IT contracting with T1 Enterprenur

[nimmi007]

Hi All

Is there anyone who has already got the T1 Ent visa and started to work as IT contractor .

Was the visa accepted by the Agencies without any issues ?

Cheers
N

[rahulsingh1]

yeah - i have a IT contractor on T1 E visa who works for us. And I know a few who do the same.

Its not an issue at all.

The agencies are taking their time to understand this new visa.
But when asked for visa status, just mention Tier 1. Dont mentioned T1 (E) in the start itself, and start explaining its features and virtues to them. It will confuse them. Keep things simple.

Only after they see the visa sticker and ask, explain to them that you can only contract.

Again, This is an old question- please read the whole forum completely before asking questions which have been answered many times in similar threads.

[nimmi007]

Hi

I got my visa now and 2 contract jobs being rejected by the agency

It's a problem that needs to be discussed

[rahulsingh1]

what are they saying though ?
what is the agency name if you can share?

[nimmi007]

Hays .... It is

They say u can have contracts with the company direct but not thru employment agency

[rahulsingh1]

thats rubbish to be honest.

the Contractor who works for us works through another agency( with back to back contracts) and that is how the industry works.

I think the person you are dealing with at Hays is a bit thick.

You need to explain to that person that you will not become an employee of hays (if thats what they are asking of you), but will have a contract with them like any contractor(to provide services to their client, via them)...

[nimmi007]

Rahul it looks like you are the only person in this forum supporting this issue ,
I spoke to various people in hays about this issue and they are very clear that they are not signing a contract with anybody on t1 net visa

I would like to get comment on this issue from the admin please

Cheers

[babylondoner]

nmimi007

hays is NOT the only agency operating in the UK. if they have refused to give you a contract, please look elsewhere and quit whinning.

if they are ignorant about the law, that is their bloody headache.

[rahulsingh1]

I sort of agree with Baby Londoner.

But having said that, Hays is one of the biggest and cant be ignored, but we should try and show them that what they are doing is nothing but just creating nuisance.

And bec they are the biggest, they have a responsibility to interpret the law correctly.

[maverick_76]

In my humble opinion, technically you can do contracting on Entrepreneur visa however this visa was not designed for the same. And I am certain if you write the same in your business plan while submitting application your visa will get rejected.
However if you are doing contracting as part of your company on a project where you have hired more people as part of your team then certainly you are not even violating the spirit of the visa.

If your sole aim is to do contracting then I think you should consider a different route. Think about what will happen at the time of extension? How would you show employment creation. Also remember if you even have spent 3 years on some other visa and you are switching, you definitely will have to show job creation even if you are applying for ILR after 2 years on Ent visa.

[Entrepreneur999]

Even page personnel refused to provide contract on Entrepreneur visa. Rahul I have sent you pm.

[Sonia...]

@ maverick_76 .. Technically and legally you can work as a IT contractor with recruitment agencies and also create two jobs at the same time. I will explain u how in a bit. Also the recruitment agencies are taking time to understand this route. If you communicate the nature of this route well to the recruiters or if you are able to share the email conversation you had with Home Office rep about working as a contractor, you can win recruiter's trust. HO fully accepts over the phone that you are allowed to work as a contractor at client base and i know of few people who shared their email conversation of HO confirmation with the recruiter and had their contract running.

Now for creating the two jobs. Firstly you don't have to create two jobs for all five years. You have to create two jobs for a year or one job for two years. Now the process is pretty simple. Just work as an IT contractor at client base and run another side project under your company in which u need to create an employee. For eg you can work as an IT contractor and run another e-commerce web where you can create a job or another example could be to secure another contract/project, such as creating a website for someone or setting up server/network, etc for someone and then create a job for that contract/project.

[Sonia...]

In short, you can have as many contracts in t1entrepreneurs. So secure one contract where you can work as IT contractor at client base and secure other contracts/projects where you can create a job without going to client base .. I am sure anyone of us can create a website or give any service related to IT to a friend. Just turn it into a proper contract and then create a job.

