Entrepreneur visa refused (contract via recruitment agency)

[p2s7721]

Dear Members

My visa was refused recently.

Time line
applied 5 August 2014
bio 19 August 2014
decision 30 September 2014

I am a Financial Services Contractor and provided service to a bank at the time of the application and submitted contract via my agency. The contract clearly states that I was providing services to a bank (direct client).

HO satisfied with 50k and awarded points for maintenance and English language.


the letter states


iii
since before 11 July 2014 and up to date of your application you have been continuously engaged in business activity which was not, or did not amount to, activity pursuant to a contract of service with a business other than your own and, during such period has been continuously
(1) registered with HM Revenue and Customs (HMRC) as self-employed,
or
(2) registered with Companies House as the director of a new or an
existing business.

'however the contract you have provided is not acceptable as agencyxxxxx is a recruitment agency, where you are placed by them to provide service for their clients, in this case bankxxxx, therefore it does not meet the criteria in iii. Your actual 'activity' is to be employed by a recruitment agency and your contract of service is with them and therefore your contract of service to bankxxxx is pursuant or consequential to a business other than your own, being agencyxxxxx. Your company is on evidence, sub contracted to bankxxxx by agencyxxxx, and it therefore a contract for your company or yourself to do work for another company as part of a larger project, via a third party.'


Ho contacted my agency before making the decision and they asked

The gentleman of concern, who has made an application for leave to remain in the United Kingdom as a Tier 1 Entrepreneur is as follows;

xxxx

He has provided a contract of employment with yourselves, whilst being deployed at bankxxxx. We would very much like you to send us further information regarding applicants actual duties at bankxxxx.

the agency replied the following on 30 September (same day decision was issued)

Applicant was a contractor providing our client bankxxxx with a service through his own PSC company. He was not an employee of agencyxxxx, but an employee of his own PSC Company..

I am so confused here as my agency clearly stated that i was not an employee and I provided direct services through my limited company.

HO also refused the NQF4 criteria as my agency was not aware and did not confirm with the other services I provided (also claimed on my CV) at bank as they were not on sight. I have contacted my bankxxxx and asked to create a letter for the services I provided.

I am going to appeal and simultaneously ask HO to reconsider the case.

I want to know if any other member in the same situation?

expert's option is also much needed.

thanks

[Olasunkanmi]

@ p2s7721, your case is one of the first I have come across after the changes of July 11, 2014. I think that HO does not want contractors going through third party (recruitment agency) rather they want contractors/applicants to have a contract directly with the client (in your case, the bank). I will advice that you submit an appeal and also consult a professional lawyer who will be able to analyse the changes thoroughly. Meanwhile, better to be preparing for alternative should in case HO end up being correct.

[naveencandy8]

Dear Members

My visa was refused recently.

Time line
applied 5 August 2014
bio 19 August 2014
decision 30 September 2014

I am a Financial Services Contractor and provided service to a bank at the time of the application and submitted contract via my agency. The contract clearly states that I was providing services to a bank (direct client).

HO satisfied with 50k and awarded points for maintenance and English language.


the letter states


iii
since before 11 July 2014 and up to date of your application you have been continuously engaged in business activity which was not, or did not amount to, activity pursuant to a contract of service with a business other than your own and, during such period has been continuously
(1) registered with HM Revenue and Customs (HMRC) as self-employed,
or
(2) registered with Companies House as the director of a new or an
existing business.

'however the contract you have provided is not acceptable as agencyxxxxx is a recruitment agency, where you are placed by them to provide service for their clients, in this case bankxxxx, therefore it does not meet the criteria in iii. Your actual 'activity' is to be employed by a recruitment agency and your contract of service is with them and therefore your contract of service to bankxxxx is pursuant or consequential to a business other than your own, being agencyxxxxx. Your company is on evidence, sub contracted to bankxxxx by agencyxxxx, and it therefore a contract for your company or yourself to do work for another company as part of a larger project, via a third party.'


