Tier 1 (General) - UKBA Questions

[samira_uk]

The starting point for taxable profit is the profit shown in accounts drawn up in accordance with UK Generally Accepted Accounting practice. That figure may then need to be adjusted to take into account specific tax reliefs and adjustments provided for by statute and case law.

And that's the difference between taxable profit and accounting profit. You work out accounting profit first and then you do adjustments to work out your taxable profit. There is a difference between the two figures.

If you have a Tier 1 visa and you've declared little or no profit to UKBA in order to obtain the visa, then something big is wrong. It would be fairly easy to spot the people cheating the system as the difference between accounting and taxable profit even out over the years.

The first part is completely acceptable but tax adjustment does not mean that you should declare cash profit and it is something different.

About the second part I did not understand. Why should someone declare no profit to UKBA to get visa? On the contrary, you should declare high amount of profit to UKBA to get your visa!

[mulderpf]

HMRC says about Self-Employed Accounting:

You or your accountant can, if you wish, use these records to create a profit and loss account. It shows the sales income you've received and the expenses you've paid, and what profit/loss you've actually made. The more detailed records you keep, the easier it will be to answer any questions that HMRC have about your tax return.

UKBA is also following above standards. So HMRC have told you firmly that SALES INCOME RECEIVED AND EXPENSES YOU HAVE PAID. They haven't told you to accrue your sales invoices which you haven't received the money. So any future receipts/payment which hasn't received or paid. How you can declare the loss?

Aware!

Where did you find this. It is against all Accounting principles.

Refer to this link:

http://www.hmrc.gov.uk/manuals/tcmanual/tcm0118180.htm

and this sentence:
Accounts should be drawn up on an accrual basis not on a cash basis. It isn’t simply a matter of cash received less cash spent.

http://www.hmrc.gov.uk/sa/rec-keep-self-emp.htm#1

Check this one...

Ok. then what about my link? HMRC is telling two different things?

No they're not - the links are for two different purposes. The link to self assessment is about what records to keep to do some basic accounting, NOT how to calculate taxable profit. Your links explains how to calculate profits.

[alok_singh]

I believe the following.

UKBA and IO can to revoke the Visa and they full right to do this.

Tax evasion is crime this is what big companies do by opening office in Cyprus but they permanent lawers and tax consultant.

in simple term is the profit was shown in application then pay the tax and be clear on this.

how to interpret the taxation law keep this for the time when ILR is sorted.

[madnan24]

Hello All,

I heard now a days UKBA grilling good Tier 1 (General) returnees at Airports , asking questions about how Tier 1 (General) got their status, and questions about tax etc.

Does anyone have any recent experience at airport might want to share ?

Regards

Hello All and ABZ ..

I believe ABZ asked above question and our thread is going somewhere else.

I have recently visit Saudi Arab and Pakistan and my a lot of friend visited in few months. so regarding above question, Would like to share question and with IO.

No -1 --> Confident
No -2 --> Knowledge regarding your Tier 1 ( How did you get, if you opened company, how much did you pay tax, and your Accountant details and some clients phone numbers ).

if you did not open any company when you got your Tier 1 or extension so it will be easy for you.

Example of the Self-Employed : IO can ask you following question
how long did you stay?
what are you doing?
what service do you provide?
do you know your accountant details? please tell me your accountant phone number? place and name?
how many clients have you got?
please give some clients names?
how much tax did you pay that year and this year how much tax did you pay?

Those above question they asked with my friend but he is business man so he knows all above question. please if you dont know how much tax and what is your accountant details and other stuff so you should know. Please remember Home office can ask you any question and they can refuse your visa any time. Actually they know they some ppl are doing wrong thing and opened company and they dont pay tax.

Example of Salary Employee :

What are you doing?
where do you work?
are you working as a?

thank you sir, here is your passport and card, Have a good day

[abz]

Hello All,

I heard now a days UKBA grilling good Tier 1 (General) returnees at Airports , asking questions about how Tier 1 (General) got their status, and questions about tax etc.

Does anyone have any recent experience at airport might want to share ?

Regards

Hello All and ABZ ..

I believe ABZ asked above question and our thread is going somewhere else.

I have recently visit Saudi Arab and Pakistan and my a lot of friend visited in few months. so regarding above question, Would like to share question and with IO.

