More applications being refused at UK Home Office

Date: 05 Oct 2016


James Perrot, senior counsel at Macfarlanes, also says the fees that the UK Government are charging for immigration applications continue to rise on an annual basis, sometimes by significant amounts.

Following the Brexit vote, what is your advice for EU nationals?

EEA and Swiss nationals have nothing to worry about until the date that the UK formally leaves the EU.However, if they wish to remain in the UK long term, we are currently advising that they should obtain confirmation of their status in the UK under EU law either by applying for a registration certificate or, if they have been living in the UK for five years, a document certifying permanent residence. This way, they will already be in the Home Office’s system and it should therefore be easier for them to obtain the required status in the future.

What effect will Brexit have on businesses?

The biggest immigration issue for UK businesses at the present are the upcoming changes to Tier 2 of the points based system, which is the category which allows UK companies to sponsor non-EEA nationals to work in the UK. These changes, which are being implemented in stages in autumn 2016 and April 2017, will effectively make it a lot more expensive for companies to sponsor non-EEA nationals to work in the UK.The changes will also have the effect of only allowing companies to transfer senior staff to the UK from their offices overseas.

Cameron doubled the required investment from £1m to £2m for the Tier 1 (Investor) visa application. How did that impact UHNW clients planning to invest in the UK?

The increase of the minimum investment threshold for the Tier 1 (Investor) category was a major factor which led to an substantial fall in the number of people applying for immigration permission to enter the UK under this category since 2014. Although this increase has not put off ultra-high net worth individuals, it has certainly meant that those who could have afforded to invest £1 million but for whom £2 million represents a significant proportion of their net wealth, particularly those coming from China and Russia, can no longer meet the requirements of this category. They are therefore looking at other routes for entering the UK, such as the Tier 1 (Entrepreneur) category, which only requires an investment of £200,000 into a company that the individual will be involved in running on a day to day basis.

Do your clients forum shop?
Although the economic citizenship options for countries such as Malta and Cyprus are popular with high net worth clients, our experience is that, if an individual’s ultimate destination is the UK and they can afford to meet the ¬£2 million investment threshold, they will still look to enter the UK under the Tier 1 (Investor) category rather than pursuing an economic citizenship route. A number of HNWi’s are put off by the Maltese programme due to the requirement to make a non-refundable ‚Ǩ650,000 contribution, whereas, under the Tier 1 (Investor) route the individual is able to withdraw the ¬£2 million investment once they decide to leave the UK or obtain permanent residence after remaining in the UK for five years under that category. The popularity of the scheme in Cyprus is likely to increase since it has recently reduced the minimum investment threshold from ‚Ǩ5 million to ‚Ǩ2.5 million or ‚Ǩ2 million if the investment is only made in residential property. In addition, it is possible to withdraw the investment after three years. However, the fact that individuals applying under this scheme must retain a property with a minimum purchase price of ‚Ǩ500,000 for life does dissuade many individuals from pursuing this route.

Do you expect that will change after Brexit?
With the prospect of the UK’s withdrawal from the EU, we are expecting more high net worth individuals who were considering the Maltese and Cypriot schemes, but whose ultimate destination is the UK, to look to apply instead under the Tier 1 (Investor) category since, post Brexit, they may no longer be able to rely on the free movement rights that Maltese and Cypriot nationality currently confers to enable them to live long term in the UK.

What trends do you see?

One of the clear trends we are seeing is an increased scrutiny of applications, submitted by both EEA and non-EEA nationals. This has led to more applications being refused and longer processing times as the UK Home Office more frequently requests further documentation in support of applications.
Also, the fees that the UK Government are charging for immigration applications continue to rise on an annual basis, sometimes by significant amounts, and the range of services which attract fees is also on the increase.

This article was published in Citywealth Weekly, our mid-week roundup of topical news and exclusive expert comments.Sign up here to start receiving the Weekly in your inbox.

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