“Recently it has come to our attention during our internal audit that an incorrect year end submission was made to HMRC. After detailed enquiry we found out that before the submission the computer that was used to file the year-end report was not working properly with the software. One of our former consultant who we used for submitting year-end reports to HMRC did not confirm the figures and end up submitting an incorrect year-end report with a total of£7,650 annual gross salary. This year-end report only provided with December 2011 salary of£4,500 and January 2012’s salary of£3,150 . The months from May 2011 to November 2011 were omitted out of the report we therefore request you to please see enclosed the amended report providing the difference from the£39,150 (actual gross salary) -£7,650 (submitted to HMRC) equals£31,500 (the difference).”
“At your appointment on20 July 2016 at Sheffield Premium Service Centre you were asked to complete a questionnaire regarding your economic activities and your earnings from your employment. Question 9 of the questionnaire asked: Q – are you satisfied that the self-assessment tax returns submitted to HMRC accurately reflect your self-employed income? A – you ticked “Yes” to indicate you are satisfied that the self-assessment tax returns submitted to HMRC accurately reflect your self-employed income. There is a considerable discrepancy between the amount of salaried earnings claimed to UKVI to the amount of salaried earnings you declared to HMRC. It is acknowledged that Paragraph 322(5) of the Immigration Rules is not a mandatory refusal, however the evidence submitted does not satisfactorily demonstrate that the failure to declare to HMRC at the time any of the self-employed earnings declared on your previous application for leave to remain in the United Kingdom as a Tier 1 (General) migrant was a genuine error. It is noted that there would have been a clear benefit to yourself either by failing to declare your full earnings to HMRC with respect to reducing your tax liability or by falsely representing your earnings to UK Visas and Immigration to enable you to meet the points required to obtain leave to remain in the United Kingdom as a Tier 1 (General) migrant. The Secretary of State considers that it would be undesirable for you to remain in the United Kingdom based on the fact that you have been deceitful or dishonest in your dealings with HMRC and/or UK Visas and Immigration by failing to declare your claimed self-employed earnings to HMRC at the time and/or by falsely representing your self employed income to obtain leave to remain in the United Kingdom.”
“UK Visas and Immigration Centre To whom it may concern Re: AAS Professional Ltd – Shahbaz Ahmad Khan NI number: [ ] Dear Sir or Madam, We are the accountants for the above mentioned company and for Dr Shahbaz Ahmad Khan. During the year-end5 April 2012 , the P35/P14 was submitted to HMRC with the information of an employee Dr Shahbaz Ahmad Khan holding NI number [ ]. We confirm that the employee was on a salary from May 2011 to December 2011 of£4,500 gross per month and from January 2012£3,150 gross for the month making a total of£39,150 annual gross salary. It has come to our attention that an incorrect year-end submission was made to HMRC. After detailed enquiry, we found out that before the submission we had a problem with our IT system and the software was not working properly. One of our former consultant who we used for submitting year-end reports to HMRC did not confirm the figures with responsible person and end up submitting an incorrect year-end report with a total of£7,650 annual gross salary. This year-end report only provided with December 2011 salary of£4,500 and January 2012’s salary of£3,150 . The months from May 2011 to November 2011 were omitted out of the report. We would like to confirm that this was just a clerical error plus software issue, not our client intentions. We apologise for any inconvenience this may have caused.”
