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Self employed experience points

Archived UK Tier 1 (General) points system forum. This route no longer exists.

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iskander
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Joined: Fri Mar 03, 2006 7:12 pm

Self employed experience points

Post by iskander » Sun Mar 19, 2006 2:31 pm

Hello.
I need some help on how to present my case – it is a straightforward one, though difficult to document. I am a senior software developer and for the last 4 years I worked as self employed (my own company, I didn’t employ myself but rather took the profit because the tax is so much smaller). I have read the HSMP caseworker guidance but I don’t understand how am I going to prove that the job I did was a graduate level job? (and by all means it was)
Also, due to the nature of the process (taking the profit from the company’s earnings) this happens once in a fiscal year. Do you see any difficulty regarding the income points because of this?
It’s not like I’m short on points, but I want to make sure I prove them right because I already have some job offers and I’d like the process to go as fast as possible.
My current situation looks like this:
5 points for being under 28
15 points for your qualification
35 points for work experience
35 points for earning power
10 points for spouse's or partner's achievements
100 total points

On another note, I’ve searched but I couldn’t find this information: if I apply for HSMP and the process is not fast enough and in order to secure one of the jobs I am offered I take the alternative of a work permit (after my HSMP submittal), does this affect my HSMP application in any way?

John
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Posts: 12320
Joined: Wed Nov 10, 2004 2:54 pm
Location: Birmingham, England
United Kingdom

Post by John » Sun Mar 19, 2006 4:25 pm

I worked as self employed (my own company, I didn’t employ myself but rather took the profit because the tax is so much smaller). I have read the HSMP caseworker guidance but I don’t understand how am I going to prove that the job I did was a graduate level job? (and by all means it was)
I see it this way. You are not self-employed. You are employed by a company that you happen to own.

Who else is involved with the company? You are a director and shareholder? Are there any other directors? Who is the company secretary? Surely there is someone else at the company who can write the required document for you?
John

iskander
Newly Registered
Posts: 23
Joined: Fri Mar 03, 2006 7:12 pm

Post by iskander » Sun Mar 19, 2006 5:41 pm

No, I am afraid I'm not. The thing is, if I would employ myself, I'd have to pay about 50% of the earnings to he government. Instead, I am just using the company to work and invoice and I take the money out as profit (dividends) which cuts the taxes down to about 12%.
Because of the Romanian law, in order to exist as a limited company you must have at least one employee, other than yourself, so in order to meet this criteria I've hired a junior (still student) that I'm training and he's helping me out with things. However, I am the owner, manager, the main worker, about everything in this company ... so I can call it either self employed or contractor. The only other person that is somehow involved is my accountant whom runs his own company (pretty much like me) and deals with all my accounting and legal issues (based on a contract).
Quoting from HSMP manual (work experience):
With self employed applications you need to gather a combination of evidence
and assess the overall picture of:
(i) Can you establish that the applicant is the owner or a partner?
(ii) Does the evidence show that the company was trading during the
period claimed?
(iii) Does the evidence demonstrate the applicant’s role is an appropriate
level to award points?
I am a bit concerned about point 3 - how am I going to prove that?

Regarding the past earnings it shouldn't be a problem because they are obviously not a profit based on investments as my "company" did not invest in anything at all (but my computers) and all my invoices are for "development services".

John
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Posts: 12320
Joined: Wed Nov 10, 2004 2:54 pm
Location: Birmingham, England
United Kingdom

Post by John » Sun Mar 19, 2006 7:34 pm

Ah right, I was assuming you have a UK company. If it was a UK company then it would be impossible for the sole Director also to be Company Secretary, so it is always the case that there are at least two persons involved with a UK company.

But Romanian company law? Is it the same? You are the sole shareholder and sole Director? Is there a Company Secretary? Or do you just have that junior employee?
John

iskander
Newly Registered
Posts: 23
Joined: Fri Mar 03, 2006 7:12 pm

Post by iskander » Sun Mar 19, 2006 7:47 pm

John wrote:But Romanian company law? Is it the same? You are the sole shareholder and sole Director? Is there a Company Secretary? Or do you just have that junior employee?
Usually the Romanian law is more twisted and more bureaucratic than the British one. You cannot have an active company unless you have at least one employee that is NOT the owner (they are doing this because there is no law support in Romania for what would make a contractor in UK, and they are trying to avoid the "one man company" situation as they feel that would be just a way to avoid all the taxes you would pay as an employee. Even so, it is still worth it as it is a win-win situation – the junior gets to learn something and makes a small but honest earning and builds up his resume and this makes it a common practice around here).
My problem is that I cannot see how is it best to describe and document the situation. I do have all the company’s documents, all the accounting and bank statements, invoices and client contracts, and further more I have a very good recommendation from my last customer which happens to be a big British company. I do hope these will do the job, but I still don’t find my words, so I was hoping you could give me some tips (and a warning if you feel these are not enough).
Also, what do you think about the second part of my original post? I can’t find anything about this on internet (esp. www.workingintheuk.gov.uk). Do you think there would be a problem if I would agree to a work permit while my HSMP application is being processed?

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