[kaps84]

In short, you can have as many contracts in t1entrepreneurs. So secure one contract where you can work as IT contractor at client base and secure other contracts/projects where you can create a job without going to client base .. I am sure anyone of us can create a website or give any service related to IT to a friend. Just turn it into a proper contract and then create a job.

Hi Sonia..., I hope you understand that you can not do sub-contracting on this visa (T1 Entrepreneur).

You Can't:
========
You -------------------> Agency -------------> Client
(IT Sub-Contractor) (IT Contractor)

Your contract is with the Agency and the Agency has the contract with the client. You can not sit at the client location of your contractor (the agency). Here you are doing IT sub-contracting which is not allowed.
Hays is an agency not the Client. So whatever Hays is saying is correct.

You can:
=======
You -------------------> Client
(IT Contractor)
Here you will be working either from your location or at the clients location. Which is fine. Here you are doing IT contracting.

The above illustration is as per my understanding.

Thanks,
Kaps

[kaps84]

In short, you can have as many contracts in t1entrepreneurs. So secure one contract where you can work as IT contractor at client base and secure other contracts/projects where you can create a job without going to client base .. I am sure anyone of us can create a website or give any service related to IT to a friend. Just turn it into a proper contract and then create a job.

So if you are doing both IT Sub-contracting (1st part) and IT-contracting (2nd Part), than in the 1st part you are breaching the visa rules. My understanding is that it is absolutely not allowed. They will fetch out your details within minutes using your NI (National Insurance) number that you are taking salary (your payment) from agency and working at their client's location.

Your thoughts please.

- Kaps

[solomondid]

I use very renowned solicitors and accountants to keep my business and my status up to date from what I hear from them is contracting is just another form of employment in view of this particular visa status to HO. I was pointed to the new policy guidance where it is mentioned if you stick to employers schedule and you personally have to be present to validate the contract then its employment, example database developer working on a contract through an agency which specifies that you in person have to be present to fulfil the requirement of the contract and you can not send a replacement in case if you fall sick or unable to attend due to some other reason if you are given rights such as public holidays, parent and sick leaves no matter how you construct your contract with the agency it will still be considered employment. I am not an expert just my views, may be wrong please consult good solicitors who are fully aware of the current situations to get more clarification on this.

[ecaLegal]

It would be seen as employment by the Home Office, so even if the agency does hire you, you would not be advised to take it as it would put your visa at risk.
The main point is though that an agency, or any other business, is not compelled to employ you even if you think they are allowed to. They take their own position of risk, and even if the employment were permitted (and it isn't) it is entirely their decision as to who they employ.

[Sonia...]

I have been working as an IT Contractor with an agency in the category of Tier 1 Entrepreneur visa for last two years. Currently I am doing my fourth contract. As a matter of fact I also have a strong accounting background and so file all my accounts, VAT, payroll, etc, on my own. Let me also confirm that I have two other peers who also happen to work as contractors with an agency in this category. Both works as Cost Accountant in two separate companies.

I might have to draft an entire theses to explain how its possible as I have to gradually build your concepts in terms of few important policies of HMRC but I will give my best shot with references to HO documents. Can I also request everyone to share any of your understandings with references to Home Office links or documents. There is no point sharing your knowledge if you cannot justify it with authentic source.

I believe many of the members in this discussion assume that the role of agency is to hire (employ) an individual and then send him to the client base on its behalf. Yes that is what agencies were limited to only 8 to 10 years ago. With the growing trend of contracting, agencies have now expanded its role and started to fill the positions of contractors where they do not actually have to hire (employ) anyone anymore. Instead of signing an employment contract with you directly, the agency signs a contract with your company and another contract with its client. Yes you still work at client base, but only as a sub-contractor (contractor of an agency), rather than an employee of an agency. The client pays the agency and the agency pays your company after keeping its markup. So none of the parties have to run payroll or hire/employ anyone.


