Tier 1 General Extension – Make Sure to Get Yours

When the time comes it is very important to apply for a Tier 1 General Extension if you are one of those fortunate enough to have been granted a Tier 1 general Visa. The Tier 1 Generall Highly Skilled Migrant scheme is now closed to new applicants and if you fall short on the extension application there’s no chance of a fresh application.

Proving your earnings over the assessable 12 months (ie, unless affected by maternity leave, your choice of 12 consecutive months chosen from the 15 months prior to applying), is the biggest issue faced by visa holders when qualifying for a Tier 1 General extension, or for Tier 1 holders seeking Permanent Residence / Indefinite Leave to Remain (ILR) after their 5 years in the UK.

If you are in permanent employment with a salary above the required level, you will normally face no problems. However Contractors, especially those that have tax-optimised their pay structures, can find they are unable to prove enough income to get the points needed and therefore fall short at the last minute.

If you’re an IT Consultant, Engineer, Medical Professional, Actuary or Financial Services Professional on a Tier 1 General Visa find out now how we can help to ensure your visa extension application is successful!

Call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!

If you are not interested in the theory, and just want to know if you qualify, then you may want to use one of our quick guides below. There are 3 guides as the passmark and scoring changed a few times in essence the pass mark went up and scoring points became more difficult. All steps making things more restrictive before the scheme was closed to new applicants.

• Tier 1 General Extensions – Quick guide for initial cases on or after 19 Jul 2010
• Tier 1 General Extensions – Quick guide for initial cases 6 April 2010 – 18 Jul 2010
• Tier 1 General Extensions – Quick guide for initial cases on or before 5 April 2010

The reasons and history are set out below:

Points Required to extend a Tier 1 General Extension Visa

On 19th July 2010 the ‘pass mark’ required to get a Tier 1 (General) visa increased from 95 points to 100 points. The number of points you need to extend your visa will be the same as the number initially required when you applied.

• If you initially applied for your current Tier 1 (General) status before 19th July 2010, in order to extend you Tier 1 (General) visa, or Permanent Residence / Indefinite Leave to Remain (ILR) you will need 95 points
•  If you initially applied for your current Tier 1 (General) status on or after 19th July 2010, in order to extend you Tier 1 (General) visa, or Permanent Residence / Indefinite Leave to Remain (ILR) you will need 100 points

For this, the relevant date is the date of your initial application, not your date of approval. If you applied for your Tier 1 general visa on 18th July 2010, but were not approved until September 2010, then the ‘before 19th July 2010’ criteria apply and you only need 95 points rather than 100 points to extend your Tier 1 General status.

The other significant date for Tier 1 general extensions is 6th April 2010. The pass mark did not change on this day, but the way that points were awarded for earnings and qualifications changed significantly. In essence, on 6th April 2010 there was a change in emphasis from qualifications to earnings. Immediately before 6th April 2010, however much you earned, it was not possible to gain Tier 1 (General) status without at least a Bachelor’s degree (or equivalent). The rule changes on 6th April 2010 allowed high levels of earnings to make up for lack of a degree, but they also increased the earnings required to gain points. Before 6th April 2010 you could get a maximum of 45 points for previous earnings, and qualified for the full 45 points by earning £40,000. On 6th April 2010, it became possible to earn 80 points for previous earnings, but gaining those 80 points required earnings of £150,000, and even to gain 45 points required earnings of at least £75,000. This was a hugely significant change. If Wikipedia’s entry on UK income distribution is to be believed (http://en.wikipedia.org/wiki/Income_in_the_United_Kingdom), the top 10% of households have an income of £40,000 or more, but only the top 1% of households have an income of £75,000 or more, so gaining 45 points for earnings became ten times as difficult!

Although the Tier 1 General scheme is theoretically points based and with a pass mark of 95 or 100, it is more reasonable to think of the scheme as having 3 areas:

General Attributes: This is a truly points based area of the scheme, as it is possible to make up for weaknesses in some areas by scoring highly in other areas. The pass mark for general attributes is 75 points for those whose initial status was applied for before 19th July 2010, and 80 points for those whose initial status was applied for on or after 19th July 2010

English Language: Although notionally 10 points can be earned in this area, if you don’t gain those 10 points, however many points you score for other areas, you can’t qualify for a Tier 1 (General) visa, so this is really a pass/fail ‘check box’ which happens to have an arbitrary 10 points attributed to it. The good news for those extending an existing Tier 1 (General) visa is that you will have had to prove you qualified in this area when you were granted your initial Tier 1 (General) visa approval, and so should get the points without further proof when applying to extend.

