FLR(M) Financial Requirements - so stressful!

Hi all, my current spousal visa is due to expire on June 25th and while I had every intention of applying in early April, time has ticked on while waiting on bank statements and accountant's letters/etc to meet financial requirements for last full financial year (2018/2019 at the time), that now we are in May all the work we were waiting on is now null and void. 

My husband is self employed and has a company which he set up 3 years ago, and the way it's set us is to take full advantage of (legal) tax breaks which are offered by the government. However, this means that his income from that business is not able to be counted towards the self employment financial requirement.  His accountant found some other income to be used for 2018/2019 but now that we have missed our window, we are back to square one.

I am a self employed fitness instructor and my income from 2019/2020 was 9,720 and while we were initially planning to just use my husbands income, it now appears that we need to use both of ours. I know this is not the recommended route as it is more complicated, but I can't see another way using his company's current set up (if it had been next year all would be easy as he will be an employee of his company) but for now scrambling trying to find the best way to meet the 18.600.  We have cash savings of 20,000 that has been held for the last 6 months from the prior sale of a property (in october 2019) but it appears cash savings cannot be used in combination with self employed income?  We own 2 properties and have rental income of around 8,000 from one of them, we live in the other.  We also show appx 17,000 in profit from sale of shares (as deposits into our bank account from IG), but it doesn't seem like this can be used as non-employment income, if at all. We are both listed on the bank statements, so if any way to combine these sources and only use my self employed income that would be ideal - however the rental property is only in his name so don't think that can work. In addition,  I work for a boutique fitness studio (well, I did before the lockdown) and the way I'm paid is just direct deposits into my bank account - no paper statements, invoices, etc. Is this ok? I'm registered with HMRC as self employed, will they consider this enough evidence in the case of a sole trader?

The guidance is so complicated, it's very hard to know what can be counted and what cannot. I feel like I need a finance and wizardry degree to make sense of it all. On top of it, I'm due to have a baby this week and my head feels about to burst. 

Any insight/advice/encouragement will be much appreciated!

Hey there,

Okay, let's see...

My husband is self employed and has a company which he set up 3 years ago, and the way it's set us is to take full advantage of (legal) tax breaks which are offered by the government. However, this means that his income from that business is not able to be counted towards the self employment financial requirement.

Can you elaborate on this? What is it about his income that means it can't be used? I'm not familiar with all the different aspects of what can and can't be counted for self-employment income for the visa

We have cash savings of 20,000 that has been held for the last 6 months from the prior sale of a property (in october 2019) but it appears cash savings cannot be used in combination with self employed income?

Yes, that's correct - you cannot combine cash savings with self-employed income.

Your £20,000 in cash savings can count for £1,600 of the £18,600 requirement, so you would need to find another £17,000 in income to add to it.

You can use the 8,000 from your rental income under Category C non-employment income, so that takes you to around £9,600 of the £18,600.

We also show appx 17,000 in profit from sale of shares (as deposits into our bank account from IG), but it doesn't seem like this can be used as non-employment income, if at all.

How long did you own the shares before you sold them? If you owned them at the start of the 6 months prior to applying, it looks like you can use that money as Cash Savings without the money having to be in your account for 6 months.

See page 52-53 of Appendix FM 1.7, which says:

7.4.9.
This means that, where the cash savings have previously been held as investments (including where they have been held in an investment account which does not meet the requirements of paragraphs 11 and 11A(a)), stocks, shares, bonds or trust funds that were owned by and under the control of the applicant, their partner or both jointly, this ownership period can be counted towards the 6 month period.
So money held as cash savings at the date of application can have been liquidated or transferred by the same owner(s) from investments and may have been held as investments for the first part of the period of 6 months prior to the date of application and as cash savings for the rest of that 6 month period (see the table in 7.4.3. for a summary of the cash savings requirements).

Evidence must be provided showing that:
 The investments, stocks, shares, bonds or trust funds were in the ownership and under the control of the applicant, their partner or both jointly for that part of the 6 month period prior to the date of application before they were liquidated into cash savings;
 The value of the investments, stocks, shares, bonds or trust funds at or before the beginning of that 6 month period was at least equivalent to the amount of the cash savings relied upon in the application;
 and
 The cash savings meet the requirements of Appendix FM-SE.

If you are able to meet these requirements for the shares, that gives you about £37,000 in cash savings, which is equivalent to £8,400 of the £18,600 requirement... add to that your £8,000 in rental income, and you're up to £16,400.
 
