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Paragraph 322(5): A Ground for Refusal

The issues faced by individuals who have received a refusal on the grounds of paragraph 322(5) of the Immigration Rules have been reported on widely in the media recently

Paragraph 322(5) of the Immigration Rules provides a discretionary ground for refusal based on:

“the undesirability of permitting the person concerned to remain in the United Kingdom in the light of his conduct (including convictions which do not fall within paragraph 322(1C), character or associations or the fact that he represents a threat to national security”

Why has paragraph 322(5) appeared in the news over the past few months?

Initially, it was intended for refusing applications for leave to remain on the basis that the Applicant had been involved in war crimes or was a threat to the national security of the UK. However, paragraph 322(5) of the Immigration Rules has recently been used to refuse applications due to issues with declaring HMRC tax.

Some of the recent media attention has involved circumstances in which an Applicant may have inflated their earnings to make it seem that they earn enough to meet the threshold or on the other hand, an Applicant may have reduced the amount of income that they earn, therefore declaring a smaller income to HMRC and as such, reducing their tax liability. This issue has mainly affected Tier 1 (General) applications for settlement, a route that closed on 6 April 2015.  Tier 1 (General) was aimed at highly skilled workers who did not need a sponsor to work in the UK. They could come to live and work in the UK on an employed or a self-employed basis.

Is it fair that paragraph 322(5) is being used to refuse applications on the basis of tax discrepancies?

The main criticism of the Home Office is that in these instances, they are applying the scope of paragraph 322(5) too broadly. The intention of paragraph 322(5) was not to refuse applications on the basis of small inconsistencies with HMRC tax records. For example, the current guidance clearly states that the case worker should look out for specific characteristics of a case:

“The main types of cases you need to consider for refusal under paragraph 322(5) or referral to other teams are those that involve criminality, a threat to national security, war crimes or travel bans … the key thing to consider is if there is reliable evidence to support a decision that the person’s behaviour calls into question their character and/or conduct and/or their associations to the extent that it is undesirable to allow them to enter or remain in the UK…”

Taking this into consideration and in combination with relevant case law, it indicates that paragraph 322(5) was not intended for use in cases where there are minimal tax discrepancies. For example, R (Agha) v Secretary of State for the Home Department (False Document) [2017] UKUT 00121, stipulates that small discrepancies, in this case a wrong date in a passport, do not necessarily reveal dishonesty.  At paragraph 35 the Upper Tribunal held:

“a wrong date in a passport does not necessarily arise due to an element of dishonesty … and therefore I find that it does not immediately of itself reveal dishonesty.”

What about its discretionary nature?

Paragraph 322(5) is an entirely discretionary ground for refusal. As such, the Home Office is not bound to enforce paragraph 322(5). Rather, it could use its discretionary power to allow an application, even if paragraph 332(5) is invoked. Again, the Home Office could be criticised for not doing so.

If HMRC has not taken action for the tax bill, then why should my application be refused?

Some may ask the above question when trying to understand why they have received a refusal. However, this isn’t an argument that can be relied on as this case clearly shows:

“HMRC has a discretion to decide how to proceed in cases of underpayment of tax, and in particular, whether to prosecute the offender or to recover the underpaid tax and penalties without commencing proceedings, pursuant to the provisions of the Taxes Management Act 1970. HMRC exercised its discretion in the applicant’s favour.

The respondent has a separate discretion under sub-paragraph 322(5). The exercise by HMRC of its discretion is not related to the exercise of the respondent’s sub-paragraph 322(5) discretion, nor is it probative of the matters which the respondent must decide thereunder. The respondent must make her own decision as to the applicant’s conduct and character, and whether to exercise discretion in his favour.” (para. 52-53)

What can we expect from the current review of cases refused under Paragraph 322(5)?

Sajid Javid confirmed that he has instructed the Minister of Immigration to conduct a review into cases where the Applicant had arrived under the Tier 1 General route and was then refused due to discrepancies with their HMRC records. Caroline Nokes, Minister of State for Immigration, said:

“As I confirmed to the Home Affairs Select Committee on 8 May, we will carry out a review of these cases to see how many showed clear evidence of deceit, and whether any were refused due to minor errors. So far there is insufficient evidence to suggest there is any systemic problem which may lead to wrongful removals for this group, but this is one area our review will check.”

In another debate, Caroline Nokes stated that:

“We give applicants the opportunity to explain, and we take their explanation and all available evidence into account. Any such cases must be signed off by a manager before they are refused. The review that I am carrying out is checking those safeguards to make sure that they have been followed correctly.”

It would appear that we can expect a thorough case-by case analysis of each case under review. However, the full extent and implications of the review remain to be seen.

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