# FLR(M) - Financial Requirement question



## Brilafruz

Hello,

If anyone is able to help us with a question relating to the financial requirement section of the FLR(M) application we would be hugely grateful. After seeking the solicitors' advice we have disappointingly been left with no added knowledge to that we have acquired ourselves! 

Background:
I am currently resident in the UK on a Tier 1 Post-study work visa which expires in 3 weeks. My partner (who is British) and I registered our marriage in July 2012. We have a premium-service appointment booked in for less than 2 weeks away. All of our documents seem to be in order but we are trying to get clarity on how we are able to combine our incomes.


Financial requirement:
My partner has been completing his PhD studies during the last year but at the same time was being paid £100 per week on a retainer basis by his father's family business. Following completion of a industrial qualification he has recently taken up full-time employment within the company and his gross annual salary at the point of application will be approx £22,000 (in excess of the £18,600 threshold).

Due to the level of his pay recently being increased we will ask to be considered under Category B. Therefore, the challenge is in meeting the second requirement of £18,600+ earnings in the 12-month period preceding our application. Whilst completing his studies he carried out promotional work for a number of agencies, some of which use a PAYE system and deducted tax, and others which classed him as self-employed (he is also registered self-employed for this reason).

Here's where it gets even more complicated! In order to exceed the £18,600 for the second requirement we will need to combine our earnings. I too have been doing similar work for promotional companies in combination with being a self-employed actress. I read in the December 2012 UKBA guidance notes that to combine self-employment income with my partner's income, I will need to use income from the last full financial year. My records & returns are dated 6th Apr 2011 to 5th Apr 2012, and our accountant will help us compile everything once we know the records needed.


So the questions we have are:
1. Does the financial year I use need to be the last FULL one? (i.e. Apr '11 - Apr' 12 rather than Apr '12 to present date)
2. Provided it is Apr '11 - Apr' 12 for my self-employment income, are we correct in thinking this is to be combined with my partner's income for the 12 months preceding the date of application (based on Category B), even though the year dates will differ between us
3. As some of my partner's income from the promotional agencies he is classed as an employee and some he is self-employed, can he count all of the income in this 12 month period or only that with tax deducted where he was an employee on PAYE system?


Thank you in advance, we really appreciate any help


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## 2farapart

Brilafruz said:


> So the questions we have are:
> 1. Does the financial year I use need to be the last FULL one? (i.e. Apr '11 - Apr' 12 rather than Apr '12 to present date)


Yes - for the self-employment income. Any salaried income must be the immediate 12 months to the application date.



> 2. Provided it is Apr '11 - Apr' 12 for my self-employment income, are we correct in thinking this is to be combined with my partner's income for the 12 months preceding the date of application (based on Category B), even though the year dates will differ between us


It should be. In this situation, if you've continued earning self-employment income since April 2012, I would be inclined to submit additional statements (clipped together separately) for the remaining months from then to the date of your application if it helps your case.



> 3. As some of my partner's income from the promotional agencies he is classed as an employee and some he is self-employed, can he count all of the income in this 12 month period or only that with tax deducted where he was an employee on PAYE system?


Count all income (self-employed and PAYE) before tax is deducted. For self-employment income, you need to deduct anything you claimed as 'expenses' first (as this won't be considered as part of your taxable income). Regarding the periods to use, follow UKBA's rules with salaried income being in the immediately preceding 12 months, and self-employment income being from the last full financial year. Given that you need to provide the most recent bank statements for Category B anyway, these will additionally show what has since been earned as self-employment income.

To help UKBA where financials are combined and complex, make a simple spreadsheet table of the months you're using (ie April 2011 to current date), and set out all your self-employment and PAYE incomes separately for each of you, and this will demonstrate how you've met the requirement (if necessary, you can cross-reference these by highlighting payments in your bank statements). You then need to ensure that pay slips and all the self-employment documentation is provided to support it.


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## Brilafruz

Thank you so much for taking the time to help us, you just offered more clarity in one post than we've had in over a month from a law firm!


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## Brilafruz

One more question just to confirm what we think will be considered towards the financial requirement!

Under Category B my partner's gross annual income at the date of application exceeds £18,600 so no problem there.

In view of the work done for promotional agencies as explained above, can both myself and my partner count both our 'salaried' and 'self-employment' income for the relevant periods (last 12-months for salaried and Apr '11 - Apr '12 for self-employed), therefore adding the four amounts to exceed the £18,600 threshold? We are both still registered as self-employed with HMRC if that is of concern.

Thanks again for your help


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## 2farapart

Yes, absolutely. 

In order to combine self-employment income with salaried income, there is a small catch that I wasn't aware of previously: _you can only count the salaried income from the same financial year being used by the self-employment financial year_, so salary, retainer or anything else you plan to include must also have been received during April 2011-March 2012. If by chance this means you don't meet the full £18,600 after all, it would be better to wait until your partner has worked 6 full months in his new job and apply solely under Category A instead (which saves you all the headache of self-employment evidence too).

