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UK_Lawyer
UK_Lawyer, Solicitor
Category: UK Immigration Law
Satisfied Customers: 2053
Experience:  I am a qualified solicitor and an expert in UK law.
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Maintenance Requirements UK Spouse Visa/Personal Allowance

Resolved Question:

Regarding the Maintenance Requirements for the UK Spouse visa: As a self-employed consultant, my husband is going to have to show that he has earned at least £18,600 (gross profit, I believe) in order to sponsor me in the UK. However, does this gross profit figure include the standard Personal Allowance (which you can earn tax-free per year) of £8,105 for the tax year 2012/13? For example, he has already earned over £20,000 and will most likely earn at least £40,000 by April 2013. But being self-employed, he obviously wants to pay as little tax as is needed, so he would like to claim as many business expenses as possible. We were hoping that he could show a gross profit of £18,600 by claiming enough business expenses (of which he has many!) on the full £40,000 figure. Considering the tax-free Personal Allowance, however, does that mean that he will have to pay tax on the minimum £18,600 needed PLUS £8,105 (the Personal Allowance figure), ie. show a gross profit of £26,705 in total to meet the Maintenance Requirement? Or does the first £8,105 he earns count as both a profit for immigrations purposes AND tax-free for tax purposes (ie. the best of both worlds)? Thanks!



EDIT:  Apologies, I forgot to add:  If at all possible, could you please send me a link/attachment of written proof to back up your answer, just so that I have something to quote directly to the UKBA (their helpline agents give out incorrect and conflicting information ALL the time)?  Thanks :)

Submitted: 1 year ago.
Category: UK Immigration Law
Expert:  UK_Lawyer replied 1 year ago.
Hi thank you for your question. Please remember to RATE my answer OK SERVICE, GOOD SERVICE OR EXCELLENT SERVICE so I can get credited for my time.

The amount whole amount he earns will be taken into account. However, his income is minus expenses, so once he has claimed all his expenses then he pays taken on what is left.

The immigration officers will look at the amount of income he paid tax on, not on his whole income only the amount tax was paid on as that would be his gross income. They will not look at the income which tax was not paid on.

I hope this answers your question if so kindly rate my answer positively so I can get credited for my time.

Kind regards
Customer: replied 1 year ago.

Hi, thank you for your quick reply.


I do need to know the exact FIGURE you are talking about. I need to know the minimum figure he needs to pay tax on.


Is it £18,600 (gross profit, NOT including any expenses)?


Or is it £26,705 (ie. £18,600 + £8,105 for 2012/13)?

Expert:  UK_Lawyer replied 1 year ago.
Thank you for your reply.

The amount is 18600 pounds gross after expenses have been deducted.

The following link provides the the following information :

n respect of self-employment in the UK as a partner, as a sole trader or in a franchise all of the following must be provided:

(a) Evidence of the amount of tax payable, paid and unpaid for the last financial year.

(b) The latest:

(i) annual self-assessment tax return to HMRC (a copy or print-out);
(ii) Statement of Account (SA300 or SA302); and,
(iii) the same for the previous financial year if the latest return does not show the necessary level of gross income, but the average of the last 2 financial years does.

(c) Proof of registration with HMRC as self-employed if available.

(d) Each partner's Unique Tax Reference Number (UTR) and/or the UTR of the partnership or business.

(e) Where the person holds or held a separate business bank account(s), bank statements for the same 12-month period as the tax return(s).

(f) personal bank statements for the same 12-month period as the tax return(s) showing that the income from self-employment has been paid into an account in the name of the person or in the name of the person and their partner jointly.

(g) Evidence of ongoing self-employment through:

(i) evidence of payment of Class 2 National Insurance contributions (for self-employed persons); or,
(ii) current Appointment Reports from Companies House (for Directors).

(h) One of the following documents must also be submitted:

(i) (aa) If the applicant's business is a registered company that is required to produce annual audited accounts, the latest such accounts; or
(bb) If the applicant's business is not required to produce annual audited accounts, the latest unaudited accounts and an accountant's certificate of confirmation, from an accountant who is a member of a UK Recognised Supervisory Body (as defined in the Companies Act 2006);
(ii) A certificate of VAT registration and the latest VAT return (a copy or print-out) confirming the VAT registration number, if turnover is in excess of £73,000;
(iii) Evidence to show appropriate planning permission or local planning authority consent is held to operate the type/class of business at the trading address (where this is a local authority requirement); or
(iv) A franchise agreement signed by both parties.

(i) The document referred to in paragraph 7(h)(iv) must be provided if the organisation is a franchise.

http://www.ukba.homeoffice.gov.uk/policyandlaw/immigrationlaw/immigrationrules/appendix-fmse/

I hope this answers your question if so kindly rate my answer positively so I can get credited for my time.

