An end to abuse of the
Tier 1 Entrepreneur

As immigration categories have become increasingly restricted, the Tier 1 Entrepreneur route has continued to grow as a target for ‘would be abusers’ of the UK immigration system. Although many applicants may well have satisfied the requirements laid out by the Home Office, it is apparent that many fail to fall in line with what the Home Office intended this route to be used for. That is per se, those with alternative intentions to entrepreneurialism.

This frailty was only heightened by the weak evidential requirements, whereby migrants can portray a facade of genuineness to their otherwise defunct ‘business’ activity. In light of this the Home Office took steps in January 2013 to reinforce the requirements and ensure an end to the exploitation of the route, whilst also serving to protect those with a genuine interest in carrying out their economic activity in the UK.

The changes are not only applicable to those seeking entry clearance as an entrepreneur but also migrants applying for indefinite leave to remain and extensions on the basis of existing leave in the category. Migrants may now be required to provide documentation such as business plans and evidence of market research. These documents must be provided within 28 days of their request and an interview may still be necessary. Furthermore it is now a requirement that the funds should be invested ‘on an ongoing basis rather than solely at the time of the application’. This therefore avoids scenarios where migrants are sharing or recycling funds.

So how have the new rules impacted upon the Entrepreneur category a year down the line? When we examine the period July – September 2012 we can see there were a total of 508 refusals for Tier 1 Entrepreneur entry clearance applications. The next year, following the changes, this figure rose to 8,602, a 17 fold increase in the space of 12 months. Undoubtedly skewed by the closure of Tier 1 PSW and Tier 1 General this high level of refusals still serves to demonstrate the number of potential migrants claiming to be entrepreneurs and yet being turned away by the Home Office.

Meanwhile, for the same period as above, the number of entrepreneurs entering the country has increased by approximately 20%. This at least serves to demonstrate that the more stringent requirements have not smothered the category entirely and some genuine entrepreneurs continue to bring economic activity to the UK. Abuse may have ended, but the category as a whole has not.

There is no doubt that the measures do go some way to ensuring the Home Office caseworkers are aware of the previous exploitation and that they have the tools to stop it.  However it is at their discretion as to whether any action is taken, as providing the additional documents is not a pre-requisite. This has engendered a great deal of subjectivity in the decision making process and does raise the question as to whether too much divergence from the objectively focused Points Based System has occurred.

Therefore, although the rule change has certainly whittled away at the face of abuse, the measures put in place by the Home Office still contain weaknesses by way of the increased subjectivity involved. Whether the changes will continue to have a meaningful impact is largely down to the individuals at the Home Office and their key position as ‘gatekeepers’ to this category. If their decision making process can be codified into a scoring system, further benefits will surely be reaped.

For further information on the Tier 1 Entrepreneur category, please contact Smith Stone Walters today.

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