Do either of you have any other form of savings or any other income at all (not self-employment income) you could use to make up the rest? What about a 401K or other type of pension fund? It wouldn't actually need to be cashed out, you would just have to show you COULD withdraw the money immediately (with or without penalty) if needed?

Alternatively, if you were to use your self-employment income (which really should be a last resort), you can combine it with your house rental income, but not with your £20,000 cash savings or your £17,000 shares profit.

You can only use the house rental income earned in the 2019/2020 tax year though - the same period as your self-employment income.

You said you have about £9,700 in self-employment income, and £8,000 in rental income, so that takes you to £17,700, so you would need £900 more to meet the requirement.

How much did you earn from your other job in the last tax year? Do you have any other evidence of being employed/earning that money? Can you show this income will continue for the 2020/2021 tax year?

Ideally, though if you can use the cash savings/rental income route, that would be easier, paperwork-wise.

It’s just unfortunate that you can’t combine your self-employment with cash savings.


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Can you elaborate on this? What is it about his income that means it can't be used? I'm not familiar with all the different aspects of what can and can't be counted for self-employment income for the visa

To be honest, i'm not even sure why it cannot be used but his accountant cautioned against it - he has been paying himself from the company he set up but apparently not in an 'official' way where he's paid taxes on it as self employed income, I think the taxes are paid via the company. So the accountant has said that while everything is legal, it may not be favourable.

Yes, that's correct - you cannot combine cash savings with self-employed income.

Your £20,000 in cash savings can count for £1,600 of the £18,600 requirement, so you would need to find another £17,000 in income to add to it.

You can use the 8,000 from your rental income under Category C non-employment income, so that takes you to around £9,600 of the £18,600.

In this case would it be better to forget the cash savings and just use the non-employemt rental income combined with my self employed income? That gets us close to around 17,000.

How long did you own the shares before you sold them? If you owned them at the start of the 6 months prior to applying, it looks like you can use that money as Cash Savings without the money having to be in your account for 6 months.

See page 52-53 of Appendix FM 1.7, which says:
If you are able to meet these requirements for the shares, that gives you about £37,000 in cash savings, which is equivalent to £8,400 of the £18,600 requirement... add to that your £8,000 in rental income, and you're up to £16,400.
 
Again, not sure about this either - will have my husband go through and check his IG account and when he owned them vs. sold. He doesn't usually have stocks for very long and these shares were not sold all in one go, but different times.


Do either of you have any other form of savings or any other income at all (not self-employment income) you could use to make up the rest? What about a 401K or other type of pension fund? It wouldn't actually need to be cashed out, you would just have to show you COULD withdraw the money immediately (with or without penalty) if needed?
[/quote]

I have a retirement account in the US with a bit of cash in it, but I don't think it can be cashed out without penalty at any time. We have various amounts incoming, but nothing that I can think of that is 'official' like a pension or 401k. My husband has money coming in and out of the account regularly (sounds dodgy, I know) from different investments he's had in pubs and businesses but these have been handshake deals with friends or with his father mostly so nothing with a proper paper trail. We managed to make it work for 2018/2019 as he was paid back from profits on a sale of business. He's going to sit with the bank statements and go through tonight to try and find some incoming payments that would work, but they'd likely have to be considered self employed income.

I really didn't understand that he'd set up his business in such a complicated way and knew he earns well above the financial requirement, so didn't foresee it being a problem. Now I know better 

We also have some funds in a US bank account- my husband thinks we have held around $10,000 over the past 12 months- I need to verify this. If so, could we count this towards cash savings. I’m sure I have read this is possible somewhere but wasn’t even thinking about the us account.

I’ll look into this and my IRA tonight.


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To be honest, i'm not even sure why it cannot be used but his accountant cautioned against it - he has been paying himself from the company he set up but apparently not in an 'official' way where he's paid taxes on it as self employed income, I think the taxes are paid via the company. So the accountant has said that while everything is legal, it may not be favourable.

Ah, okay, I don't know enough about the intricacies of how self-employment income is viewed so say whether or not it could be used for the visa.

In this case would it be better to forget the cash savings and just use the non-employemt rental income combined with my self employed income? That gets us close to around 17,000.

In theory, yes, but how are you going to make up the rest to get to £18,600?

Even though it gets you to £17,000, you are still £1,600 short of meeting the requirement. You can't use cash savings, so where will the rest of the income come from?

I have a retirement account in the US with a bit of cash in it, but I don't think it can be cashed out without penalty at any time. We have various amounts incoming, but nothing that I can think of that is 'official' like a pension or 401k.