“Consideration has been given to your application dated18 January 2012 when you applied for leave to remain in the United Kingdom as a Tier 1 (General) migrant and claimed 40 points for earnings of£36,000 in the period16 May 2011 to30 December 2011 . Your earnings were from one source: salaried employment as a director of a limited company, AS Professionals Ltd. When assessing your application of22 November 2016 for indefinite leave to remain as Tier 1 (General) migrant, consideration has been given to the information you have provided to HMRC concerning your income from all employment. The information you provided to HMRC about your salaried employment as a director of a limited company had a direct impact on your tax liability and the amount of tax you would be required to pay. The information you provided to UKVI about your salaried employment as the director of a limited company was required in order for you to obtain your Tier 1 (General) visa. On investigation it is clear that there are significant differences in the information you initially provided to HMRC and the information you provided to UKVI. When reviewed, it was apparent to UKVI the earnings from salaried employment as the director of a limited company you had declared for the tax year 2011 to 2012 on your application was significantly different from the information you had declared to HMRC. You had UKVI salaried earnings of£36,000 in the period16 May 2011 to30 December 2011 for your application dated18 January 2012 . Information provided to us from HMRC confirms that for the year6 April 2011 to5 April 2012 you originally only declared£7,650 . On20 July 2016 you made an application for indefinite leave to remain which was refused on character and conduct as you failed to declare your full earnings for the tax year06 April 2011 to05 April 2012 . You have now made a further application for indefinite leave to remain and provided a letter from your accountant dated14 November 2016 which provides an explanation regarding the substantial discrepancy and a letter from HMRC dated9 September 2016 stating your records have been amended and asking for the increased tax liability to be paid. Your amended tax returns to HMRC are acknowledged and it [is] recognised you have a revised tax liability figure from HMRC. However, it is considered you should have taken reasonable care to ensure your tax returns were correctly submitted. This would include verification that your returns had been submitted to HMRC with the correct earnings declared. Although your accountant stated that the error was a clerical one on their part it is taken that as your earnings are based on turnover, minus costs, equals profit we would consider this to be routine work that is not complex and therefore you should have taken reasonable care to ensure the correct returns had been submitted to HMRC. Further, it is only after being called to account within your previous refusal that you have reviewed and amended your returns. The fact that you have retrospectively declared these claimed earnings to HMRC is not sufficient to satisfy the Secretary of State that you have not previously been deceitful or dishonest in your dealings with HMRC and/or UK Visas and Immigration. Your actions in declaring different amounts of income to HMRC and UKVI lead to the conclusion that in light of your character and conduct it will be undesirable to allow you to remain in the United Kingdom. Your character and conduct with regards to declaring your income would lead to a refusal of your application under general grounds paragraph 322 (5) of the Immigration Rules. Whilst a refusal under paragraph 322 (5) of the Immigration Rules is not a mandatory decision, it is considered your actions in declaring different income to HMRC and UKVI would mean that a refusal under paragraph 322 (5) is appropriate.”
“In relation to the discrepancy, the accountant responsible for filing the returns had communicated the underpayment of taxes in a letter dated15 July 2016 and26 August 2016 . Indeed, the correspondence was acknowledged by the HMRC according to their letter dated9 September 2016 . The SSHD has not properly assessed this context, and it was, we submit, incumbent upon the SSHD to clarify with HMRC the correct position. Particularly, given the extent of the co-operation between the two departments in liaising with one another. The Applicant never had the intention to deceive the Home Office and this is very much evident from HMRC letter dated9 September 2016 that he did correspond on15 July 2016 with HMRC even before applying for settlement application on20 July 2016 . Home Office failed to give any importance to this regard while considering Applicant’s intentions. … Essentially, in the previous five years of tax returns, there has been one period owing to an innocent mistake perpetrated by the financial adviser, who was obliged to file the said accounts in the correct manner, which has resulted in the Applicant’s settlement application being refused. We submit that decision is unlawful, as the SSHD has failed in her duty to ascertain the position from the other government department. The further assessment in the current application is similarly unlawful as no attempt has been made by the SSHD to ascertain the genuineness of the income relied upon. … It is clear that the underpayment of tax arising from the error on the part of the accountant firm “Accounts & Tax World” was made clear to HMRC prior to the application for settlement being made in the penultimate application (see attached letter from HMRC dated 9/9/16).”
“When deciding whether to refuse under this category, 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 this is undesirable to allow them to enter or remain in the UK.”