Maintenance funds: As with the English Language requirement, this is actually a pass/fail test with a notional 10 points attributed to it. Unlike the English Language requirement, you will need to ensure that you re-qualify.

Points for General Attributes (age, qualifications, earnings, UK experience)

Points for Age (Maximum 20 Points Available)

While in most other areas changes have been to make the Tier 1 (General) Highly Skilled Migrant visa scheme more restrictive, in the area of age, the scheme has become less focussed on youth. Before 6th April 2010, you needed to be under 28 to gain the maximum 20 points for age, and got no points at all if you were over 31. On 6th April 2010 the maximum 20 points became available for those under 30, and at least 5 points became available to those up to 39.

When applying for a Tier 1 extension, you should be able to gain the same number of points for age that you gained initially. As the initial application will have been 2 or 3 years ago, don’t worry about the fact you are now 2-3 years older.

For the summary table below, the relevant age is the age you were at the time of applying for the Tier 1 General visa initially.

Points for Qualifications (Maximum 45 – 50 Points Available)

The Tier 1 General and earlier Highly Skilled Migrant programme visa schemes have seen several changes to the way that Qualifications were treated. Initially, Masters Degrees commanded a significant premium relative to Bachelor’s degrees, but the difference was soon reduced to a mere 5 points.

In more recent times, the only change was on 6th April 2010, when the points available for a PhD/DPhil or equivalent were cut from 50 to 45

If you have more than one qualification, you will gain points for only one of them (obviously the most senior if they are not at the same level).

Foreign qualifications must be equivalent to a UK Bachelor’s, Master’s or PhD qualifications in order to qualify. Overseas Qualifications are validated by UK NARIC.

The original Certificates and any relevant NARIC validation should have been provided in support of the initial application, so they will not usually need to be re-submitted .

Points for Earnings (Maximum 45 – 80 Points Available)

The area of awarding points for earnings changed slightly on 31st March 2009 when the minimum threshold of earnings to score any points at all increased from £16,000 pa to £20,000pa, and for more significantly on 6th April 2010 when

1. The total number of points that could be scored for earnings increased from 45 points to 80 points, thus allowing high-earning non-graduates to qualify, and
2. The earnings required to gain a given number of points increased significantly. For example, before 6th April 2010 you could gain 45 points for earnings of £40,000pa (ie a single person’s earnings putting them in the top 10% of UK households), on and after 6th April 2010, gaining the same 45 points required earnings of at least £75,000pa; although in cash terms this was less than a doubling of the required earnings, only the top 1% of UK households earn over £75,000 pa, so in practical terms the move from ‘Top 10% to top 1%’ actually made the hurdle 10 times more restrictive.

Because the changes of 6th April 2010 were so significant, we have provided two separate tables showing the criteria applying before and after that date.

Initial Applications made before the 6th April 2010

Initial Applications made after the 6th April 2010

If you earn enough to claim the needed points via PAYE salary earnings, you should not have too many complications. Gaining points for your earnings can be more complicated for contractors. With PAYE salary & bonus earnings, it is clear cut, but UKBA have more than once changed their treatment of other types of earnings such as dividends paid by a personal service company, and Allowances paid to employees.

Particularly for those whose initial applications were made on or after 6th April 2010, and who thus usually need to show much higher earnings than those who initially applied before 6th April 2010, the treatment of expenses can make the difference between success and failure, especially for those on expat packages which including significant accommodation, schooling, and car allowances. Such allowances may be included in your earnings in some circumstances but by default most tax-optimised allowance structures will not.

Pension contributions can be structured so that they are part of your qualifying earnings, but the default treatment eg where an employer makes pension contributions on your behalf to a company scheme, is that they will not be included.

By working with experts who understand both visas and contracting, you can ensure that your tax planning decisions are taken in the light of your needs to prove earnings for any visa extension applications, and so ensure the smoothest possible path along the usual steps of Tier 1 extension, then permanent Residence (ILR) and finally, if you so desire, eventual UK nationality and passport.

Particularly for contractors, it is best to contact us and put things in place long in advance of making an application, and ideally in advance of the 12 month qualifying period during which your earnings will be assessed. The ideal time to talk to us is two or more years in advance of making the application. This can allow for the restructuring of allowances / expenses in ways that do not result in permanent tax losses, and for insurance against gaps in your contracting.