Ho contacted my agency before making the decision and they asked

The gentleman of concern, who has made an application for leave to remain in the United Kingdom as a Tier 1 Entrepreneur is as follows;

xxxx

He has provided a contract of employment with yourselves, whilst being deployed at bankxxxx. We would very much like you to send us further information regarding applicants actual duties at bankxxxx.

the agency replied the following on 30 September (same day decision was issued)

Applicant was a contractor providing our client bankxxxx with a service through his own PSC company. He was not an employee of agencyxxxx, but an employee of his own PSC Company..

I am so confused here as my agency clearly stated that i was not an employee and I provided direct services through my limited company.

HO also refused the NQF4 criteria as my agency was not aware and did not confirm with the other services I provided (also claimed on my CV) at bank as they were not on sight. I have contacted my bankxxxx and asked to create a letter for the services I provided.

I am going to appeal and simultaneously ask HO to reconsider the case.

I want to know if any other member in the same situation?

expert's option is also much needed.

thanks

Hi member

sorry to hear this, can u share your mode of getting paid . R u raising your invoice to bank or to agency , if you are raising your invoice to agency then their should be no issue but if you are rasing your invoice to bank then their should be an issue because u have signed a contract with an agency and u are getting paid from bank.

From my point of view u need to reapply ur application with ur valid contracts rather then wasting money and time in appeals. thanks

[ishfaqsangra]

@Olasunkami
I am providing GP Practice Management Services to GPs via Contract with my company 3 Practices at the moment.

Now situation is There are 108 Practice in Birmingham who are under Birmingham Cross City Clinical Commissioning group and they are not clients but part of CCG as in UK every GP practice is a part of one or the other Clinical commissioning group
Now Birmingham Cross CITYCCG has taken initiative to support Practices (those which are not well performing) by Managment Tutor/advisors/consultants
I have been interviewed by them and explained about my Consultancy company and experiences and they might agree to contract with my company on as and when required basis and they have cleared that irrespective of the time I would have to complete different projects.CCG is not a recruitment agency they are paying GPs and Commissioning them.as CCG has taken initiative Practices has to pay nothing to them .Practices are part of CCG.

Will I be OK or not

[legalkhan]

The decision looks rediculas, where in the rules it says u cant do subcontracting? Why is subcontracting not a business. If you were not on their payroll then how come its called employment. Do we need to learn business from Ho or it looks like they are redefining the business rules. They should understand that in start every business look for easy and safe way to get clients and sub contracting is the best way to do it. How come the agency would know what financial services u r providing until u have invoiced the agency and they dictate whatever ever services were in the invoice that u have raised to the agency so that they can communicate it to the bank to get u paid for your services. In your post the case worker says that your company cannot be part of the big project that is actually taken by a third party ( agency in your case). Does it sound logical what if the agency runs out of the money , can't they involve another company operating in the same capacity to support them financially or with service outsourcing. By the way have you invested any money so far?

[p2s7721]

thanks
Olasunkanmi , naveencandy8 , legalkhan

@Olasunkanmi

I know this is very unusual specially after my agency clarified my position. How can apply for a fresh application as soon as possible.
I will lodge an appeal by Monday. I am looking to apply for a depended visa (spouse on tier 2 sponsor). the guidance states if you withdraw the appeal and make a fresh application then the application will be considered as OUT OF TIME. what does it mean?
I have completed 8 years in the UK.

@naveencandy8

yeah I was submitting invoice to my agency and was getting paid from them. Agency was then invoicing to the bank.

@legalkhan

HO indeed made a mistake here as they have clearly not checked my other documents and just relied on the contract. why have I pay so much for this application when they want to carry out a partial investigation?

HO apparently consider HMRC regulations for employed and self employed candidates and the guidance states

If you are granted leave to enter or remain as Tier 1 (Entrepreneur) migrant, your leave will
prohibit you from engaging in employment except where you are working for the business which
you have established, joined or taken over. You will comply with this restriction if, for example, you
are employed as the director of the business in which you have invested, or if you are working in a
genuinely self-employed capacity. In this capacity you will have a contact for service.
You may not, however, be considered to be working for your own business if the work you
undertake amounts to no more than employment by another business (for example, where
your work amounts to no more than the filling of a position or vacancy with, or the hire of your
labour to, that business, including where it is undertaken through engagement with a recruitment
or employment agency). In this capacity you would have a contact of service. This applies even if
it is claimed that such work is undertaken on a self-employed basis.
In considering whether your work amounts to genuine self-employment (and is therefore work for
the business which you have established, joined or taken over) or is in fact employment
by another business, we will take into consideration the factors set out at: www.hmrc.gov.uk/
employment-status/index.htm#1.
If your work amounts to no more than employment by another business, we may consider you to
be working in breach of your conditions of stay, and that you are therefore liable to curtailment of
your stay and/or removal from the United Kingdom.