I would have a look into that and see what the policy is for withdrawing early.  If it's a retirement account and you find you can take out the money (even with a penalty) , it may be suitable to use.

It doesn't matter if there's a penalty for cashing it out, or even if it could take a few days to get the money... it can still work... what you can't use is an account where the money cannot be accessed for several years - you need to show that if something were to happen tomorrow, you could access the money now.

The guidance for cash savings in pension/retirement funds is as follows:

7.4.4. For example, in the UK a ‘stocks and shares’ Individual Savings Account (ISA) does meet the definition of a savings account and the funds can be considered as cash savings if all the requirements above are met. Likewise, a pension savings account from which savings can be immediately withdrawn.

and

7.4.7. If a penalty would be deducted from the cash savings if they were to be withdrawn from the account without notice, the amount of the penalty should not be deducted from the level of savings held at date of application.

We also have some funds in a US bank account- my husband thinks we have held around $10,000 over the past 12 months- I need to verify this. If so, could we count this towards cash savings. I’m sure I have read this is possible somewhere but wasn’t even thinking about the us account.

Of course you can count it .  You can use any cash savings in any currency in any bank account in any country, as long as the account is valid and legal, it is in your name(s), the money has been obtained legally, and it has been in your account for at least 6 months. For all the cash savings, they can only consider the lowest balance in the account on any day in the 6 months prior to applying.

When I asked if you had any other money at all, I meant things like cash savings in the US.

As of today's exchange rate, $10,000 is about £8,080 (to work out the conversion, they use the Oanda exchange rate on the date you submit the online application).

So, that means you would have approximately £20,000 + £17,000 + £8,080 = £45,080 in savings... which is equivalent to £11,632 towards the income requirement. (edited because I accidentally converted to Euros and not GBP)

Add that to your £8,000 rental income, and that takes you to £19,632, which meets the requirements .

So, you would apply under Category C: Non-Employment income and Category D: Cash Savings.

Sorry I disappeared! I went off and had a baby on May 14th and have been in a hazy newborn bubble ever since...but coming out of it now to focus on getting this application done and sent in.

In going through our banking, we didn't hold the cash savings at that level for long enough to use it - so instead my husband has gotten his taxes for 109/2020 done and found some self employed income to combine with the property rental to get us over the threshold. Just waiting on the accountant's certificate of confirmation and one letter we need from Barclays to explain why the saver account is missing the last 11 days of December (for some reason the statements are annual and run on strange dates, Dec 22 2018-Dec 22 2019?!).

So while I wait for that, have been compiling all my paperwork and have run into a snag with my relationship evidence - I have a gap for one of my husband's pieces of mail and thinking it might be better to send extra to cover the 2 year period.  Here's what I've got, please let me know what you think.

1. March 2018
Barclays statement - both names

2. July 2018
Barclays statement - both names

3. November 2018                               
Barclays - both names                                 

4. March 2019
EDF Energy - both names

5. August 2019                                6. October 2019
Talk Talk bill - my name                    Thames Water- husband
                                                            7. October 2019
                                                               Barclays - my name

* we have nothing for my husband between
March EDF bill and Oct Thames water,
I have mail in my name for June, Oct,
Nov, Dec 2019 but don’t think they help
so much with spacing.



  8. January 2020                                9. January 2020
UCLH Hospital letter -my name        Council Tax - husband

10. May 2020                                      11. May 2020
HMRC self assessment tax notice -   Barclays loan- my name
husbands name

Sorry I disappeared! I went off and had a baby on May 14th and have been in a hazy newborn bubble ever since...but coming out of it now to focus on getting this application done and sent in.

Congratulations on your new arrival!

So while I wait for that, have been compiling all my paperwork and have run into a snag with my relationship evidence - I have a gap for one of my husband's pieces of mail and thinking it might be better to send extra to cover the 2 year period.  Here's what I've got, please let me know what you think.

Okay, so you as you're applying in June, you'll want to cover every 4 months from June 2018 to June 2020, so you'll want documents from the following months:
June 2018
October 2018
February 2019
June 2019
October 2019
February 2020
Optional extra: June 2020

Alternatively, if you can't do those months, you could use May 2018 to May 2020:
May 2018
September 2018
January 2019
May 2019
September 2019
January 2020
Optional extra: May 2020

Do you have monthly bank statements that have been mailed to you? If so, they can be used to fill any gaps you are missing for the specific months listed above.

