Home Office published the report reviewing ILR refusals based on paragraph 322 (5) of the Immigration Rules

We write following our recent article published regarding the rise in the number of ILR refusal of highly skilled migrants, including the Tier 1 (General) category.

In some of these cases the Home Office refers to the paragraph 322 (5) of the Immigration Rules, designed to tackle criminals and those who pose a threat to national security. According to the latest data, around 1,000 migrants under Tier 1 category could not obtain ILR status, because they made amendments to their tax returns, which the Home Office interpreted as a violation of the law.

Refusal of a visa based on paragraph 322 (5) have very serious consequences. Applicants will not be able to obtain any UK visas and can get entry bans for ten years. Many applicants, whose visa applications were refused, had only 14 days to leave the country. Taking into consideration that the majority has families in the UK and have lived here for decades, the limited time given to them to arrange their departure from the country was unfair and unpractical. Those applicants, who appealed the decision, are allowed to stay but without the right to work, rent or use the NHS. Moreover, passports of the applicants who are removed under paragraph 322(5) were permanently marked, which makes it highly unlikely that they will continue their career in the UK or get work visa in any other country.

On 22 November 2018, the Home Office published a report, where the commission reviewed the use of paragraph 322 (5) when refusing ILR of applicants who did not meet the good character requirement due to tax errors. According to the review, from January 2017, 1697 Tier 1 (General) applicants were refused ILR status under section 322 (5). The Home Office confirmed that in the overwhelming majority of cases the refusals were legitimate as “minor tax mistakes” in reality were attempts to misrepresent the income received from self-employment in order to obtain ILR.

In 177 cases (about 10%) the situation was more complicated and not straightforward, but only 56 cases required further investigation. In 25 cases (2%), applicants got refusals by mistake, but subsequently they were granted ILR. In 19 ongoing cases, the Home Office requested additional information from the applicant or HMRC to make a final decision.

According to the review, the applicants usually showed their income from self-employment in addition to the PAYE salary in order to meet the requirements of the minimum income level under the Tier 1 (General) category. At the same time, the income from applicant’s self-employment declared to the HMRC was significantly different to the information they provided in their visa applications. In 88% of cases (1,490 applications), the difference was more than £ 10,000. In 73% of these cases (1,084 applicants) they amended their tax returns within 6 months before submitting their ILR applications. In most cases (83%), amendments were made after three years from the initial date of the tax return. The pattern of behaviour in amending tax records is not typical for HMRC and it drew  attention of the Home Office. The applicants were given the opportunity to clarify the situation with regards to their tax issues. In 39% of cases (640 applicants) they explained that it was the fault of their accountant.

The review also found that 65% of the appeals at the First Tier Tribunal were allowed. In some cases the court accepted the claimants’ explanation of the tax difference due to accountant’s mistakes and some of them were considered on the Human Rights grounds. Most of the application for permission for Judicial Reviews were refused.

The Home Office expects the Court of Appeal to provide further clarity on many issues related to the use of paragraph 322 (5) of the Immigration Rules by early next year. Until then there are no plans to change the approach to decision making process in connection to the paragraph 322 (5) the Immigration Rules.