“Whilst you claim that the fault with your tax return was the error of the accountant who completed this return, and despite the letter from said accountant taking the blame for the mistake, the onus is on you to ensure the information provided to all government departments is accurate at the time of submission. As your accounts are not deemed to be particularly complex it is ultimately your responsibility and not your accountant’s to ensure that the figures are correct before submission. We do acknowledge that the tax returns have recently been amended and the overdue tax paid, however, this is not enough to satisfy the Secretary of State that the initial discrepancy caused them to question your character and conduct when dealing with government departments. The advantage to you of either decreasing your income to lower your tax liability, or inflating your income to ensure your Tier 1 leave to remain application is approved, is noted by the Secretary of State. This applies regardless of any recent amendments made. Moreover, we do appreciate that the discrepancy only occurred with one of your tax returns and that the [law] does not define certain time scales for amending your tax returns, but as it is UKVI’s responsibility to ensure that the migrants granted settlement are of good character and conduct it is imperative that we take into account all aspects of previous earnings and investigate any variation as and when [it] occurs.” 15. In relation to the paragraph 245CD determination, the review decision stated that the original caseworker had not assessed the Applicant’s current earnings in the light of the concerns raised over the genuineness of previous earnings but that he had been refused ILR under paragraph 322(5), this being a refusal on the basis of character and conduct. It was stated: “The original caseworker has not refused your application on the grounds of deception therefore there is no burden of proof from the Secretary of State in that regard.”
“Given what was happening to his child at the time of the 2012 application for further leave to remain, the Applicant was constantly pre-occupied with the safety and well-being of his child – who was undergoing life-saving treatment. This was a factor affecting the otherwise rigorous attention given by him to his tax returns. It was for these reasons and the error on the part of his accountant that the Applicant’s tax return for 2012 was incorrect. But for the reasons mentioned in the foregoing affecting the Applicant’s said child, the Applicant’s oversight of his tax returns was, uncharacteristically, not as rigorous as would ordinarily be the case. The main burden of the statement of facts was that, in making her decision, the Secretary of State had in effect substituted her own view of the tax return in question for that of HMRC. Thus, it was pleaded that “it is not for the SSHD to introduce her own interpretation of the workings of HMRC.”
“The SSHD has failed to explain why, in her judgement, her view of a tax filing correction is the better view than the tax authorities’ view – who neither rebuked/criticised nor took any step towards punishing the Applicant for making a mistake in filing his return for the relevant 2011/2012 period. “ It was further stated that the Secretary of State had failed to act in a fair manner in determining whether the Applicant had actually met the financial requirements qualifying him for the requisite points according to the points based system requirements and that she had failed to follow the guidance entitled “General grounds for refusal” which includes the following: “When deciding whether to refuse under this category, the key thing is to consider if there is reliable evidence to support a decision that the person’s behaviour calls into question their character and/or their conduct and/or their associations to the extent it is undesirable to allow them to enter or remain in the UK.”
“(9) In the refusal letter, the Respondent did take into account the evidence provided by the Applicant’s accountants but did not provide any reason for concluding that they themselves were seeking to deceive her when they said that the discrepancy had arisen because of a clerical error. Furthermore there was only one discrepancy amongst many years of returns and supporting documents and there was no history of the Applicant using deception. Counsel for the Applicant also submitted that it was reasonable for the Applicant to rely on the skills of his professional accountant.”
“However it is considered that you should have taken reasonable care to ensure your tax returns were correctly submitted. This would include verification that your returns had been submitted to HMRC with the correct earnings declared”
“When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct is honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”
“Were it accepted that the figure declared to the Home Office was an accurate representation of your earnings between February 2012 and January 2013, your actions in failing to declare your earnings in full to HM Revenue and Customs would lead your application to be refused under paragraph 322 (5) of the Immigration Rules based on your character and conduct, as it would be considered that you had been deceitful or dishonest in your dealings with HM Revenue and Customs.”
“11. The difficulty, as I see it in the case put by the Applicant, is that he has asserted that he was given particular advice that would enable him to put in the expenses that he relied on to reduce his tax liabilities, but there is no evidence produced by either the original accountants Oasis, who made the report, or any subsequent accountant who may have spotted the error and dealt with it. If it were accepted by a representative of the accountants that he was so advised, that would be an exceedingly powerful point in his favour. Equally, of course, it would be damaging to him if it were not accepted that any such advice had been given.”
“The letter then suggests that there was ‘just a clerical error plus software issue’. This is simply incredible. It is very difficult, if not impossible to believe that a significant amount just disappeared from the figures and no-one (including the Applicant) noticed until15 July 2016 .”
“Further, it is only after being called to account within your previous refusal that you have reviewed and amended your returns.”