I had half funds in my business account and transferred to personal account and half as gift from relatives. HO satisfied with the 50k.

[S.Danik]

The work you are doing through agency....you can do without establish ur business...so point UKBA is that why you then have established the business.. I am.afraid you contract with agency will not be valid.

[p2s7721]

thanks

s danik

The decision has been made on assumptions. I have provided various services and was not limited to provide a particular service. My work was not supervised and I was responsible to complete the unsatisfactory work (in my own time) unlike an employee. I submitted all the invoices and bank account statements confirming that my pay monthly was not fixed and contract clearly states pay per professional day. Moreover, in my contract both parties (client bank and agency) agreed that neither supplier nor consultant is employee, worker or agency worker.

so the services I provided was different from time to time and I believe an employee is recruited for a specific job role to deliver specific responsibilities and usually do not have the above mentioned flexibilities.

[legalkhan]

@p2s7721

I don't understand what HO is objecting on? Is it because your company is involved in subcontracting? Or is it because the third company is the recruitment agency? What if the third company was itself a consultancy company rather than a recruitment agency? Ok let say I m a company providing logistic services and hr consultancy to a company A, Now getting into the contract with company A also demands to havto have covered the financial aspect of company A. Now here you come into the picture. You go through my company to get your part done in that project. I might have more clients and your company could serve them for my company's behalf cos my company doesn't have financial expertise. In other words I have outsourced your services aa well for providing my clients with one stop solutions. You invoice me for the services u have provided to them on the basis of the contract between u and my company. I invoice company A in return and I give u ur share of the profit/ fees/ earning out of what they have paid my company. Remember u are not on their payroll so its not fixed wages. It is more like a partnership on the same project. The project can comprised of more than one client. So where is the issue here. One last question? Has ur company has shown in investment in this project/contract etc?

[p2s7721]

HO probably thinks I am providing services via my agency and not directly to the client and therefore referred the contract as sub contract. they have completely missed the point you explained in the last post.

I have not invested any funds for project other then business expenses, insurance and legal fees as i was getting paid from the first day of the project.

[hham1224]

Normally, HMRC is after the umbrella companies and try to punish them under IR35 that is why in budget 2014 HMRC were given more powers to tackle the abuse. Most of the times HMRC fails to prove the grounds due the proper contract in place which avoids the application of IR35. Umbrella companies every time find loop holes in the law and that is why HMRC do not like them. Same applies with the HO.

In your situation a good contract is your starting point. Most of people are doing these kind of work not just the visa applicant but also British citizen to avoid the extra tax.

[Lola22]

p2s7721,

It is unfortunate that your application was refused based on the reasons you stated. Some applicant applied with the same contract last year and got their visa.

For appeal, your case is not an 100% win-win case for now but there is a possibility that you can win so it's 50/50. The hands of the judges is slightly tight now. You have to weigh the options and decide putting your present circumstances into consideration.

For appeal, you will spend more time and money while for reapplication, you will spend money for application and less time. For reapplication, you have to make sure that there is no mistake.

However, when you decide to reapply, I will advice you to get another contract that meets the requirement as stated by the decision maker and add your old contract including all the supporting document from bank and agency mentioned above if you still want to use the old contract too.


Good luck.

[Bright_Thought]

Hello, My Visa application was rejected due to having a contract with a recruitment agency? I had registered my limited company 6 month before the new rules came into effect, and running on the same contract with agency, but applied after 11 July 2014. Do you think whether there would a good chance for changing the decision if I appeal?

Thanks

[Lola22]

Hello,

If you have the money and opportunity to reapply, do so immediately.

Make sure you add the required contract document to your application and correct any further mistake.


Good luck.

