strategies for meeting fin reqmts for spousal visa

Newcomer here- I've spent a few hours reading through prior posts: very informative and helpful members...

DW & I have been unpleasantly surprised by the challenge of securing a spousal visa for me under the new regs. Our current situation:

DW is UKC, I am USC, we've been married 17 years, and have four kids 5-15. Kids were all born in US, but obviously are UKC's via mom. Will be applying for their first UK passports shortly.

Our plan is to return to the UK in the summer of this year, between school years.

Our income primarily comes from a US business we (technically I) own: $80K+ per year profit. Our business operates virtually (a marketing consultancy & web design firm), and we intend to continue it in the UK.  I have yet to meet a single one of my clients in person for 2.5 year running- and I don't anticipate any significant roadblocks operating out of the UK from a continuity perspective.

The issue is that the business is structured in a way that DW does not receive any income directly in her name, even though she does a considerable amount of work for the company. We live in a community property state, and file our taxes jointly- so setting her up on salary or profit distributions seemed an unnecessary complication, until now.

It appears any income in my name, can't be counted toward the financial requirement (FWIW- our business is a Limited Liability Corp, and the profits I take from it are treated as self-employment income for US tax purposes). We also don't have nearly enough savings to use that as an option for meeting requirement.

I've looked at all the other Visa categories- and it doesn't appear that there are any other options for me to use. Sole rep of overseas biz, tier 2, entrepreneur: I can't see making any of those work.

Unfortunately, there is no visa category for "internet/telecommuting worker, paying taxes in UK for overseas-sourced income" - although there should be!

The only thing I can think of, is to put my wife on payroll now. Pay her in excess of the financial reqmt (likely $3k/month).  Do this for six months in US, then setup a UK business entity, start her on equivalent salary there, then submit application.

I believe this complies with 5.1.1 of the FM-1.7 document.  She'd also be getting paid by the LLC, not by me personally (so should not run afoul of the restriction on income from household members). Its also legit income- she truly does a bunch of work for the company.

Any feedback on above strategy?  Suggestions on an alternate strategy?

Thanks much,
scott

Hello -

I'm no expert at all, but I read your situation and I'm really interested to see how this would pan out for you.

Not sure what your wife's employment background is, but could she go to the UK and work for a different employer in the UK to meet the financial requirements and then sponsor you? I know there are two different categories for that route - one that applies to employment for less than 6 months, and one that applies to more than 6 months. You could go over for up to 6 months as a general visitor while she does this. Your children would be able to go over anyway because of your wife.

Or, maybe she could register the business with HMRC in the UK and operate within an equity partnership? I just learned from another poster on here (who is much more well-versed than myself) that an equity partner in a business partnership who draws salary from the profits of the company will be able to apply under the salaried employment category. It says that here (from the Annex FM 1.7):

9.5. Self-Employment as a sole trader, a partner or in a franchise - Requirements
9.5.2. Appendix FM-SE further specifies the requirements for self-employment income:

9.5.1. A sole trader is a business that is owned and controlled by one person, although they may employ additional staff. A partnership is where the business is owned by two or more people (although equity partners will be treated as in salaried employment for the purposes of the financial requirement - see section 5 of this guidance). And a franchise allows a person the right to use an existing business idea.

I don't know what the difference is between a regular partnership and an equity partnership though. But if everything was set up properly, i.e., payslips, P60 forms, etc., I don't see that route being out of the question.

The Annex FM 1.7 also says that for self-employment outside of the UK, the reasonable equivalent for the requirements for self-employment in the UK should be evidenced. So perhaps you could put her on the payroll in the US if that's easier, and supply the equivalent evidence to them. Though there is not much guidance on what they would be looking for specifically. But I would assume to interpret it fairly literally, and supply information about your business registration in the States, payslips, tax ID information, taxes paid, healthcare contributions, etc.

I'm not sure if either of these suggestions make sense for you, but I figured I'd throw it out there.  

Not sure what your wife's employment background is, but could she go to the UK and work for a different employer in the UK to meet the financial requirements and then sponsor you?

Not easily- and the timelines would likely push us out well past this summer. Before coming to the US, she owned a day spa. That paid well- but working as an esthetician as an employee, would not likely pay enough to qualify. The work she does for our business would translate to employment elsewhere (bookkeeper/ office admin), but both finding a job- and at sufficient salary, would be a challenge. Besides- we need her to keep doing the work on our own business (already a full time job - much less raising 4 kids - and coordinating the big move).

You could go over for up to 6 months as a general visitor while she does this.

I need to keep our main business running- and from other posts here, it appears the UKBA seriously frowns on doing telecommuting work while on a visitor visa (even if you aren't taking jobs from UK residents, the source of the income is overseas, and you pay all the req'd UK taxes). 

Or, maybe she could register the business with HMRC in the UK and operate within an equity partnership?

My next area of research was to try and understand the UK business entities better. I know them well here... 

It is straightforward for me to set her up as a proper salaried employee here in the US. If she does that for 6 months, and the UKBA accepts that under 5.1.1 of the annex (as salary earned for at least 6 months from same employer prior to application). It seems the only other test is that she has verified UK employment starting within 3 months of return to UK.

So, I'd need to figure out how to structure a UK business entity, where her income is treated as an employee. I'd like to understand more about the "equity partners" scenario you'd outlined.  We want to avoid her income being treated as self-employed, since they would then look at a year's worth of income, rather than just 6 months.

I'm not sure if either of these suggestions make sense for you, but I figured I'd throw it out there.  

All info is helpful at this point.  We've already pulled the trigger on disenrolling my oldest daughter from high school here, and she is lined up to start Year 10 high school next month in the UK. Living with her grandparents, along with DW who will be shuttling back-and-forth.

The train is already leaving the station, and we are now deeply concerned I won't be on it (at least not initially...).

I feel so badly for you - 17 years together and 4 children, gainfully employed, and this is what you have to put up with. Ridiculous. 

I'm also very interested myself in finding out how an equity partnership works; my own immigration situation might benefit from it as well.

Here's a link to my thread where that idea was introduced to me by another poster:

http://talk.uk-yankee.com/index.php?topic=78447.0

I'm uncertain what the difference actually is between a standard business partnership and equity partners. The only thing I could think of is if it's the difference between producing goods or services, with the latter possibly being the determining factor, since most examples of equity partners are law firms, doctor's practices, etc.

The only thing that I know about setting up a business in the UK is what I know from my partner's business. She and her brother applied online at HRMC's website, and submitted form SA400. They then returned an acknowledgement to them via mail. The financial year runs from March - April. VAT is applicable to businesses with turnover in excess of £73,000 if my memory serves correctly.

There were two things I thought of for my own situation, which may or may not be of use to you in the future: one, is for my partner to use a payroll company to prove income via payslips. How that would work with an equity partnership is still unknown to me, though I have contacted some payroll companies to inquire and am still waiting on a response from them.

Two, is her becoming an employee of the company (even if just temporarily) in order to produce the 6 months of pay slips needed. I know that there is also a way to produce less than 6 months of pay slips as a salaried employee to meet the financial requirements, but I'm still quite unfamiliar with how that could be accomplished. But perhaps that information might be of use to us both.

And perhaps someone else who is more versed in this area might chime in if we're lucky.

At any rate, I'll share whatever I find out with you and hope that it might be useful.