Tax discrepancies – Tips to challenge a Tier 1 (General) Visa Settlement refusal

Although the Tier 1 (General) visa route has closed, and applications for settlement had to be submitted by 6th April 2018, many Immigration solicitors are still acting for clients whose applications for settlement are currently progressing through the system. Recent indications suggest that discrepancies between earnings declared to the HMRC for tax purposes, and those declared to the Home Office as part of an application for Indefinite Leave to Remain under the Tier 1 (General) route, are causing significant problems, in some cases leading to unjustified refusals.

The Tier 1 (General) visa route

The Tier 1 (General) Visa route offered visas to migrants who could evidence a certain level of education and earnings. Successful applicants could come to the UK and seek work without needing to have a sponsor, or to make the most of self-Employment or business opportunities. After 5 years’ lawful residence in the UK, those on a Tier 1 (General) visa could apply for settlement. The route closed to applicants from outside the UK in 2011, and applications for an extension of a Tier 1 (General) visa have not been possible since 2015. Applications for settlement under the route were closed on 6th April 2018, however many Immigration lawyers are still involved as many applications remain undecided or have been refused.

The ‘earnings’ criteria for settlement

Applying for settlement involves accruing a specified number of points relating to

- Age

- Knowledge of English

- Education

- Earnings

Applicants also have to pass the Life in the UK test, prove 5 continuous years’ lawful residence in the UK and satisfy the absences threshold. It seems that where there is a perceived discrepancy between earnings declared for the purposes of the settlement application, and for tax purposes, the Home Office refusing the application, regardless of the points that applicant can evidence. In doing so, the Home Office is basing the decision on the applicant’s lack of ‘good character’ – or more specifically, “…the undesirability of permitting the person concerned to remain in the United Kingdom in the light of his conduct…” (Immigration Rule 322(5)).

How are earnings discrepancies arising?

The Home Office has remarked on the number of applications for Indefinite Leave to Remain where the amount of earnings stated seems to be higher than amounts declared to HMRC for tax purposes. However, many Immigration solicitors in London can point to several reasons why this might be the case.

- In many cases, the tax reporting year may be different to the ‘Immigration’ year

- For the self-employed, income may fluctuate

- There may differences distinguishing earnings from Employment, from self-Employment and form directorships. If people hold a number of different Employment statuses, this can be even more complex.

‘Good Character’ refusals based on tax corrections or reporting inconsistencies

While the complexities of calculating earnings may lead to some people failing to achieve enough points to be eligible for settlement, what is perhaps more worrying is the use of the ‘good character’ basis of refusal by the Home Office in some of these cases. While applicants have sought to correct tax calculations – as they are entitled to do under the HMRC rules – before submitting their application for Indefinite Leave to Remain, it seems that the Home Office is treating such activity as evidence of wrongdoing, and an admission of guilt. In fact, the ‘good character’ reason for refusal should be reserved for far more suspicious activity than the behaviour of a business person carrying out legitimate adjustments to their financial reporting. Realistically, the number of people genuinely attempting to abuse the Immigration route is likely to be small.

The Guardian recently reported the devastating impact of a good character refusal on one family. Vijay Sidarth, a specialist computer programmer was refused Indefinite Leave to Remain, even though this appears to have been based on the fact that he made a correction to his tax return within the period allowed by HMRC. He is now unable to work, and unable to apply for any other UK visa for 10 years, despite the fact that he lives in the UK with his wife and children. Although it is not clear whether his application for Indefinite Leave to Remain was based on his previously holding a Tier 1 (General) visa, it clearly highlights the severe consequences people face if their application is refused on good character grounds.

What can applicants for Indefinite Leave to Remain do?

If the Home Office raises discrepancies between your earnings stated in your Indefinite Leave to Remain application and your tax records, you need to be able to provide as much information as possible to explain how the discrepancy has arisen, and why it is not reflective of your character.

If you have had your application for settlement refused, you must act quickly. You will have 14 days to ask for an administrative review. The Home Office then has 28 days to reconsider the decision. An administrative review can only look at the decision-making process – not the substance of the decision. If your application has been refused on good character grounds, you can’t submit fresh evidence relating to your character to dispute this as part of the administrative review. Although an applicant may stay in the UK during this period, a good character refusal can lead to expedited removal instructions, leaving an individual with little time to finalise his business and personal affairs in the UK.

Given the complexities involved and the potentially devastating consequences of a refusal, it is worth taking advice from some of the best Immigration lawyers in London. Whether you have submitted your application and the Home Office have asked some questions before making their decision, or you have received a negative decision in response to your application for Indefinite Leave to Remain, specialist London immigration solicitors can give you the advice and support to help you achieve the best outcome.

OTS Solicitors have many years’ experience in advising clients on all aspects of UK visa applications. We are recommended in the Legal 500 for Immigration and Human Rights law and offer intelligent and practical advice to all our clients, whatever their situation. To book an appointment to talk to one of our top UK Immigration lawyers, call 0203 959 9123 today.