How to calculate £18,600 income for self-employed for UK Spouse / Partner / Fiancee visa under the current rules?

By 1st 4Immigration - #1 UK Immigration Experts -
The 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 (and many immigration lawyers) how to calculate income of self-employed people. Let us not forget that the UKVI policies are written by their staff who, by definition, are employees. We at 1st 4Immigration are very keen on working with self-employed visa applicants and sponsors, as it is very interesting and often more challenging.
 
Our company has extensive experience with assisting with all types of cases for self-employed people: a sole trader (self-employed in HMRC terms), a limited company owner (a company based in the UK or overseas), a partner in a partnership or LLP, including a contractor / freelancer, working through an agency or umbrella company - you name it, we've done it! We love this subject because we are immigration entrepreneurs (ie "self-employed") and the founders of 1st 4Immigration are a couple who have been through this very process of Spouse visas more than 10 years ago (and happened to work through some dramatic visa rules' changes since then).
 
All of our cases in this category have been successful, and visas have been granted!
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, the ones which are then submitted to the HMRC and Companies House. It is also the same period as covered by a form CT600.
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 they need 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 they 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). The answer is 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).
 
The above is a good start on the subject, but there are further extensive requirements. For example, a limited company's financial year can be "manipulated" (in a good way and of course, legally) to avoid a long wait until the end of the current financial year. Furthermore, the Rules are fundamentally different if a limited company is based outside the UK.
 
PS Some food for thought: a limited company is now owned by directors; can be but doesn't have to be. A company is owned by shareholders, yet in the above, did you see any reference to shareholders at all?
 
For a detailed advice, or to make an application, whichever combination of financial resources you are hoping to us, please contact us info@1st4immigration.com or visit www.1st4immigration.com     

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