[Bright_Thought]

My Contract is with a Recruitmenr Agecny, that is the issue. No other issues mentioned by the Home office. I cannot correct anything unless looking for a different contract. Even I manage to find any new client to make a new contract, it won't satisfy the requirment which is being invloved in a business (based ona new contract) three months before the date of application.
My current PSW visa was expired before recieving the decision from Home office, that is why I have been given a right to appeal.

[Bright_Thought]

p2s7721, what action did you take regarding your visa refusal? Did you appeal?

[p2s7721]

I have lodge and appeal against the decision. According to A41 para in guidance we are not allowed to get involve with a recruitment agency however if we are directly providing services to the client then this should not be an issue but the contract should clarify this ( you are not an employee of an agency or your direct client). It is tricky as I hAve met a solicitor in London and he mentioned that providing services to big companies via recruitment agency is a big risk and both HMRC and home office knows why company wants to hire contractors via recruitment agencies and not permanent employees and after new rule (July 14) they do not consider contracting as genuine business.

I guess we have no other option but to appeal as even HO seems confused. I had everything on point bank account statements, invoices and insurances since aug 13 but I have no clue what occurred to HO that my actual activity was employment.

Appeal takes about 6-7 months and after that you can approach UT if the appeal is not approved. Look out for other options in case this does not workout.

What is you situation ? What is your job title ?

[Bright_Thought]

The contract with the recruitment agency has clearly stated that my limited company is providing contract for service to xxx company via xxx agency. My SOC is Mechanical Engineering. My limited company was set up 6 months before the 11th July 2014, was registered with HMRC, got insurance all at the same time. I got the contract with recruitment agency 2 days after I registered my limited company. My business bank account also demonstrates the payments made into my account by the recruitment agency on different dates, within three months before the date of my application.

[p2s7721]

Legally, on records, HO has no right to refuse our application as we are providing services via our limited company. It is also clear that companies can not directly hire contractors for various reasons such as on boarding duties , firing and other HR issues and therefore experienced recruitment agencies are in place to handle these issues so companies will have peace of mind.

the following link also suggest similar refusal issue.

http://www.immigrationboards.com/uk-tie ... l#p1086138

I have pmed the person and we all need to get in touch and discuss how we can make our case stronger for appeal hearing.

please feel free to get in touch my email id is
p2s7721@live.co.uk

we also need to keep this post active for other applicants who are or can be in the same situation.

[Lola22]

p2s7721,

We are all here to help if we can.

What did your solicitor tell you about your case and the success rate if any?

Expecting to hear from you.

Thank you.

[Bright_Thought]

I have discussed this with a solicitors, and an immigration advisor- the solicitor said that the decision was not right, while the advisor was in agreement with the decision. I am not sure whose words I shall believe the most!

[Bright_Thought]

The reason that the new requirements were added was to avoid people from getting Entrepreneur Tier 1 visa, while working as an employee for another company, i.e being on the employer's payroll system. However, running your own limited company, and supplying contract for service to other company even through recruitment agency, while paying your own company's corporation tax should not then be an issue, causing a visa application to be refused, legally The following states the reason that a new rules has been introduced (http://www.ukimmigration.com/news/2014- ... neur-route):

By examining tax records, the government has uncovered evidence that some foreign nationals in the UK with Tier 4 (Student) visas had transferred to the Tier 1 (Entrepreneur) visa were working for someone else and not in fact running their own businesses.

[Lola22]

I understand your position and thank you for your response.

The advisers should be able to tell you why they agree or not but it is good to know that both of them did not agree to the decision.

The fact is, Home Office no longer accept contract with recruitment agency as a contract for Tier 1 Entrepreneur visa application. Home Office expects that as an Entrepreneur, you have contract and render services to different clients as a contract for service and not just rendering services to one client.

If you appeal, you might be able to help other entrepreneur applicant to challenge the decision and hopefully get a favourable decision.

I will also like use this opportunity to correct my statement in an earlier post. I said it is a 50/50 win case, am afraid it is not. The possibility of winning is very low but with a good barrister and Grace of God, nothing is impossible.

When was the visa decision made?

[Bright_Thought]

15 Oct. I still have sufficient time to lodge an appeal.

[Lola22]

Ok, please send me a detailed information about your company services. You can Pm me the information if you want to.