“The fact that you have retrospectively declared these claimed earnings to HMRC is not sufficient to satisfy the Secretary of State that you have not previously been deceitful or dishonest in your dealings with HMRC and/or UK Visas and Immigration.”
“When dishonesty is in question the fact-finding Tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the acts. … when once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people.”
“The key point is that the statute confers the power on the Secretary of State, or the immigration officers acting on her behalf, to make the decision whether to grant or refuse leave to remain. It is for the Secretary of State or her officials, in the exercise of that power and in reaching their decision, to determine which provisions of the Rules apply and whether relevant conditions are satisfied, including the determination of relevant questions of fact. On the reasoning in X v Khawaja and X v Bugdaycay, their findings on such matters are open to challenge in judicial review proceedings only on Wednesbury principles; it is not a situation that their powers depend on some precedent fact the existence of which falls to determination by the court itself.” (iii) The Secretary of State is entitled to refuse a person’s application under paragraph 322(5) of the Immigration Rules if she rationally concludes that he has not been completely honest or transparent in relation to his income either with the Home Office or with HMRC. This is consistent with the text of the Rule and the Secretary of State’s published guidance. (iv) The Secretary of State is entitled to refuse a person’s application under paragraph 322(5) of the Immigration Rules on the basis of matters concerning his tax even if HMRC has taken no action against the Applicant. (v) It is not a defence for a person who has been refused under paragraph 322(5) of the Immigration Rules on the basis of matters concerning his tax return to say that his accountant or agent was responsible for the discrepancies. A person is personally responsible for his tax matters and dealings with HMRC. In relation to the burden and standard of proof, Mr Malik referred again to Giri at paragraph 36 where Richards LJ referred to his previous judgment in R (N) v Mental Health Review Tribunal (Northern Region)[2006] QB468 where he had said at paragraph 62: “Although there is a single civil standard of proof on the balance of probabilities, it is flexible in its application. In particular, the more serious the allegation or the more serious the consequences if the allegation is proved, the stronger must be the evidence before a court will find an allegation proved on the balance of probabilities. Thus the flexibility of the standard lies not in any adjustment to the degree of probability required for an allegation to be proved (such that a more serious allegation has to be proved to a higher degree of probability), but in the strength or quality of the evidence that will in practice be required for an allegation to be proved on the balance of probabilities.”
“I think that the time has come to say, once and for all, that there is only one civil standard of proof and that is proof that the fact in issue more probably occurred than not.”
“However, we do agree … that the consequences of refusal under part 9 can be serious and that is certainly true for persons such as the three claimants who, depending on findings of fact made by the Tribunal may find themselves, if removed from the UK, faced with a five to ten year re-entry ban … whilst we would note that Lord Hoffman in Re B emphasised that the seriousness of the consequences do not require a different standard of proof, we do accept that for the Respondent to satisfy us he has discharged the burden of proof on him on the balance of probabilities he would, in the context of this type of case, need to furnish evidence of sufficient strength and quality and he (and the Tribunal) would need to subject it to a ‘critical’, ‘anxious’ and ‘heightened’ scrutiny.”
“The letter from the accountants accepting responsibility takes matters no further: the responsibility for accounting properly for income is always that of the tax payer and the difference here is so huge that the Respondent was unarguably entitled to consider that the Applicant could not have overlooked it innocently.” (ii) Parveen and Saleem v SSHD (Case number JR/9440/2016): this was another decision of Upper Tribunal Judge Gleeson on1 August 2017 . Again, indefinite leave to remain was refused by the SSHD based upon a significant under-declaration in tax returns in 2011 and 2013 which conflicted with the income figures given in historic visa applications. Thus: (a) On31 March 2011 the Applicant claimed 20 points for earnings of£38,092.79 for the period3 February 2010 to4 February 2011 which included earnings from self-employment of£23,849 but in the declaration to HMRC for the same period, the self-employment income was declared as£2,013 , not£23,849 . (b) On11 May 2013 the application for a visa disclosed self-employed income of£32,340 but, on the HMRC return, the Applicant declared only£694 for self-employed earnings. There was no tax return at all for the year ending April 2014. In May 2016 when the Applicant and her husband were preparing for their application for ILR, they visited the accountant who admitted to filing two incorrect returns and it was their case that the accountant did not tell them at the time that he had filed no return at all for 2014. Judge Gleeson stated: “The principal Applicant has personal responsibility for her tax returns. She would have been aware that she paid much less tax than would normally have been due on such a large of amount of self-employed income. The difference in her claimed income is not marginal nor is the difference in liability to tax. The additional tax to be paid is over£15,000 .”