If, we have not been able to put in place advance insurance, and for example due to a career disaster, you are going to fall short of the required earnings during your qualifying period, then all is not necessarily lost. You may well be able to ensure UK continuity by getting an employer-sponsored Tier 2 visa. This gives you far less freedom than Tier 1, but can be preferable to leaving the UK, particularly of after your career blip things are now looking positive.

Our partners offer solutions that work particularly well if you are a contractor, but even if you are not, contact us and we can look at the options. Our OISC registered partners can help you with visa extension applications, and can help an employer obtain a Tier 2 sponsorship licence and then sponsor you directly of that is needed.

To make the right plans in this area, call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!

To validate the Previous Earnings requirement you need to show a consecutive 12 month period of earnings any time in the 15 months immediately prior to the application. The UK Border Agency assess earnings on the basis of gross salary before tax, therefore reimbursed expenses are not considered a qualifying form of income.

Applicants should show stamped and signed payslips together with an employment letter to confirm earnings and payments in the period.

UK Experience (Maximum 5 Points Available)

Unless you are a particularly young person with a PhD, the earnings you will need to qualify will, if gained in the UK, usually allow you to also claim an extra 5 points for UK experience.

As with most other general attributes categories, the rules in this area changed on 6th April 2010, but the change has had an adverse impact on very few people as the threshold is low enough that most qualify.

The only cases where people may fail to gain these points, but still be eligible for extension, are where they have ended up taking a job or contract abroad. Such overseas employment does not disqualify you from extending your Tier 1 general highly skilled migrant visa, BUT it can have a significant impact on eventual eligibility for UK permanent Residence / Indefinite Leave to Remain (ILR). If you are planning to spend time abroad, it can be very helpful to get advice in advance. The way that your employment is structured, and your pattern of trips back to the UK (if any) can have significant implications for your long term eligibility for UK permanent Residence / Indefinite Leave to Remain (ILR).

To make the right plans in this area, call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!

Mandatory English Language Requirement (10 Points Required)

Although notionally 10 points can be earned in this area, if you don’t gain those 10 points, however many points you score for other areas, you can’t qualify for a Tier 1 (General) visa, so this is really a pass/fail ‘check box’ which happens to have an arbitrary 10 points attributed to it. The good news for those extending an existing Tier 1 (General) visa is that you will have had to prove you qualified in this area when you were granted your initial Tier 1 (General) visa approval, and so should get the points without further proof when applying to extend, and for those few still on the old Highly Skilled Migrant Visa under the Immigration Rules that came into force on the 5th December 2006, the English Language Requirement is deemed to be met automatically.

Mandatory Maintenance Requirement (10 Points Required)

As with the English Language requirement, this is actually a pass/fail test with a notional 10 points attributed to it. Unlike the English Language requirement, you will need to ensure that you re-qualify.

The logic behind this area is sound – ie that if you are to be admitted or extended as a Highly Skilled migrant, you should have some cash reserves so that you can support yourself and your family and can ride out eg a brief period of unemployment without having to rely on public funds. However, the strict requirement that you must have had the required balance in your account for 90 days can trip up people whose underlying position is fundamentally sound, but whose standing orders / salary receipts have been mis-timed by a day or two. Such mis-timings can cause an application to fail. This is just another reason for calling Commonwealth Contractors now on 0330 390 9021 or Submitting your Details so that the best possible advance plans can be made. If you lay the foundations suitably in advance, you will not be tripped up!

The reason for the 90 day requirement is, particularly for those initially applying from abroad (which no longer applies) to avoid people without money just borrowing cash from a loan shark for a few days, putting it into their bank, getting a statement, and then claiming that they have enough money when in actual fact as soon as the visa is approved they will withdraw the cash to repay the loan shark.

The initial maintenance requirement for those coming to the UK was set at £2,800, plus £1,600 per dependant but for extension applications, as you should already be settled and in employment / business in the UK for 12= months, the requirement is much lower: £800 for the main applicant plus £533 per dependant. These funds MUST have been in your bank account for every single day of the 90 days immediately prior to the application. You can use funds held in non-UK bank accounts; funds not in sterling may be converted using OANDA.

Find out More

To find out more about our solutions and discuss applying for a Tier 1 General visa extension call Commonwealth Contractors now on 0330 390 9021 or Submit your Details and we will get right back to you!