For example, if you have monthly mailed bank statements you can use, you could do the following:

May 2018
Applicant: bank statement (source 1)
Sponsor: bank statement

September 2018
Applicant: bank statement
Sponsor: bank statement

January 2019
Applicant: bank statement
Sponsor: bank statement

May 2019
Applicant: bank statement
Sponsor: bank statement

September 2019
Applicant: bank statement
Sponsor: bank statement

January 2020
Applicant: UCLH Hospital letter (source 2)
Sponsor: Council Tax (Source 3)

Optional extra: May 2020
Applicant: Barclays loan
Sponsor: HMRC self assessment tax notice (source 4)

Thank you!

I have lots of other mail, but mostly in my name and not for my husband. This was literally the best configuration I could put together (yikes!) so I’m hoping it can work with the 4-5 month spacing on average with that large gap for my husband between March -October.

At some point our bank statements went online only and I’ve had to get bank statements printed out and stamped by the bank- so unfortunately can’t fill in with those


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Thank you!

I have lots of other mail, but mostly in my name and not for my husband. This was literally the best configuration I could put together (yikes!) so I’m hoping it can work with the 4-5 month spacing on average with that large gap for my husband between March -October.

All you can do is the best you can, so if you can't get the right spacing, you'll just need to write a letter explaining why not.

At some point our bank statements went online only and I’ve had to get bank statements printed out and stamped by the bank- so unfortunately can’t fill in with those

Okay, I would get those taken OFF paperless ASAP, and save ALL of them for the next 2.5 years as you'll need to do the same thing again with the mail for ILR (only spaced every 5 months, as you cover the whole 2.5 years for ILR, not 2 years.).

Also, if you haven't already, if you can get joint names on as many things as possible , that will also help for the next visa.

The other thing you can do is once you get your FLR(M), you can work out what document spacing you'll need for ILR, so that as you go through the next 2.5 years, you can make sure you have something in each name every 5 months... that way, when it comes to applying for ILR, you will have all the documents ready to go for the correct months, and won't need to try to figure it all out just before you apply .

That’s great advice- I’ve already requested the bank statements and will work to get things put into both of our names.

I’ll come back with my final documents checklist before I submit. Thanks again for all your help. It’s so reassuring to know you and the experts are here. We wouldn’t be able to do it without you!


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Payments made and application submitted yesterday!  As with everyone else, just waiting on biometrics appointments to open up. Am feeling relieved that it's done (after quadruple checking my application and documents), and was pleasantly surprised by the full document checklist that was provided for me to reference - surprisingly clear on the part of UKVI for once!

Just a couple of questions on docs. 

For our residency in the UK, we own our home and I have a register of title but no mortgage statement as they are entirely paperless, was planning to use the title and bank statements for supporting evidence but have read other posts where the mortgage statement has been recommended. Assuming this will be ok?

I am hoping to use the 'enhanced' location in London for biometrics as I read that document checking and scanning are part of the service there.  Does this mean that I don't have to scan anything in advance to the Sopra Steria site?  I do want to include a cover letter explaining a few things (name change on passport but not BRP, relationship evidence/mail spacing being off by a couple of months) If I bring everything in person for scanning I will just hand it over, but if I should scan in advance is there an opportunity to include this or do I just submit it myself as the first doc? Sorry this may become evident when I go to scan but just covering all bases.

 

For our residency in the UK, we own our home and I have a register of title but no mortgage statement as they are entirely paperless, was planning to use the title and bank statements for supporting evidence but have read other posts where the mortgage statement has been recommended. Assuming this will be ok?

The mortgage statement is recommended to show you are paying it off and won’t default on the mortgage.

I would print off your latest statement and include it.

Do not include bank statements.

The only documents you need to include for the accommodation are:
- Land Registry
- latest Mortgage statement
- latest council tax bill

I am hoping to use the 'enhanced' location in London for biometrics as I read that document checking and scanning are part of the service there.  Does this mean that I don't have to scan anything in advance to the Sopra Steria site? 

That’s correct.

You will need to book an ‘Enhanced Appointment’ when they become available, which will cost about £69.

I do want to include a cover letter explaining a few things (name change on passport but not BRP, relationship evidence/mail spacing being off by a couple of months) If I bring everything in person for scanning I will just hand it over, but if I should scan in advance is there an opportunity to include this or do I just submit it myself as the first doc? Sorry this may become evident when I go to scan but just covering all bases.

If you are scanning in advance you will include it in one of the upload sections. Not sure which one - probably ‘Other’.


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