“61. It is beyond credit that the principal Applicant could have mistaken the amount chargeable to tax for the small self-employed income she declared for the correct tax charged for the large income now relied upon, however incompetent her accountants may have been.” (iii) Pathan v SSHD (Case number JR/12657/2017) a decision of Upper Tribunal Judge Rimington dated27 October 2017 . In this case, when making a previous application for Tier 1 leave on1 April 2011 , the Applicant had claimed to have earned£23,436 net profit as a self-employed sole trader during the period from1 August 2010 to28 February 2011 . However, checks with HMRC revealed that for the financial year ending April 2011, he had declared a net profit from self-employed trading in the sum of£7,948 a discrepancy of£15,488 . Again, the Applicant sought to blame his accountants at the relevant time. In answer to a questionnaire he had stated “the first accountant … did mistakes and submitted wrong amount for year 2010/11. So I changed the accountant and sent revised self return”
“40. Insofar as it was stated that the Applicant was not an accountant and was at worst negligent, the decision maker gave a clear and cogent reason why it was considered his explanation was not accepted. The Applicant was responsible for the returns on his behalf to the HMRC. His MBA certificate which he obtained in 2008 was submitted as part of his Tier 1 application showed that he had taken and managed to pass the “Managing Finance Unit” and was therefore familiar with the financial business practice.”
“46. It is correct that accountants can make mistakes but the information that was before the Secretary of State was that the Applicant had a Masters in Business Administration, not least a finance module and the Secretary of State in her reasoning considered that not only had he provided the financial information to the accountant, but even if the accountant had made an error, it was considered that the Applicant would have contacted the HMRC immediately on receipt of his own tax documentation to correct such an error. In effect the Secretary of State had stated that the Applicant delayed and waited nearly five years to submit a revised figure to HMRC and that was a matter of days before he made an application for indefinite leave to remain.”
“76. In my view, on the facts, there was a solid foundation on which the Secretary of State could make a rational decision. On the facts as presented the Secretary of State’s response was unarguably within the range of reasonable responses. She asked herself the correct question on the relevant facts. The Applicant knew he was self-employed and had for at least three tax years made a nil declaration for self-employed earnings which supported an application to UKVI; it was not the case that earnings were just a discrepancy. It is unarguable that dishonesty could be inferred. 77. I list my reasoning found in relation to ground (iii). Deficiencies in tax returns and failure to pay tax can infer dishonesty and it is open to the Secretary of State to apply paragraph 322 (5) to such cases.”
“The Upper Tribunal is respectfully invited to follow this consistent line of authority in relation to cases concerning paragraph 322 (5) of the Immigration Rules and tax matters, and dismiss the Applicant’s claim.”
“Given what was happening to his child at the time of the 2012 application for further leave to remain, the Applicant was constantly preoccupied with the safety and well being of his child – who was undergoing life saving treatment. This was a factor affecting the otherwise rigorous attention given to his tax returns. … But for the reasons mentioned in the foregoing affecting the Applicant’s said child, the Applicant oversight of his tax returns was, uncharacteristically, not as rigorous as would ordinarily be the case.”
“That A2 had presented with an episode of seizures in January 2010 but after the family returned to the UK in April 2011 ‘A2 remained well’ until March 2013 when he again presented to Newham University Hospital with severe headaches and vomiting – he immediately had a scan and was found to have a brain tumour.”
“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.”
“No details were provided as to this alleged IT “problem”
“However, the original caseworker has not assessed your current earnings in light of the concerns raised over the genuineness of previous earnings; you have also been refused under paragraph 322 (5) which is a refusal on the basis of your character and conduct. The original caseworker has not refused your application on the grounds of deception, therefore there is no burden of proof upon the Secretary of State in that regard.”