Now here comes the complicated bit. The contract agency signs with your company must comply with the 'AGENCY LEGISLATION (a law similar to IR35)'. In other words the contract must mention a clause along with many other clauses that its a 'CONTRACT FOR SERVICES', rather than 'CONTRACT OF SERVICES' (I will explain what agency legislaiton and contract of /for services mean in a bit) but before that please go through the following part taken from Home Office document.

Genuine entrepreneur activity no contract of service with another business)

Migrants must only work for the business or businesses they have established, joined or taken over. Working for such business(es) does not include any work the applicant does pursuant to a contract of service or apprenticeship for another business, whether express or implied, oral or written. The migrant must be:

- Employed as the director of the business they have invested in
- Working in a genuinely self-employed capacity

Where a migrant enters into contracts with another business in this capacity this will normally be regarded as contacts for service.

They may not be considered to be working for their own business if the work they do is considered to be employment by another business. For example, where the migrant’s work involves the business, in effect, hiring
them for their labour or to fill a position or vacancy. This includes where the business hires the individual
using a recruitment or employment agency.

Contracts entered into by the migrant with another business in this capacity will normally be regarded as contacts of service.This applies even if the applicant claims the work is undertaken on a self-employed basis.

You must consider the factors set out at ‘Employment status Index’ when you consider if the migrant’s work amounts to:

- Genuine self-employment - work for the business they have established, joined or taken over
- Employment by another business

If you consider an applicant’s work to be employment by another business, you may consider them to be working in breach of their conditions of stay. This makes them liable for curtailment and/or removal action.

The points shared above are extracted from the following Home Office document (Page 5): https://www.gov.uk/government/uploads/s ... .0_EXT.pdf Please pay close attention to the points I turned bold which clearly state that you are allowed to engage in a contract with another business unless its a CONTRACT FOR SERVICES (in other words the contract comply with agency legislation) and you are working either as a director or self employed.

[Sonia...]

Here is another link of a court case where HO mistakenly refused one of the applicant's visa on the grounds that applicant was working as a contractor with an agency. It's a classic example where case workers are often not well informed with the legalities and difference between contract for services and contract of services. However as the applicant later proves that he was working as a contractor for services and it was clearly stated in his contract, the applicant won the case against HO. Please visit page 3.

http://www.immigrationboards.com/uk-tie ... 73776.html

Now if you have come this far, many of you might be wondering what do you actually mean by all these jargons such as contract of/for services, agency legislation, etc and how can you ensure that your contract with the agency complies with it. Well its all pretty simple but first I need to explain what all these terms mean as having firm grip of these policies is crucial to ensure that your agency contract complies with it.

AGENCY LAW:

If you are subjected to (or to a right of) any supervision, direction, or control as to the manner in which you provide your services during your arrangement/contract, you are subjected to agency legislation. Generally it is considered as 'Contract of Services' as you are working in a manner/relationship of employee of that business although on papers you are a contractor.

However if you are given a free role to complete your task with no one being able to intervene to instruct/manage how the task must be created or look like. The only specific requirement placed on you is that the task for which you are being contracted must be completed and activated before your engagement ends. Generally it is considered as 'Contract for services'

Working at client bases doesn't have to do anything with agency law. You may work at client base throughout ur engagement and will not be subjected to agency legislation/contract of services unless you are not subjected to supervision, direction, or control at client base.

