Tier 1 entrepreneur extension - investment demonstration

[adeypeter]

Hi Everyone

I was granted initial Tier 1 entrepreneur leave as self employed in 2013 through the Post Study route. I already owned a commercial property for running my business before the initial application. The commercial property was accepted as an investment already made and that was why I was given the visa.

Now, I switched to being a director of my company from self employed after I was given the visa. I have since transferred the same commercial property accepted by HO into the name of the business. If HO already accepted that I have invested in my initial leave that was granted, do I need to demonstrate this again?.
How do I demonstrate the continued investment of this property to HO to be on the safe side. I have seen someone on this forum whose application was rejected because he wrote the letter that he transferred a commercial property to his business. He said HO rejected because they said you cannot loan your property except money. So, what do I do as my extension application is just in 1 day.


Thanks

[adeypeter]

Is there any minimum period of bank statement that needs to be sent to HO to demonstrate that a business is a UK business. Does the bank statement need to cover the period of business operation for the 3- years for which the initial grant was given.

Also, some of my employees have been paid by cash-in-hand in some cases even though this was reported by RTI filling with FPS records. Would this be a problem if HO cannot find the record of some of the salary/wage payment on the business bank statement even though there are only few cases that happened this way.



Thanks

[Dangerous Dragon]

adeypeter,

Nothing was mentioned in guidance regarding length of business bank statements required, its safe to send last one to 1.5 yr statements.

[adeypeter]

Thanks Dangerous Dragon for your response. Can someone please answer whether is compulsory to demonstrate from bank statement employee's payment?

[zimba]

Now, I switched to being a director of my company from self employed after I was given the visa. I have since transferred the same commercial property accepted by HO into the name of the business. If HO already accepted that I have invested in my initial leave that was granted, do I need to demonstrate this again?.

If you got your investment points during initial, no need to demonstrate it during extension

How do I demonstrate the continued investment of this property to HO to be on the safe side. I have seen someone on this forum whose application was rejected because he wrote the letter that he transferred a commercial property to his business. He said HO rejected because they said you cannot loan your property except money. So, what do I do as my extension application is just in 1 day.

Rules cleared up in 2014 to prevent investment in property.

Is there any minimum period of bank statement that needs to be sent to HO to demonstrate that a business is a UK business. Does the bank statement need to cover the period of business operation for the 3- years for which the initial grant was given.

I sent one statement only

Also, some of my employees have been paid by cash-in-hand in some cases even though this was reported by RTI filling with FPS records. Would this be a problem if HO cannot find the record of some of the salary/wage payment on the business bank statement even though there are only few cases that happened this way.

No requirement for this. You need to just send the payslips showing you paid the salaries as you claimed. Then can probably see your filings via PAYE.

[adeypeter]

Hi Zimba

Thanks for the response. Just one quick question. I have already sorted out the P45 of employees who have left but the issue is that the P45 does not show the start date. Due to the fact that I file weekly for the employees, there are loads of FPS that show the start date. Is it ok if I just send the first FPS only along with the P45 since that FPS shows the start date?, or do I need to send all 52 FPS covering about 52 weeks for just one employee?. HO asked for FPS or P45 ( if employee left) but they are also asking to see the start date which is not on P45?

[zimba]

Hi Zimba

Thanks for the response. Just one quick question. I have already sorted out the P45 of employees who have left but the issue is that the P45 does not show the start date. Due to the fact that I file weekly for the employees, there are loads of FPS that show the start date. Is it ok if I just send the first FPS only along with the P45 since that FPS shows the start date?, or do I need to send all 52 FPS covering about 52 weeks for just one employee?. HO asked for FPS or P45 ( if employee left) but they are also asking to see the start date which is not on P45?

P45 only shows the day someone left, send that if your employee left the company.
I suggest you send all the FPS reports including the one that shows the start dates for the period you are claiming points for

[AXL123]

Rules cleared up in 2014 to prevent investment in property.

Hi Zimba88, I am in process of buying a property for office. Can I not buy? Could you please explain what it do you mean by prevent investment in property?