Kind regards
UK_Lawyer, Solicitor
Satisfied Customers: 2053
Experience: I am a qualified solicitor and an expert in UK law.
UK_Lawyer and 3 other UK Immigration Law Specialists are ready to help you
Customer: replied 1 year ago.

Hi, sorry - we're still not 100% certain about this.


 


For example, if the Tax Calculation for 2012/13 reads (I am writing it in the template from last year's tax calculation - I assume this is what it would read):


 


Tax Calculation for 2012/13


 


Income received (before tax taken off)


Profit from self-employment: £18,600


Total income received: £18,600


*minus Personal Allowance*: £8,105


Total income on which tax is due: £10,495


 


How I have worked out your Income Tax


Total income on which tax has been charged: £10,495


Income Tax due: £?


 


See? We are worried that even showing a "profit" of £18,600 (brought down from the full £40,000 by deducting business expenses) makes it look like we only paid tax on £10,495 because of the Personal Allowance of £8,105!


 


It does say in the UKBA's Statement of Intent: Family Migration:


"73. The Migration Advisory Committee recommended that the minimum gross annual income for sponsoring a partner, without dependants, should be set at between £18,600 (the level at which in most cases a couple receive no income-related benefits) and £25,700 (the level at which the sponsor is a net contributor to the public finances)."


(Source: http://www.ukba.homeoffice.gov.uk/sitecontent/documents/news/soi-fam-mig.pdf)


 


As this document was written last year, that £25,700 figure would probably be updated as £26,705 (since the new tax-free Personal Allowance for 2012/13 went up to £8,105).


 


Anyway, can you please comment on whether you are 100% certain that based on the above Tax Calculation template, we would definitely qualify as meeting the Financial Requirement? Otherwise, my initial point was correct and we WILL have to show a gross profit (post-expenses but pre-tax) of £26,705 and not £18,600 as you suggested.


 


Thank you!

Expert:  UK_Lawyer replied 1 year ago.
Thank you for your reply.

I have tried looking at the rules again but do was unable to confirm the amount you have stated as being correct. The rules state as follows :

E-ECP.3.1. The applicant must provide specified evidence, from the sources listed in paragraph E-ECP.3.2., of-

(a) a specified gross annual income of at least-

(i) £18,600;
(ii) an additional £3,800 for the first child; and
(iii) an additional £2,400 for each additional child; alone or in combination with

(b) specified savings of-

(i) £16,000; and
(ii) additional savings of an amount equivalent to 2.5 times the amount which is the difference between the gross annual income from the sources listed in paragraph E-ECP.3.2.(a)-(d) and the total amount required under paragraph E-ECP.3.1.(a); or

(c) the requirements in paragraph E-ECP.3.3.being met.

In this paragraph "child" means a dependent child of the applicant who is-

(a) under the age of 18 years, or who was under the age of 18 years when they were first granted entry under this route;

(b) applying for entry clearance as a dependant of the applicant, or has limited leave to enter or remain in the UK;

(c) not a British Citizen or settled in the UK; and

(d) not an EEA national with a right to be admitted under the Immigration (EEA) Regulations 2006.

E-ECP.3.2. When determining whether the financial requirement in paragraph EECP.

3.1. is met only the following sources will be taken into account-

(a) income of the partner from specified employment or self-employment, which, in respect of a partner returning to the UK with the applicant, can include specified employment or self-employment overseas and in the UK;

(b) specified pension income of the applicant and partner;

(c) any specified maternity allowance or bereavement benefit received by the partner in the UK;

(d) other specified income of the applicant and partner; and

(e) specified savings of the applicant and partner.

E-ECP.3.3. The requirements to be met under this paragraph are-

(a) the applicant's partner must be receiving one or more of the following -

(i) disability living allowance;
(ii) severe disablement allowance;
(iii) industrial injury disablement benefit;
(iv) attendance allowance; or
(v) carer's allowance; and

(b) the applicant must provide evidence that their partner is able to maintain and accommodate themselves, the applicant and any dependants adequately in the UK without recourse to public funds.

E-ECP.3.4. The applicant must provide evidence that there will be adequate accommodation, without recourse to public funds, for the family, including other family members who are not included in the application but who live in the same household, which the family own or occupy exclusively: accommodation will not be regarded as adequate if-

(a) it is, or will be, overcrowded; or

(b) it contravenes public health regulations.

http://www.ukba.homeoffice.gov.uk/policyandlaw/immigrationlaw/immigrationrules/app-family-members/family-life-as-a-partner/

18,600 does seem to be the gross amount required as stated in the rules.

I hope this clarifies the matter.

Kind regards
Customer: replied 1 year ago.

As you mentioned, it is still not 100% clear - I think this is due to the UKBA's guidelines being unclear.


We have decided to write a formal letter to the UKBA and hopefully receive a definite answer - we will provide their answer here if possible.


 


Thanks!

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