor you for the work permit.

Whereas, for Self Employed applicants, for transitional arrangements you do not depend on your employer. In this case, you depend on your ability to secure soild contracts (self employment) atleast for the next few months.

[artfreak9]

Cheers Guys,
Thanks for all the replies..very helpful...i will keep you posted on my situation...


Many thanks!
Rohan...

[artfreak9]

Also guys,
LondonBlonde, you mentioned that i shud go for contracts one week to week basis (which i wud assume are short term ones). what if i get a long term contract with a firm... what happens then..is this going to affect me when i go for extension? the fact that i have been contracting with one firm rather than many....

Rohan...

[LondonBlonde]

Also guys,
LondonBlonde, you mentioned that i shud go for contracts one week to week basis (which i wud assume are short term ones). what if i get a long term contract with a firm... what happens then..is this going to affect me when i go for extension? the fact that i have been contracting with one firm rather than many....

Rohan...

Hey artfreak,

Yes, long term is better. I only meant that you should consider working for more than one contract at a time. This might help you bring in more money, and will keep you employed if one of your contracts dries up.

I know that brit companies are skint, and will find someone to work full time for half the price if you don't don't eventually accept a permenant position. However, HO could send you packing if you do this and become redundant. Working more than one contract will prevent you from scrambling to meet FLR requirements when you lose a contract, and self employment status will keep you from having to meet the 75 points when applying for FLR.

Hope this helps - good luck to you

[John]

It might be helpful if those reading this topic also have a read of this topic as well, if only because of the links I have provided today as regards the guidance about the self-employed and the new HSMP Extension application form.

[artfreak9]

Does any one know under HSMP visa if say one is contracting, does he have to use an umbrella company to handle taxes?
Or can this be done by himself by registering as self employed?

Can a holder of HSMP visa take up contract work directly with a company? or is it necassary to either be self employed or use an umbrella company?

Artfreak9...

[John]

Either, but you might find that those you are working for insist that you work through a Limited Company, in order to make sure that they are not liable for PAYE and National Insurance on the payments made to you.

In order words the primary concern here is tax, rather than any immigration law.

[artfreak9]

Hi thanks for the reply.
So just to make sure again..i can register myself as self employed and set up my own company and offer my services directly and pay my taxes myself?

is that right?

regards,
rohan...

[John]

Rohan, indeed you can ... you could be the sole Director and sole Shareholder of your company.

But do appreciate that there are lots of technicalities to take into account. For example a company is required to have a Company Secretary, and the sole director of the company is not allowed to be that Company Secretary.

And admin to deal with, including but not limited to ... VAT, Corporation Tax, PAYE, filing of accounts (in specific format acceptable to them) with Companies House.

In other words unless you have the required background don't even think about starting your own Limited Company unless you appreciate the need to buy in the professional help you need.