Thanks,

[zimba]

Hi Zimba88, I am in process of buying a property for office. Can I not buy? Could you please explain what it do you mean by prevent investment in property?

Buying a property is not an acceptable form of investment for extension.

Extension refused for investment in property: http://www.immigrationboards.com/uk-tie ... 10127.html

[AXL123]

Hi Zimba88, I am in process of buying a property for office. Can I not buy? Could you please explain what it do you mean by prevent investment in property?

Buying a property is not an acceptable form of investment for extension.

Extension refused for investment in property: http://www.immigrationboards.com/uk-tie ... 10127.html

Hi Zimba88, Thank you for your prompt response.

Reading Section 98, 136, 140 and on page number 72 of guidance “Types of investment excluded from the award of points (A21)”, gives clear indication that one can investment in commercial property, it is allowed.

Being an accountant I have best option is to buy Clients’ Fee (Goodwill) that is not allowed or buying an office(commercial property). I need a permanent address with ample parking for generating new business and retain my clients. However, it seems investing in office might cause problems for me.

Can I take an office on long lease? OR it might be treated as property? Usually it is shown on account as leased property!

Thanks

[zimba]

Investing in property is not acceptable by Ho given that Tier 1E was set up for individuals to invest their cash to run and grow a business not to purchase an asset under their company name and sell it off after they got their extensions with a profit. This is seen basically as the abuse of the route and HO is rejecting individuals who claimed to have invested in assets.
There is no justification for you to spend your entire capital in a commercial property or a get an expensive lease to set up an accounting business, it practically makes no sense and HO views this as an attempt to game the system to just stay here in the UK. You better sign a long term rental agreement to start with and get a lease or purchase an office if they business takes off later from your profits.

[AXL123]

Investing in property is not acceptable by Ho given that Tier 1E was set up for individuals to invest their cash to run and grow a business not to purchase an asset under their company name and sell it off after they got their extensions with a profit. This is seen basically as the abuse of the route and HO is rejecting individuals who claimed to have invested in assets.
There is no justification for you to spend your entire capital in a commercial property or a get an expensive lease to set up an accounting business, it practically makes no sense and HO views this as an attempt to game the system to just stay here in the UK. You better sign a long term rental agreement to start with and get a lease or purchase an office if they business takes off later from your profits.

Thanks Zimba,

It seems that HO wants entrepreneur to spend money rather investing. As per accounting convention investment is something that is on your balance sheet. So for all three year (after investment) your Balance sheet should look like,

Assets – 50K

Financed by:
LT DLA – 50 K

Anyway, at the end of three-year period my spending will be approximately will be 90K comprising approx. 51 K- Salary payments, 19 K Consulting/Subcontract, 5K Furniture & equipment, rent 9K, other expenses such as insurance, software, subscription 6K all those offset against my revenue. Are those expenses being treated as investment by HO?

Do I need to maintain 50 K at the end of year three even after investing(spending) on above expenses? If yes than There will be a large cash balance left because expenses are offset against income!

[AXL123]

Anyway, at the end of three-year period my spending will be approximately will be 90K comprising approx. 51 K- Salary payments, 19 K Consulting/Subcontract, 5K Furniture & equipment, rent 9K, other expenses such as insurance, software, subscription 6K all those offset against my revenue. Are those expenses being treated as investment by HO?

Do I need to maintain 50 K at the end of year three even after investing(spending) on above expenses? If yes than There will be a large cash balance left because expenses are offset against income!

Zimba88, Gurus and those who have successfully applied for extension,

Will appreciate any help!

[zimba]

Anyway, at the end of three-year period my spending will be approximately will be 90K comprising approx. 51 K- Salary payments, 19 K Consulting/Subcontract, 5K Furniture & equipment, rent 9K, other expenses such as insurance, software, subscription 6K all those offset against my revenue. Are those expenses being treated as investment by HO?

General expenses of running your business are perfectly fine as long as those were not spent only to benefit you directly (e.g your own salary, dividends, own expenses, etc) Read the guide on what is not acceptable expenses

Do I need to maintain 50 K at the end of year three even after investing(spending) on above expenses? If yes than There will be a large cash balance left because expenses are offset against income!

You do not need to maintain anything