The specific rules for those who are self-employed can become a little more complex and confusing.Originally Posted by Mac M
If you feel comfortable with your own research and understanding that's fine.
If there is any doubt whatsoever, it may be worth spending a small fee for a good professional and experienced consultation with your accountant.
You can always double check here for the immigration rules implications.
For self-employed there are two main categories:-
- Category F - you are in self-employment at the date of application and using income from the last full financial year to meet the financial requirement.
- Category G - you are in self-employment at the date of application and choose to use an average of the income received in the last 2 full financial years to meet the financial requirement.
Means, for example, if you had a gross taxable income of £16,800 in the last full financial year, but in the previous financial year you received an income of £20,400 the average income from the two financial years would be considered as £18,600
Taxable Income for Self-Employed is business revenue less business expenses.
Your business may have an annual income of £40000
But if the annual business expenses are £25000 then the Financial Requirement is not met.
If your business accounts show that you are being taxed on an amount less than £18600then the application will fall for refusal.
Quite a number of people have slipped up on this.
Sometimes it may be necessary to adjust the business expenses structures and 'tax-breaks so that your taxable income is £18600 or more.
Sounds strange but be aware.
Under 'normal' conditions you may be trying to keep taxable income to a minimum.
Under UKBA requirements you may need to uplift your taxable income.
Your accountant can help with this but just be sure you meet the requirement.
All of the following must be provided:-
(a) Evidence of the amount of tax payable, paid and unpaid for the last full financial year.
(b) The following documents for the last full financial year, or for the last two such years (where those documents show the necessary level of gross income as an average of those two years):
(i) annual self-assessment tax return to HMRC (a copy or print-out);
(ii) Statement of Account (SA300 or SA302).
(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 evidence of payment of Class 2 National Insurance contributions.
(h) One of the following documents must also be submitted:
(i) (aa) If the business is required to produce annual audited accounts, such accounts for the last full financial year; or
(bb) If the business is not required to produce annual audited accounts, unaudited accounts for the last full financial year 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 VAT return for the last full financial year (a copy or print-out) confirming the VAT registration number, if turnover is in excess of £79,000 or was in excess of the threshold which applied during the last full financial year;
(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.
The specific details and mandatory supporting documentation can be found in Annex FM Section FM 1.7: Financial Requirement
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