Part 2 - How to calculate £18,600 income for self-employed for Spouse/Partner visa under the New Rules?

By 1st 4Immigration - #1 UK Immigration Experts -

The New Family Rules cover quite well the subject of how to calculate income for employees to meet the Financial Requirement. Every employee has (or should have) payslips and bank statements. However, it is not clear to many applicants how to calculate income of self-employed people. Let us not forget that the UKBA policies are most likely written by their staff who by definition are employees. Our company has extensive experience with assisting with cases for self-employed people (all cases successful). Plus we understand what it means to have a business as we run a business too!

If the applicant’s partner and/or the applicant (if in the UK with permission to work) is in self-employment at the date of application and in the last full financial year received self-employment income it can be used to meet the Financial Requirement.
What’s meant by a ‘full financial year’? If a person is self-employed as a Sole Trader or Partner then their financial year would be a UK tax year, ie for the last period from 6 April to 5 April.

If a person has a limited company then their financial year would be company’s financial year. It is a year for which the company prepares accounts, accounts which get submitted to the HMRC and Companies House. It is also the same period as covered by a form CT600.
During the financial year (tax year or company year respectively) a person can add hid earnings from this limited company (salary, dividends) plus income from renting a property out, plus perhaps part-time job working for someone else etc.

Does one have to be self-employed for a ‘full’ financial year? No, ‘full’ refers to the documents covering a financial year rather than a person working for a full year. With limited companies it would be an accounting year. However, in case of a Sole Trader or Partner he/she needs to show their tax returns showing earnings from self-employment being minimum £18,600 in the respective tax year, regardless of when during the tax year he/she started self-employment. For example, if a person registered as self-employed in August then his/her tax return would still be up to 5 April next year. If that tax return shows earnings of £18,600 from August to 5 April then it would be OK for a visa – since the person managed to earn £18,600 during the period August – 5 April. 
Director’s Salary. Most company owners are paying themselves a ‘salary’ (Director’s salary) and the rest in dividends. Many clients ask us if they could simply provide payslips and matching bank statements for the salary only (without dividends), in other words, salary they paid themselves through PAYE, many are prepared to do so for 6 months to achieve £18,600 annual gross figure. This would simplify their applications a great deal, as they would like to apply under category A or B (employment, not self-employment). We have had a clarification on this from the UKBA policy department and the answer was: No, Director’s salary will be assessed in the same way as ‘self-employed’ and for the same period as company’s financial year (as above).

For a detailed advice or an application please contact us info@1st4immigration.com or visit www.1st4immigration.com     

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