Hot on the heels of the decision in Sajjad comes another mind-bending Home Office decision on Tier 1 (Entrepreneur) visa extensions, this time relating to job creation. 

In R (Khajuria) v SSHD [2019] EWHC 1226, an Indian entrepreneur had created the jobs necessary to extend her visa but her application was refused because she was unable to provide payroll information in the exact form required. 

It is a further reminder for Tier 1 (Entrepreneurs) that getting an extension is not about meeting the requirements of the rules, it is about meeting the rules themselves.

The job creation requirement

One of the core criteria of the Tier 1 (Entrepreneur) rules is that visa holders create at least two jobs lasting 12 months each during their initial period of leave to remain.

It is only through compliance with this requirement — and a few others — that Tier 1 (Entrepreneurs) will meet the eligibility requirements to extend their stay and continue their business interests in the UK.

(Although this visa category has now been closed to new applicants and replaced with the innovator visa route, extensions and settlement applications are still possible.)

As per the relevant Immigration Rules, the claimant in Khajuria had created the required positions.

However, given the nature of the roles Ms Khajuria had created — part-time rather than full-time, where employees were paid less than a certain amount per week — the business of which she was a part did not operate a PAYE system. This is perfectly permissible, as government guidance confirms:

You do not need to register for PAYE if none of your employees are paid £118 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.

Unfortunately, the Immigration Rules require that entrepreneurs applying to extend their leave provide printouts of Real Time-Full Payment Submissions which confirm the report of PAYE income tax to HMRC.

Aaaaaargh

Ms Khajuria’s application was refused by the Home Office because, although she met the underlying requirements of the rules (to create the equivalent of two jobs over the visa period), she had not submitted the required Real Time-Full Payment Submissions which, in her case, did not exist.

She issued judicial review proceedings on the grounds that (i) the decision discriminated against her as a person belonging to a class of business which did not operate a PAYE system (but still created jobs) and (ii) in any event, the Home Office failed to exercise discretion, which it should have done in this case.

No help from the High Court

The judgment of the High Court, in dismissing her application for judicial review, highlights how difficult it is to challenge decisions in these cases.

Giving judgment, Mr Justice Martin Spencer held on the discrimination argument that Ms Khajuria could not be in a class of one. He also ruled that for discretion to be exercised, an application for discretionary leave to remain outside the Rules must be made, for which there is a specified form with a specific fee. As no application had been made, no obligation to exercise discretion arose.

In describing the Points Based System framework the court explained (paragraph 28):

The system operates in such a way as to allow officials in the department to essentially ‘tick boxes’ in relation to any application and if a box cannot be ticked, for example because the required evidence has not been provided, then to reject the application.

The court also endorsed the words of Sir Brian Leveson in Mudiyanselage v SSHD [2018] EWCA Civ 65 who said at paragraph 145 of that judgment:

These are hard edged decisions but the requirements of the PBS, the rules and the guidance are precise. Those who seek to make applications of this nature must take the utmost care to ensure that they comply with the requirements to the letter; they cannot expect discretionary indulgence beyond the very limited areas provided by evidential flexibility.

Whilst explaining that the High Court was powerless to intervene, Martin Spencer J finished his judgment by expressing hope that, if the claimant were to make an application for leave to remain outside the rules, it would be considered sympathetically.

The spirit of the laws?

Ms Khajuria did what a Tier 1 (Entrepreneur) is supposed to do during their initial period of leave: she created jobs for settled workers.

Although not surprising for an immigration lawyer, it is quite literally amazing that so little discretion exists in the decision-making process that this fact could not be recognised.

Ms Khajuria now has to make a choice between returning home with her husband and two young children, having lived in the UK since 2009, or making an application for leave to remain outside of the Rules.

For the whole family the Home Office fees for this application would be £4,132, not including fees for legal assistance, and not including the fees for subsequent extension applications.