To look deeper into agency legislation, please go through the following link: http://www.hmrc.gov.uk/manuals/esmmanual/esm2029.htm

At this point if you have understood the concept of agency legislation the next big question for many would be how are you supposed to ensure or request you agency to come up with clauses that make you contract compliant with agency legislation (contract for services). Well the good news is 95% of contracts are already compliant with agency legislation. It must include the clauses complying to agency legislation and clearly state that the agency has engaged you in a contract for services. That is because agency legislation/contract for services is not specifically designed for Tier 1 entrepreneurs, but in fact it's designed for all agency contractors irrespective of his/her status. In short, either a contractor is in Tier 1 category or he/she is a UK/EU citizen, all of them along with their agencies have to comply with it. In case an agency is unable to comply with the legislation then it becomes a relationship of employer/employee (contract of services) b/w the agency and contractor and the agency is supposed run payroll/PAYE for its contractor.

Since its a requirement imposed by HMRC on everyone irrespective of his visa status, you don't need to worry about your contract at all. You just need to confirm that its a agency legislation compliant contract. As for the agencies which are unaware of this categories, you need to explain them that you are fully allowed to work as a contractor unless its contract for services (agency legislation compliant) and use the above references. Since agencies are already in the business of designing agency legislation compliant contracts, they will treat you and your contract the same way.

So whats is all this fuss about and why HAYS are not accepting tier 1 entrepreneurs.. I will try to answer these queries below as a response to members who raised such questions.

[solomondid]

I have been working as an IT Contractor with an agency in the category of Tier 1 Entrepreneur visa for last two years. Currently I am doing my fourth contract. As a matter of fact I also have a strong accounting background and so file all my accounts, VAT, payroll, etc, on my own. Let me also confirm that I have two other peers who also happen to work as contractors with an agency in this category. Both works as Cost Accountant in two separate companies.

I might have to draft an entire theses to explain how its possible as I have to gradually build your concepts in terms of few important policies of HMRC but I will give my best shot with references to HO documents. Can I also request everyone to share any of your understandings with references to Home Office links or documents. There is no point sharing your knowledge if you cannot justify it with authentic source.

I believe many of the members in this discussion assume that the role of agency is to hire (employ) an individual and then send him to the client base on its behalf. Yes that is what agencies were limited to only 8 to 10 years ago. With the growing trend of contracting, agencies have now expanded its role and started to fill the positions of contractors where they do not actually have to hire (employ) anyone anymore. Instead of signing an employment contract with you directly, the agency signs a contract with your company and another contract with its client. Yes you still work at client base, but only as a sub-contractor (contractor of an agency), rather than an employee of an agency. The client pays the agency and the agency pays your company after keeping its markup. So none of the parties have to run payroll or hire/employ anyone.


Now here comes the complicated bit. The contract agency signs with your company must comply with the 'AGENCY LEGISLATION (a law similar to IR35)'. In other words the contract must mention a clause along with many other clauses that its a 'CONTRACT FOR SERVICES', rather than 'CONTRACT OF SERVICES' (I will explain what agency legislaiton and contract of /for services mean in a bit) but before that please go through the following part taken from Home Office document.

Genuine entrepreneur activity no contract of service with another business)

Migrants must only work for the business or businesses they have established, joined or taken over. Working for such business(es) does not include any work the applicant does pursuant to a contract of service or apprenticeship for another business, whether express or implied, oral or written. The migrant must be:

- Employed as the director of the business they have invested in
- Working in a genuinely self-employed capacity

Where a migrant enters into contracts with another business in this capacity this will normally be regarded as contacts for service.

They may not be considered to be working for their own business if the work they do is considered to be employment by another business. For example, where the migrant’s work involves the business, in effect, hiring
them for their labour or to fill a position or vacancy. This includes where the business hires the individual
using a recruitment or employment agency.

Contracts entered into by the migrant with another business in this capacity will normally be regarded as contacts of service.This applies even if the applicant claims the work is undertaken on a self-employed basis.

You must consider the factors set out at ‘Employment status Index’ when you consider if the migrant’s work amounts to:

- Genuine self-employment - work for the business they have established, joined or taken over
- Employment by another business

If you consider an applicant’s work to be employment by another business, you may consider them to be working in breach of their conditions of stay. This makes them liable for curtailment and/or removal action.