If your combined salary/self-employment in the financial year Apr 11/Mar 12 does meet of exceed £18,600, I would still include the new pay slips of your partner's new salaried employment since that period in a separate batch just for the sake of showing how you plan to go on meeting the requirement (and mention in a letter about sponsorship that your partner's ongoing emplyment is salaried above the requirement with or without any self-employment income from either of you).


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## Brilafruz

Ahh ok this makes things a little closer, and my current UK visa expires in two weeks! We definitely need to use my partner's last 12 months income under category B in order to exceed £18,600.

If my partner discards his self-employment income but I include both my salaried & self-employment income for the correct period, do you know whether we would be able to combine the following?
- my partner's salaried income over last 12 months
- my self-employment & 'salaried' income for last financial tax year (Apr' 11 - Apr '12)


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## 2farapart

Brilafruz said:


> Ahh ok this makes things a little closer, and my current UK visa expires in two weeks! We definitely need to use my partner's last 12 months income under category B in order to exceed £18,600.
> 
> If my partner discards his self-employment income but I include both my salaried & self-employment income for the correct period, do you know whether we would be able to combine the following?
> - my partner's salaried income over last 12 months
> - my self-employment & 'salaried' income for last financial tax year (Apr' 11 - Apr '12)


The detailed rules don't seem to specifically cover the situation where, when income is being met by both parties, that salaried income from one party might be treated any differently. As a result, it would be safer not to make an exception and instead keep within the rule that, where self-employment is being used, salaried income (from both of you) must fall within the same 12-month financial year, as set out in the guide to the financial requirements (Section 9):



> 9.3.2. Income from self-employment can be combined with income from Categories A and B: salaried employment, Category C: non-employment income and Category E: pension in order to meet the financial requirement. However, unlike with other Categories, these sources of income must be from the relevant financial year(s) in order to be included. All the income in a self employment case must fall within the financial year(s) relied on. For example, to include income from property rental the income must have been earned during the relevant financial year(s), though the property must still be owned by the relevant person at the date of application.


I'm not saying it _won't _ work. I just don't see any rule stating that it would be acceptable to take one person's exclusively salaried income and use this within the last 12 months whilst the other party submits self-employed evidence for the last complete financial year. The simpler and more brief financial guide simply states that ALL income must fall within the financial year when self-employment is being used as part of the evidence, so that's all I can really suggest in order to keep you safely within the rules.


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## ohmy

2farapart said:


> In this situation, if you've continued earning self-employment income since April 2012, I would be inclined to submit additional statements (clipped together separately) for the remaining months from then to the date of your application if it helps your case.


This is interesting. Do you think this can just be referenced with bank statements. My partner is also combining employment and self employment and we are submitting in a couple weeks, so that financial year feels like a ways back. He's made the 18,6 this current financial year (ending 2013, after our appointment) as well. We've only ordered statements letters etc for the specified time. Do you think it would be worth it to go the extra mile?


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## 2farapart

ohmy said:


> This is interesting. Do you think this can just be referenced with bank statements. My partner is also combining employment and self employment and we are submitting in a couple weeks, so that financial year feels like a ways back. He's made the 18,6 this current financial year (ending 2013, after our appointment) as well. We've only ordered statements letters etc for the specified time. Do you think it would be worth it to go the extra mile?


Given that you're going to a same-day appointment, I would be inclined to carry with me bank statements that fall after the close of the last financial year but keep them bundled and labelled separately from those that tie in with the financial year of self-employment. *These are by no means a necessity *(the requirements are that you provide statements for the financial year when combining any income with self-employment), but it doesn't hurt to take along extra if they help prove your case. When asked for the bank statements, hand over the financial year's set first, saying they are for the financial year, and then offer the second pile to say that these prove earnings since the last financial year. The officer might or might not take them.


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## ohmy

2farapart said:


> Given that you're going to a same-day appointment, I would be inclined to carry with me bank statements that fall after the close of the last financial year but keep them bundled and labelled separately from those that tie in with the financial year of self-employment. *These are by no means a necessity *(the requirements are that you provide statements for the financial year when combining any income with self-employment), but it doesn't hurt to take along extra if they help prove your case. When asked for the bank statements, hand over the financial year's set first, saying they are for the financial year, and then offer the second pile to say that these prove earnings since the last financial year. The officer might or might not take them.


Thanks! I think we'll order them. It def can hurt and it feels weird offering such old info, though thats totally what they ask for.


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## shparks

*recently self-employed - which finances category to use?*

HI, 

Quick question, which I'm hoping is simple to answer. My girlfriend (US) is applying for the partnership and I have a question around my finances. 

I am currently self employed as of last week of March this year. I'm trying to figure out how I should categorize myself because although i'm self employed, I don't have any self-employed income other than 1 week for last financial year. Therefore, which is the best category to choose? 

SHould I go for option G and go with all my payslips from the previous two years of employed work? That way i'm covering what i've earned as a self employed person this year, along with the past 2 years of gross salary. 

I'm really not sure, so guidance would be very much appreciated. 

Thanks


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