No -1 --> Confident
No -2 --> Knowledge regarding your Tier 1 ( How did you get, if you opened company, how much did you pay tax, and your Accountant details and some clients phone numbers ).

if you did not open any company when you got your Tier 1 or extension so it will be easy for you.

Example of the Self-Employed : IO can ask you following question
how long did you stay?
what are you doing?
what service do you provide?
do you know your accountant details? please tell me your accountant phone number? place and name?
how many clients have you got?
please give some clients names?
how much tax did you pay that year and this year how much tax did you pay?

Those above question they asked with my friend but he is business man so he knows all above question. please if you dont know how much tax and what is your accountant details and other stuff so you should know. Please remember Home office can ask you any question and they can refuse your visa any time. Actually they know they some ppl are doing wrong thing and opened company and they dont pay tax.

Example of Salary Employee :

What are you doing?
where do you work?
are you working as a?

thank you sir, here is your passport and card, Have a good day

Thanks for such a precise answer, but there is a thing, when i applied for my Tier 1, it was part self employed and part employed, but soon after the application , i got a better job, so i switched completely to employment which covers my income, now if they ask me my clients name and numbers at this stage, how would i be able to give them details from 2 years back ?

Rest i agree with everything you said.

[mulderpf]

Hello All,

I heard now a days UKBA grilling good Tier 1 (General) returnees at Airports , asking questions about how Tier 1 (General) got their status, and questions about tax etc.

Does anyone have any recent experience at airport might want to share ?

Regards

Hello All and ABZ ..

I believe ABZ asked above question and our thread is going somewhere else.

I have recently visit Saudi Arab and Pakistan and my a lot of friend visited in few months. so regarding above question, Would like to share question and with IO.

No -1 --> Confident
No -2 --> Knowledge regarding your Tier 1 ( How did you get, if you opened company, how much did you pay tax, and your Accountant details and some clients phone numbers ).

if you did not open any company when you got your Tier 1 or extension so it will be easy for you.

Example of the Self-Employed : IO can ask you following question
how long did you stay?
what are you doing?
what service do you provide?
do you know your accountant details? please tell me your accountant phone number? place and name?
how many clients have you got?
please give some clients names?
how much tax did you pay that year and this year how much tax did you pay?

Those above question they asked with my friend but he is business man so he knows all above question. please if you dont know how much tax and what is your accountant details and other stuff so you should know. Please remember Home office can ask you any question and they can refuse your visa any time. Actually they know they some ppl are doing wrong thing and opened company and they dont pay tax.

Example of Salary Employee :

What are you doing?
where do you work?
are you working as a?

thank you sir, here is your passport and card, Have a good day

Actually, that is true. I suppose it's the "line of questioning" that seems like a grilling. I have been asked where I work and what I do - but I saw it as general chit-chat from their "conversation guide of questions to ask while you are scanning a passport" rather than a serious grilling.

[cs95tdg]

Hello All,

I heard now a days UKBA grilling good Tier 1 (General) returnees at Airports , asking questions about how Tier 1 (General) got their status, and questions about tax etc.

Does anyone have any recent experience at airport might want to share ?

Regards

Hello All and ABZ ..

I believe ABZ asked above question and our thread is going somewhere else.

I have recently visit Saudi Arab and Pakistan and my a lot of friend visited in few months. so regarding above question, Would like to share question and with IO.

No -1 --> Confident
No -2 --> Knowledge regarding your Tier 1 ( How did you get, if you opened company, how much did you pay tax, and your Accountant details and some clients phone numbers ).

if you did not open any company when you got your Tier 1 or extension so it will be easy for you.

Example of the Self-Employed : IO can ask you following question
how long did you stay?
what are you doing?
what service do you provide?
do you know your accountant details? please tell me your accountant phone number? place and name?
how many clients have you got?
please give some clients names?
how much tax did you pay that year and this year how much tax did you pay?

Those above question they asked with my friend but he is business man so he knows all above question. please if you dont know how much tax and what is your accountant details and other stuff so you should know. Please remember Home office can ask you any question and they can refuse your visa any time. Actually they know they some ppl are doing wrong thing and opened company and they dont pay tax.

Example of Salary Employee :

What are you doing?
where do you work?
are you working as a?

thank you sir, here is your passport and card, Have a good day

Actually, that is true. I suppose it's the "line of questioning" that seems like a grilling. I have been asked where I work and what I do - but I saw it as general chit-chat from their "conversation guide of questions to ask while you are scanning a passport" rather than a serious grilling.