The points shared above are extracted from the following Home Office document (Page 5): https://www.gov.uk/government/uploads/s ... .0_EXT.pdf Please pay close attention to the points I turned bold which clearly state that you are allowed to engage in a contract with another business unless its a CONTRACT FOR SERVICES (in other words the contract comply with agency legislation) and you are working either as a director or self employed.

I think you have mis understood Home Office's response;

Read whole thing again as C O N T A C T FOR SERVICE, and NOT CONT-R-ACT FOR SERVICE. Also CONT-R-ACT OF SERVICE, CONTACT FOR SERVICE notice the difference. Please read the below carefully;

Migrants must only work for the business or businesses they have established, joined or taken over. Working for such business(es) does not include any work the applicant does pursuant to a contract of service or apprenticeship for another business, whether express or implied, oral or written.

Where a migrant enters into contracts with another business in this capacity this will normally be regarded as contacts for service. They may not be considered to be working for their own business if the work they do is considered to be employment by another business. For example, where the migrant’s work involves the business, in effect, hiring them for their labour or to fill a position or vacancy. This includes where the business hires the individual using a recruitment or employment agency.

Contracts entered into by the migrant with another business in this capacity will normally be regarded as contacts of service.This applies even if the applicant claims the work is undertaken on a self-employed basis.




I am an Entrepreneur myself, have sought similar information from Home Office, have paid for their crappy phone service and after weeks of chase after wasting nearly 15 pounds I got a supervisor on the phone who luckily wasnt indian or philipino where usually all these calls go to, he explained to me this difference. I then went to my solicitor in central london who has served home office in certain capacity and works as a Home office solicitor for the detention cases has explained to me where I may personally serve the role in contract where I am not allowed to send one of my employee to serve the role it is indeed a different form of employment.


This is not to offend you or your intelligence, just an effort to seek the truth behind all assumptions.

I may be wrong, but please try to think it otherwise and dig it more deeper may we all benefit from your effort. Better yet, ask a common sensed Entrepreneurs in any Start up hubs such as Microsoft, Google they all run start up awards and loan programmes including Barclays I have been there, I spoke to many mentors who offer free advice and they all regard it as employment. Lets continue to debate so we come up with right thing to do.

[solomondid]

I have studied and am following all cases which have been refused due to this, notice where applicant had a clause to Substitute in contract has won the appeal, which means the same that anyone from your company can go to serve the contract. This is absolutely a genuine contract. Also where you or your substitute in contract doesnt get any employee benefits such as holidays, parental leaves etc is also a genuine contract. But after all refusals, do you now understand Home Office's (may be) assumption that they have never confirmed working through an agency is fine on Tier 1 E.

[Sonia...]

Your message contains too few characters.

[Sonia...]

Solomon I am not here to debate .. I am fully confident and well researched at what I am doing and the reason I am contributing in this forum is to help others build their careers and make the most out of this category. Having said that I still donot understand how you are interpreting the HO statement. However now I will only share those points where HO clearly states that you are allowed to engaged in 'CONTRACT FOR SERVICES'. Here you go:

The migrant must be:

- Employed as the director of the business they have invested in
- Working in a genuinely self-employed capacity

Where a migrant enters into contracts with another business in this capacity this will normally be regarded as contacts for service.

Solomon what surprises me is the fact that I have even shared a real life tribunal case, where the decision was taken in favor of candidate as he was able to prove that his contract with agency was subjected to contract for services (not form of employment), but you still doubt it.

As far as you solicitor is concerned, I totally agree with him on the fact that if you are the only person serving contract and you are not allowed to send replacement, its a form of employment (Contract of services), but this is the whole point as I have explained above that the agencies now do not design such contracts. Designing such contracts will put them out of their business as this law doesnt only apply to you only, but it also applies to the UK/EU nationals and the agencies themselves. The entire contracting industry will crumble in a day if agencies are unable to comply with this law.

