Gross and Net Income taxes Tier 1 to ILR

[saleemd]

Hi,
I applied for Tier 1 General Extension in Dec 2013 and claimed Gross Income of £36,606 which comprises of £21,006 salaried employment and £15,600 Self-employed income.
Total tax paid on self-employment in 2012 and 2013 was £747 and £892 respectively, I had declared same Gross incomes to both the HMRC and home office of (£15,600) but net profit declared to HMRC was £8194 after deducting expenses and tax was calculated on net income. (HO don't ask for net profit anyway)
Just for the record I paid £381.40 in 2014 and then in 2015 finished my self employed status as I lost both my clients.
Will the home office question this or does the case worker understand tax calculations?? i'm planning to apply PEO in March? What documents should I take to proof that i didn't evade any taxes? should i submit my SA302??
I didn't make any tax amendments as it wasn't needed, as i stated Gross income declared to the HO was the same to HMRC. Currently I'm working full time and have only one salaried income which is over 35k and enough for the points.
After reading so many rejections on ILR due to tax payments, i just need guidance and opinions from the seniors in this forum so that I am prepared before applying.
Your help would be much appreciated many thanks

[Abc499]

Hi,
I applied for Tier 1 General Extension in Dec 2013 and claimed Gross Income of £36,606 which comprises of £21,006 salaried employment and £15,600 Self-employed income.
Total tax paid on self-employment in 2012 and 2013 was £747 and £892 respectively, I had declared same Gross incomes to both the HMRC and home office of (£15,600) but net profit declared to HMRC was £8194 after deducting expenses and tax was calculated on net income. (HO don't ask for net profit anyway)
Just for the record I paid £381.40 in 2014 and then in 2015 finished my self employed status as I lost both my clients.
Will the home office question this or does the case worker understand tax calculations??

Your understanding is not correct.
If you claim £15600 as self-employed income to cover the threshold then it should be net income. if you paid tax on SA £8194 then on that period your income was £21006+£8194= £29200 and not £36606 which you claimed to HO earlier.

[monty87]

Just for the record I paid £381.40 in 2014 and then in 2015 finished my self employed status as I lost both my clients.
Will the home office question this or does the case worker understand tax calculations?? i'm planning to apply PEO in March? What documents should I take to proof that i didn't evade any taxes? should i submit my SA302??
I didn't make any tax amendments as it wasn't needed, as i stated Gross income declared to the HO was the same to HMRC. Currently I'm working full time and have only one salaried income which is over 35k and enough for the points.

Your understanding is wrong. You're awarded points for self-employment income on your net profit and not gross/turnover. There is discrepancy between income declared to HO and HMRC. I would suggest to seek legal advice whether to do amendments prior to ILR or submit ILR application with evidence and explanation why there is a discrepancy.

[noajthan]

Hi,
I applied for Tier 1 General Extension in Dec 2013 and claimed Gross Income of £36,606 which comprises of £21,006 salaried employment and £15,600 Self-employed income.
...
Will the home office question this or does the case worker understand tax calculations?? i'm planning to apply PEO in March? What documents should I take to proof that i didn't evade any taxes? should i submit my SA302??
...
After reading so many rejections on ILR due to tax payments, i just need guidance and opinions from the seniors in this forum so that I am prepared before applying.
Your help would be much appreciated many thanks

You may not have underpaid tax but in that case you have overstated s/e income for visa purposes - which HO is likely to interpret as deception.
Expect a bumpy ride.

[saleemd]

Thanks for the reply
so what you do guys suggest should i make an amendment or just submit with an explanation?
i thought home office only ask for gross income whether its employed or self-employed. its an error in understanding law, what seems to amaze me is that I clearly mentioned Gross income from self-employment when i submitted my paper work in Dec 2013. I showed £36,606 of gross income and not net, still the visa was granted.

[masterpeas]

Thanks for the reply
so what you do guys suggest should i make an amendment or just submit with an explanation?
i thought home office only ask for gross income whether its employed or self-employed. its an error in understanding law, what seems to amaze me is that I clearly mentioned Gross income from self-employment when i submitted my paper work in Dec 2013. I showed £36,606 of gross income and not net, still the visa was granted.

it seems HO did not check that error when issuing you the visa back in 2013, you were lucky. It is always NET income for self-employment, as we certainly cannot claim revenue as our income because expenses are involved...

good luck on the application, its a matter of luck i think, you may get it. But there is nothing wrong for you to amend the tax as you paid tax correctly. Just that HO did not check your file properly before which may give you trouble this time, and may not be positive!

[saleemd]

Hi
Yes I am planning to seek professional advice on whether I should amend the tax or not, I've paid tax on £8500 and didn't have any intention to deceive the HO. just a factual error.

Can seniors in this forum recommend a strategy whether tax amendment is the only solution or do I have other ways. any kind of help would be appreciated. Many thanks

[saleemd]

Hi,

I have met a couple of lawyers who have seen my tax returns for 2012 and 2013 and also read my previous immigration history.
In 2013 when i applied for the Tier 1 General visa the HO rejected the application on the basis of deception and non-genuine self employed income which I then won in court and got the visa for 3 years.
In my 2013 application everything was shown on Gross income and the HO had plenty of time to check whether I have submitted Gross or Net figures. My period of income claimed was from Dec 2012 to Dec 2013 and I paid tax on the net amounts. If i get a tax amendment it will show that i did it just because of the visa and if i don't do it they will reject in both cases but at least the clause of deception will not be more imminent as I didn't lie to them in the 2013 application.
Another point of discussion i submitted my tax returns for 2012 on net income as part of the application in Dec 2013 and that wasn't questioned at all.
the HO are really on thin ice if they question the 2013 application as I won it in court?? my accountant is willing to explain all the expenses incurred in 2012 and 2013 returns which are all legitimate ( my legal cost, transport cost, stationery, rent relief and etc).
Is this the right approach or should i still amend the tax?? would appreciate a response from the seniors thanks