An interesting discussion here. Thinking back, I too have been asked similar questions in where I work and what I do, but as mulderpf has stated, never took this to be a grilling. To me it was just a general conversation which I did not find to be unusual to occur when entering the UK.

[mulderpf]

Maybe if you had something to hide, you'd see it as a grilling

[brajen]

max2k12 it is not as easy as you think.

In commercial accounting we dont have cash profit and what is reflected in p/l statement is accrual profit. If you check p/l statement of big companies billions of pounds are not cash profit and actually accrual profits. It does not mean that you can make up profits because you should have very clear evidence and documents to prove your income. Why UKBA asked that all accounts should be verified by an accredited accountant? Because they will not risk their profession for one client. They check all of your contract and your accounting assumption and then verify the accounts. For example, there is rule in accounting that you should have at least 90-95% sure about an income to consider it as an income in your accounts. You cannot claim an income with probability of 50% or based on your guess. It is the job of the certified accountant to check them and be sure that the claimed income is real and not made up.


Then, there will be two possibilities:
1-You were genuinely claimed an income with 95% chance but that 5% works and that income cannot be realized. Then, your profit will be reduced. It is something happening to all businesses around the world and even the biggest ones. You did not make any mistake. You have to adjust your profit (have you heard of EPS adjustment by public companies) and then reflect it in your accounts. If it is after your visa approval I dont see it as a deception as you obeyed all the accounting rules correctly.

2-You are filling the tax return in April but assume you are applying in Jan or Dec. Then, your account will be produced by accountant until that time and they are true and genuine. But after visa approval you will make loss and in your tax return you are declaring something different. It is not wrong again as you did not lie and it is the nature of the business. Again you should have sound evidences of your profit and loss to show to accountant, UKBA and HMRC.

To be honest, UKBA does not have the proper skills in accounting matters and therefore I agree that above scenarios may lead to much more verification and lengthy process. I know that many used this way to deceive and unfortunately it was one of the reason they closed Tier 1 General. To be safer, maybe you should only claim the cashed part of the profit which can be verified easily by bank statement and explain in a cover letter that you have not filed the tax return and it is clear that the amount will be different.

Samira. You're perfectly right. Non Professional Accountant, Please avoid comments if you don't know the technical skills in the area. It's wasting your time as well as mislead others.

Preparation of Accounts are bound by Accounting standards like FRS,IAS etc. Samira you have mostly cleared most of the doubts. Thanks for your time.

[madnan24]

Hello All,

I heard now a days UKBA grilling good Tier 1 (General) returnees at Airports , asking questions about how Tier 1 (General) got their status, and questions about tax etc.

Does anyone have any recent experience at airport might want to share ?

Regards

Hello All and ABZ ..

I believe ABZ asked above question and our thread is going somewhere else.

I have recently visit Saudi Arab and Pakistan and my a lot of friend visited in few months. so regarding above question, Would like to share question and with IO.

No -1 --> Confident
No -2 --> Knowledge regarding your Tier 1 ( How did you get, if you opened company, how much did you pay tax, and your Accountant details and some clients phone numbers ).

if you did not open any company when you got your Tier 1 or extension so it will be easy for you.

Example of the Self-Employed : IO can ask you following question
how long did you stay?
what are you doing?
what service do you provide?
do you know your accountant details? please tell me your accountant phone number? place and name?
how many clients have you got?
please give some clients names?
how much tax did you pay that year and this year how much tax did you pay?

Those above question they asked with my friend but he is business man so he knows all above question. please if you dont know how much tax and what is your accountant details and other stuff so you should know. Please remember Home office can ask you any question and they can refuse your visa any time. Actually they know they some ppl are doing wrong thing and opened company and they dont pay tax.

Example of Salary Employee :

What are you doing?
where do you work?
are you working as a?

thank you sir, here is your passport and card, Have a good day

Thanks for such a precise answer, but there is a thing, when i applied for my Tier 1, it was part self employed and part employed, but soon after the application , i got a better job, so i switched completely to employment which covers my income, now if they ask me my clients name and numbers at this stage, how would i be able to give them details from 2 years back ?

Rest i agree with everything you said.

I think they will ask you regarding current job but if that time you provided services so you should know some your clients name and contact number and accountant details right ? you should have all data and you can check via your online banking, boss there is a lot of way to keep record if you were real service provider . Hope it helps , thanks