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Contracting in the UK on a Tier 1 Visa
If you hold a Tier 1 (General) Visa you need to make sure that you qualify for your Tier 1 Extension & Permanent Residence. Using a Contractor Limited Company, Umbrella Company or Offshore Billing Structure may seriously damage your chances of securing an extension. At Commonwealth Contractors we have the perfect solution!
Tier 1 (General) Visas are initially approved for 3 years, after which time it’s possible to secure a 2 year extension (and continue working towards Permanent Residence) so long as you can completely re-qualify against the Tier 1 (General) criteria.
Traditionally Consultants either use a Contractor Limited Company or Umbrella Company to deal with contract billings. That’s fine if you’re a UK National who doesn’t have to worry about a future Immigration application. However, if you’re on a Tier 1 visa you may find it impossible to qualify due to (among other things); Inadequate Payment Documentation, Unsuitable Income Structuring, Inadmissible Business Expenses.
How can Commonwealth Contractors help?
At Commonwealth Contractors we partner with OISC registered Private Immigration Firms & Tier 2 Licensed Healthcare & IT Consultancies. Our unique position allows us to deal with:- Tier 1 (General) Visa Applications & Extensions
- UK Consulting Solutions for those on Tier 1 Visas
- European Solutions for Germany, Ireland, Belgium & the Netherlands
For more information call now on 0800 294 4388 or Submit your Details & we will get back to you.
Agency Recommendations
Consultants new to the UK are often guided by the recommendations of their Agents when deciding upon how to structure project billings (Umbrella Company, Limited Company etc). Although Agents have good intentions the majority are unaware of the effects consulting can have on a Tier 1 extension or Permanent Residence application. It’s for this reason that you should seek professional advice on your specific situation.Please be aware that many Agents refer to the organisation that will put the most money ‘back in your pocket’ as they believe it is the best way to keep you happy. You may be happy for a short period of time but if you are unable to secure a Tier 1 extension due to, for example, using an offshore billing structure you may find that taking the ‘quick wins’ is not the best option.
Umbrella Companies
An Umbrella Company is a ready made Invoicing vehicle that generally charges a basic flat rate fee for taking care of payroll processes, expense processing, contact administration etc. On the whole Umbrella Companies automate as many processes as possible & offer cut down services in order to maximise revenues.If you are a Tier 1 (General) visa holder you should be aware that many Consultants find it difficult to prove income received under this structure due to inadequate payment documentation (e.g. online payslips). Many have also found it difficult to gain detailed employment references, which are especially important where the UK Border Agency has questions regarding previous earnings.
Contractor Limited Companies
Contractor Limited Companies are problematic for consultants on Tier 1 General visas due to the income structuring involved. Traditionally, a consultant will open his / her own Limited Company in order to gain a tax advantage which is achieved by setting an artificially low salary (normally around £12k) and taking the remainder of income in the form of Dividends (which are not subject to National Insurance contributions).This type of structuring is fine if you are outside the scope of IR35 and do not have to worry about a future Immigration application. However, when your Tier 1 extension depends upon proving income the dividend element can cause issues.
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