Money Money Money

December 13, 2012


A recent judgment concerning a Tier 1 (General) refusal has caught our eye and, since it has been a while since we’ve blogged about an immigration court case, we thought we’d share it with our readers and give some of our own advice regarding Tier 1 (General) applications.  As ever, we invite you to leave your own experiences and views in the comments section below.

Tier 1 (General) extension applications – the background

The Tier 1 (General) visa category was introduced in February 2008, replacing the Highly Skilled Migrant Programme (HSMP).  This visa followed its predecessor in that it was designed to enable highly skilled individuals to work in the UK on either an employed or self-employed basis and would lead to settlement after five years.  It proved to be a popular visa, particularly with young professionals who set up businesses such as consultancies or limited liability companies in the UK.  However, the category was closed to new applicants from abroad on the 23rd December 2010, as part of the coalition Government’s plans to reduce overall UK migration.

Tier 1 (General) was then closed to in-country applications on the 6th April 2011, with exceptions for those who already held Tier 1 (General) visas or who had held visas in certain other categories such as the HSMP.  Individuals who already held the Tier 1 (General) visa could still extend so that they would complete the qualifying period for settlement, and HSMP visa holders could switch into the Tier 1 (General) category when their visas came up for expiry.

The Tier 1 (Investor) and (Entrepreneur) categories have been introduced to make provision for non-EEA nationals seeking to invest in or establish a UK business.  However, the financial requirements for these visa categories are considerably more onerous than those which were needed to qualify for a Tier 1 (General) visa and mean that there have been far fewer applications in these categories than the Government would wish.  Nevertheless, as the Immigration Rules become tougher we are being approached by increasing numbers of applicants who are interested in applying in these categories as there are scarce few options for those who wish to set up their own business, or who cannot find employment with a Tier 2 Sponsor.

The Basics

In order apply for either leave to remain or Indefinite Leave to Remain (ILR) as a Tier 1 (General Migrant), you must score 75 points for attributes if you were first granted leave in this category before the 19th July 2010.  Otherwise, if you were first granted leave in the category after 19th July 2010, you must score 80 points for attributes.

The ‘attributes’ for which you can score points are your age at the date of your initial application, your qualifications, earnings and UK experience.  Appendix A of the Immigration Rules explains the points which you will be entitled to and confirms the type of evidence which will accepted in support of your application. 

We find that it is the previous earnings aspect of these applications which causes clients the most complications.  Particularly if the applicant is self-employed or operates through a limited liability company, determining the necessary documents which should be submitted in support and ensuring that these documents are in the correct format can be more difficult that one might initially assume.

We also receive queries regarding the type of income which can be included in the previous earnings claimed.  It is important to bear in mind that sometimes, not all of an applicant’s income can be included in the period of earnings claimed for Tier 1 (General) purposes.  For example, while you may include earnings made through full-time or part-time employment, bonuses and allowances which form part of your remuneration package and are specified on your payslips (i.e., accommodation or schooling allowances), you may not include unearned sources of income such as allowances which are paid as a reimbursement for monies that you have previously paid, interests on savings and investments, or monies paid to you as a pension.

The case which recently caught our eye has highlighted the importance of having an exact understanding of the type of earnings which you can include in your application for further leave to remain or ILR as a Tier 1 (General) migrant…

JE (Uganda) v Secretary of State for the Home Department – [2012] EWCA Civ 1437

The case concerned a national of Uganda who had been in the UK since 2001 and, in September 2009, applied for leave to remain as a Tier 1 (General) Migrant.  The appellant included a sum of £4,299.22, which represented his employer’s pension contributions, as part of his earnings in the Tier 1 (General) application.  However, the UKBA refused to take those contributions into account which meant that the applicant did not score sufficient points under Appendix A and the application was refused. 

Following this refusal the applicant appealed and eventually the appeal came before the Court of Appeal (Civil Decision).  As Lord Justice Richards stated succinctly: ‘the short point raised by this appeal is whether an employer’s pension contributions form part of a person’s “earnings” for the purpose of calculating whether he meets the requirements for leave to remain as a Tier 1 (General) Migrant under paragraph 245C of the Immigration Rules.’

The Court looked at the relevant provisions of the Immigration Rules which applied at the date of the UKBA’s initial refusal.  They examined Appendix A and the provisions regarding earnings (at paragraphs 23-26 in today’s Rules) which at the time stated that ‘monies paid to the applicant as a pension’ were unearned sources of income and could not be counted as earnings for purposes of a Tier 1 (General) application.

Lord Justice Richard found that ‘although an employer’s contributions to a pension scheme are part of the employee’s overall package of benefits, they are different in kind from monies that he receives or is entitled to receive for the work he does – they do not form part of his income – and it does not seem to me to be a natural use of language to refer to the contributions themselves as earnings.’  It was held that since a pension was not included within the allowed types of earnings under Appendix A, and  pension contributions did not ‘themselves form part of the employee’s receipts or income for the work he does,’ they could not be included by the UKBA in the calculation of the appellant’s earnings when assessing his application.  The appeal was therefore dismissed.

We should highlight the fact that the UKBA has since amended the list of unearned sources of income in Appendix A which will not be included as earnings to include at 26(g) ‘employer pension contributions or monies paid to the applicant as a pension.’

The case demonstrates that when it comes to meeting the financial requirement for Tier 1 (General) applications, the UKBA will apply a strict approach and appeals to exercise their discretion will fail.  The income you claim must meet the criteria listed in Appendix A, and fall in one of the accepted categories of earnings.  If you are at all unsure about whether your earnings meet the requirements of the rules, you must seek clarification before making any application, to avoid a refusal and the associated complications.

Please leave your general comments below but if you have any specific queries about Tier 1 then please feel free to give us a call on 0207 0012121 or contact us.