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Contracting on a Tier 1 Visa
Many Tier 1 Visa holders choose to work in the UK as Freelance Contractors due to higher pay rates, better retention rates and greater employment flexibility. However, due to the nature of the industry and the billing structures involved Tier 1 Visa holders often face challenges when it comes to extending the visa.At Commonwealth Contractors we specialise in bringing together highly skilled visa applications and contracting structures. This unique integration allows us to provide tailor made solutions specifically for Tier 1 Visa holders.
By using Commonwealth Contractors while contracting you will benefit from:
- Market leading retention rates
- Fully integrated Tier 1 Extension Representation (at additional cost)
- Visa Application Planning
- Expert Account Managers skilled in Immigration & Contracting Solutions
- European Contracting Solutions (Germany, Ireland, Belgium, Netherlands etc)
- Fully Stamped & Signed Payslips
- Employment Letters & References for the UK Border Agency
- Claimable Business Expenses:
- Accommodation
- Travel & Subsistence
- 2 Flights Home each year
- Visa Costs
- Computer Supplies
- Business Telecoms
- Memberships & Journals
- Postage & Stationary
- Regular Immigration Updates (e.g. Tier 1 Immigration Cap updates, Tier 1 Criteria Changes)
- Tier 2 Work Permit Sponsorship (for those encountering Tier 1 Extension Issues)
To find out more about our Contracting Solutions for Tier 1 General Visa holders call now on 0800 294 4388 or Submit your Details and we will get right back to you.
Offshore Billing Structures
All Contractors should avoid using Offshore Billing Structures such as those based in Jersey & the Isle of Mann. Scheme operators often talk up the compliance of such schemes however there is no justification whatsoever for billing UK contract income through an offshore vehicle and paying minimal amounts of tax. The HM Revenue & Customs take a very dim view of such schemes and will chase down scheme operators and clients. Having to pay 3 or 4 years in backdated tax and penalties can often spell financial ruin for many.In terms of Tier 1 Visa extensions it is often very difficult (if not impossible) to prove previous earnings due to the fact that income is normally received in the form of loans or via some other method. If you are unable to prove previous earnings you will be unable to qualify for a Tier 1 extension.
Traditional 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, contract administration etc. Many 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 Contractors find it difficult to prove income received via a traditional Umbrella Company due to inadequate payment documentation (e.g. online payslips). Many also find 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 due to the income structuring involved. Traditionally, a Contractor will open his / her own Limited Company in order to gain a tax advantage which is achieved by setting an artificially low salary (normally £12k pa) 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.
