What Effect Will Covid-19 Have on My Tier 1 Entrepreneur Visa Extension?

What Effect Will Covid-19 Have on My Tier 1 Entrepreneur Visa Extension?

If you have to leave to remain in the UK on the Tier 1 Entrepreneur Visa, ensuring that renewal requirements are met is imperative if your ultimate ambition is to apply for Indefinite Leave to Remain (ILR) and British Settlement.

The criteria for gaining an extension on the Tier 1 Entrepreneur route is as follows.  You must show:

  • your investment funds of £50,000 or £200,000 (depending on the level of funds needed in the initial application) have been invested by you or on your behalf into one or more UK commercial entities
  • within six months of entering the country, you registered as a director of a new or existing company or registered as self-employed with HMRC
  • your business has created at least two full-time positions for settled persons in the UK and these positions must have existed for 12 months or more prior to applying for the extension
  • the English language requirements are met
  • you have a minimum of £945 in personal maintenance funds plus £630 for each dependent available

The Coronavirus pandemic has resulted in around 70&#x o;f UK companies furloughing some of their staff.  The big question for those wanting to extend their entrepreneur visa is whether the furloughing of staff or the delay in being able to recruit talent will adversely affect their application.

What is the furlough scheme?

The British government introduced its furlough scheme (also known as the Coronavirus Job Retention Scheme (CJRS)) in March 2020.  Its aim was to provide state aid to employers for the payment of wages to stave off mass redundancies.  Organisations that cannot afford to keep paying their workers can furlough them.  This means the government will pay 80 &#x o;f their wages.  If you furlough a worker, they cannot work for you; however, they may be able to take on other work or study.

Related Article: Read also “Home Office Guidance for Employers Regarding Furloughing Tier 2 Sponsored Workers” here.

Can I still extend my Tier 1 Entrepreneur Visa if I have to furlough my staff?

On 3 April, the Home Office released guidance concerning Tier 1 Entrepreneur migrants whose businesses have been interrupted by Coronavirus.  It stated that entrepreneur visa holders can furlough their employees; however, the time spent in furlough will not count towards the 12-month job creation requirement.

A further announcement stated that Tier 1 Entrepreneur Visa holders “no longer need to employ at least two people for 12 consecutive months each. The 12-month period [they] are required to employ someone for can be made up of multiple employees across different months”. 

Finally, if you are unable to meet the creation of two full-time position requirements because of Covid-19, your visa can be extended to allow you to create and fill the positions needed to be eligible for an extension.

What evidence will UK Visas and Immigration (UKVI) want to see when I apply for an extension?

You need to take the extension process as seriously as applying for the initial entrepreneur visa.  UKVI will want to see a wealth of documentary evidence that you have spent the last three years meeting the requirements for an extension. 

Proof that you have met the prerequisites include:

  • A set of audited accounts that show that you have invested your £200,000 in an existing company of which you became a director or a start-up venture.  If you invested by way of share capital, the business accounts must show the shareholders, the amount and value of the shares (on the date of purchase) in your name as it appears on your extension application.  Any money invested in commercial property will be removed from the calculations.
  • The caseworker examining your extension application must be satisfied that you pass the Genuine Entrepreneur Test.  This includes being confident that you have started or taken over or become a director of a genuine UK business and have genuinely operated that business. 
  • As part of the Genuine Entrepreneur Test, you will need to submit a business plan.  It is imperative to write a fresh business plan and not use the same plan submitted to potential investors.  Your Genuine Entrepreneur Visa business plan needs to detail your strategy for meeting the visa criteria, such as job creation and the genuine running of a business.  Although it is important to include elements such as financial forecasts and profit and turnover projections, remember that the caseworker assessing your application is likely to have little knowledge of your industry.  Therefore, you need to clearly illustrate how you plan to meet the immigration criteria as well as build a scalable, genuine business.

Can I qualify for fast-track Indefinite Leave to Remain?

The existing Tier 1 Entrepreneur Visa provides a ‘fast-track’ route for settlement.  You can apply for ILR in three years rather than five if:

  • you have created the equivalent of at least ten full-time jobs which have existed for at least a minimum of 12 months prior to the last grant of leave, or
  • you have established a new start-up or start-ups with a gross turnover of at least £5 million during your three-year period of leave, or
  • you have taken over or invested in an existing UK business or businesses and your contribution has resulted in a net increase in gross turnover of £5 million during the three years you have been in the UK.

As at the time of writing, there was no government advice regarding whether any allowances would be made if the creation of jobs had been affected by Covid-19 in respect of fast-tracked ILR applications.

Final words

Making an application to extend your Tier 1 Entrepreneur Visa is a process that should be taken extremely seriously.  This is especially true in these uncertain times.  Investing in comprehensive legal advice from an immigration solicitor will significantly assist in having your application approved.

There are many questions that remain unanswered regarding the 12-month job creation requirement, both in regard to extending your visa and applying for fast-tracked ILR.  An immigration lawyer will have unique insight into UKVI updates and be able to advise you accordingly.

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