I will give you an example of one of the clauses of my contract. I will paraphrase it as i do not remember the clause by heart. The clause states that you are allowed to send a replacement/employee, but its the client who will decide weather they want to keep that replacement or not. This clause makes it a win win situation for all three of you, the agency and the client in terms of complying the agency legislation. In other words it gives you the right to send an employee, so as your client has the right to reject that employee. Adding this clause along with many other clauses doesnt make u a form of employee.

Another clause I just remebered is that the agency has the right to terminate you without any notice period, however if they do so they are also liable to pay your company one months payment. Once again, adding this clause put u and your agency out of the relationship of employer/employee as no employer can legally terminate his employee without giving any notice period, but the one month's payment that agency is liable to pay puts u in a winning situation as well.

Similarly there are many more clauses that agencies are well aware of and are utilizing it in their favor as adding those clauses puts u out of employment reationship with the agency and all three of the parties can equally enjoy the benefits of contracting industry.

[Sonia...]

Lastly I would just like to comment on few, highly disturbing statements made in this forum.

Hays is an agency not the Client. So whatever Hays is saying is correct.

@ Kaps .. Hays is an agency, not Home Office. As I have stated above that I am currently on my fourth contract, out of which three of those contracts were with agencies similar to Hays. On top of that I have two other peers, who also happen to work as contractors with agencies. They are currently working in the role of cost accountant, but with two separate agencies.

The reason why Hays and some of the agencies are struggling to accept tier 1 entrepreneurs is because this category is still quite new for many. Agencies are taking time to fully accept and understand the complications/minute details that come with this category. I, along with one of my peers were quite successful at convincing two agencies how its perfectly fine and legal to accept tier 1 entrepreneur as a contractor. I will share few tips with you guys in my later posts.

Also one must be aware that Hays does offer few IT contracts but doesnt particularly specialize in IT contracting. So far I havent had a single IT contract with Hays . Secondly, it must has had a pretty uninformed, thick headed individual looking after its policy making when it comes to accpeting tier 1 entrepreneurs, however their decision must not make any difference to us as there are plenty more agencies accepting tier 1 entrepreneurs. ..

So if you are doing both IT Sub-contracting (1st part) and IT-contracting (2nd Part), than in the 1st part you are breaching the visa rules. My understanding is that it is absolutely not allowed. They will fetch out your details within minutes using your NI (National Insurance) number that you are taking salary (your payment) from agency and working at their client's location.

No offense Kaps but this one of the most senseless statement I have read so far in this board. I urge everyone that if you are not coming from a legal/accounting background, please avoid making such statements as it may easily misguide someone and cost him/her their career.

Kaps if an individual is doing IT sub-contracting, first of all he is not breaching the visa rules as explained in the above posts with references. If you still think he is, can you please share your references to your statement. However whats even shocking about your statement is the fact that sub-contractors' details can be fetched through NI. Kaps you must know by now that if a person is working as sub-contractor or contractor, in both cases the payment is made directly to his business and he doesnt have to give any of his NI details to the agency to receive the payment. The NI is supposed to be deducted on individual's salary only, not on the payments made to companies/businesses, so therefore the agency is not responsible/liable to deduct NI as the payments are made to the individual's business/company in case its a subcontractor. The subcontractor then decides the amount of salary he wants to pay himself through his business and calculates NI accordingly.

[kaps84]

Hi Sonia, Thanks for sharing the wealth of knowledge.

My opinion so far was based on my knowledge thus far (though now looks to be very limited, even to me).

So what you mean is that it is all about 'how you write the contract'. If, as the director/employee of your own limited company, the contract with the recruitment agency states or implies that:

1) You are not an employee of the recruitment agency involved or it's clients.
2) You can provide a replacement of yours during the contract, with a right of the client to entertain the replacement or not.
3) And you will be paying salary to such replacement person and NOT by the recruitment agency or it's clients.

Such contracts should be 'OK'.

Thanks,
Kaps