Holding Investment Funds for a Tier 1 (Entrepreneur) application
The vast majority of people applying for Entry Clearance to enter the Tier 1 (Entrepreneur) category apply on the basis of having access to £200,000 which is available to them to invest in a new or established UK business. There are many different ways in which the Home Office will accept evidence of these funds being available to an Applicant and there is different evidence that is required, depending on where the funds are held. For any entrepreneur, it is therefore important to assess their situation at an early stage to check whether they will be able to meet the evidential requirements for their particular situation.
Some of the most common difficulties are where the money is held by a third party or held outside of the UK, even though both of these situations are accepted by the Home Office. In either of these circumstances, the Applicant must supply a letter from a bank confirming that the funds are available to the Applicant, and in the case of a bank which is based abroad, they must confirm that the money is freely transferable to the UK. There are a number of issues in obtaining these letters. First, that in many cases a bank in the UK or abroad is not willing to confirm the availability of funds to a person who is not the account holder. Second, that the bank will not confirm their regulator or the transferability of the funds to the UK.
Although the Immigration Rules have been amended to state that the letter must only confirm that the account holder has ‘informed the institution of the amount of money that the third party intends to make available, and that the institution is not aware of the third party having promised to make that money available to any other person,’ many banks are not willing to provide confirmation of this either because of internal bank policies, regulations in the country in which they are based, or for the practical reason that they have no central system for reporting that a client has advised a particular person in the branch what they intend to do with the money in their account.
Even when the money is held in the Applicant’s own name, many banks are not willing or not able to confirm that the funds can be freely transferred to the UK. This could be because there are money controls in force in the country in which they are based, or just because the individual bank is not able to give such a confirmation of information which may be outside of their control.
For this reason, many individuals who want to rely on third party funds, or funds held outside of the UK (or both) will encounter difficulties in getting the evidence that the Home Office require, even where the money is genuinely available to them.
In these circumstances there are a number of options that the intended applicant will have. These include:
- Apply anyway, relying on evidential flexibility and discretion
- Move the money to another account
- Move the money to another account holder
- Invest the funds into the business.
There are a number of reported decisions about evidential flexibility and the application to the bank letters, specifically where bank letters do not contain all of the specified information. See Iqbal v SSHD  EWCA Civ 169,  All ER (D) 54 (Mar); Fayyaz (Entrepreneurs: paragraph 41-SD(a)(i) – “provided to”  UKUT 296 (IAC); Durrani (Entrepreneurs: bank letters; evidential flexibility)  UKUT 295 (IAC); Akhter and another (paragraph 245AA: wrong format)  UKUT 00297 (IAC); R (on the application of Imran Idris) v The Secretary of State for the Home Department IJR  UKUT 00095 (IAC).
The Tribunal and Court of Appeal has consistently held that the requirements of the bank letters are lawful and it is not absurd that the Home Office would require the bank to confirm this information. However, the Court of Appeal in Iqbal (above) noted that there was no case in which evidence had been submitted that demonstrated that the details required were impossible to obtain.
Even if the caseworker were to exercise evidential flexibility, this only permits them to either request the letter with the required information, which we already know cannot be obtained, or to find the required information in other documents submitted by the Applicant. However, given that this is information that the Home Office want the bank to confirm, it is unlikely that the bank’s knowledge will be confirmed in other documents. Evidential Flexibility is therefore unlikely to be of much assistance.
Decision-makers in the Home Office do retain the power to waive or modify the requirements of the Immigration Rules in appropriate circumstances, however, this is a power which is rarely invoked.
Move the money to another account
If you find that the specific bank in which money is held is not willing to confirm the information required, this does not mean that all banks will be so reluctant. Sometimes different branches of the same bank appear to have more flexibility in the information that they will confirm. Where the problem relates to the policies of an individual bank, rather than countrywide regulations, moving the money within the same country to a different bank may be sufficient to solve the problem.
Where the money is already held by the intended applicant, moving the funds to the UK may also be of assistance. Where funds are held by an applicant already, moving them to an account in the UK can solve the evidential difficulties, where only a bank statement is required, rather than a bank letter. Individuals who are not in the UK and who do not already have a bank account may encounter difficulties in opening a UK based account and should speak to their bank manager about this possibility.
Move the money to another account holder
Where the bank will not confirm details of the funds held by a third party, then one of the easiest ways to resolve this is for the third party to move the funds to the Applicant’s own account. This eliminates the need for the bank to confirm this information. If the Applicant has not held the funds for 90 days prior to making the application, they may need to provide additional evidence of the transfer of funds.
Invest the funds into the business
The final option, is to invest the funds into the business prior to making the application. Not only does this assist in showing that you are a genuine entrepreneur who is serious about making their investment in the UK, but it also eliminates the need for the bank letters which can cause so much difficulty. A potential Entrepreneur will need to consider this option in detail before making the move of money. Not least to consider the strict evidential requirements in place for individuals who want to rely on funds that they have invested, including that they are a signatory of the UK bank account, that their investment is set out in the accounts, and also in the bank statements in the case of a Directors Loan.
Because of the length of time it can take to get the information necessary to decide on the best structure an place for your investment funds to be held, this should be one of the first things that a future Entrepreneur applicant should consider when planning their application. In the event that you find that you will not be able to meet the requirements on your intended basis, then consider moving your funds first, and only make an application which will not meet the requirements of the Immigration Rules if you have considered all other options first and can show a good reason why none of the other options will be appropriate.