New Home Office guidance on refusing settlement over tax discrepancies

The Home Office has published the specific guidance on settlement applications by migrants who previously held Tier 1 (General) leave and who declared different sets of earnings to the Home Office and HMRC. The document must be read alongside the more general guidance published in October, which covers the refusal of applications where the person has made a false representation.

Underlying principles of the guidance

Caseworkers are to use the guidance in all applications where there were earning discrepancies, even if declared in previous applications.

It is relevant not only to people who over-declared their earnings in immigration applications, but also those who under-declared their earnings to HMRC (presumably to reduce their tax liability).

The guidance goes on to summarise some of the relevant points, including that:

• Submission of false earnings is enough to engage the use of paragraph 322(5) of the Immigration Rules
• The Home Office does not need to make enquiries with HMRC nor to follow HMRC’s position (for example where HMRC did not impose a tax penalty on the person)
• The Home Office will not usually accept a “mere assertion” from an applicant or their accountant that the discrepancy was a simple mistake without a full explanation of what the mistake was and how it arose
• There may be cases where, even if the applicant was dishonest in their declaration of income, they should be granted leave, for example because it is in the best interests of children involved

It is also worth underlining that the above approach and rules regarding refusing settlement applications over tax discrepancies is also applicable to other visa categories, and it does not limit itself to applications for Tier 1 (General) only.

All in all, it is clear from the guidance that the Home Office will be taking a more restrictive approach to applicants with tax discrepancies. Although anyone applying from within the UK is likely to be given an opportunity to explain themselves, the Home Office may still go on to refuse their application unless it receives a sound, tailored and well-evidenced explanation which goes beyond asserting a mistake by the applicant or their accountant.