According to Brokeshire and the Home Office, there is evidence that foreign national graduates are transferring from Tier 4 (Student) visas to Tier 1 (Entrepreneur) in order to stay in the UK. Although they hold a visa which gives them entrepreneurial power, the visa holders are actually working with another employer and not running a business. In an effort to crack down fraud visa acquisition, the Home Office is placing stricter regulations on application process of the Tier 1 (Entrepreneur) visas.
The visa frauds were uncovered when inspections were made on tax records. According to the records, some Tier 1 (Entrepreneur) visa holders were not managing their own business, but they were working for another employer. These activities are against the requirements to hold a Tier 1 (Entrepreneur) visa.
In order to apply for the Tier 1 (Entrepreneur) visa, applicants must submit a business plan to prove eligibility. However, some of these business plans were proven to be false, according to the government’s close inspections. In addition, these bogus business plans did not meet the investment requirements necessary to qualify for the Tier 1 (Entrepreneur) visa.
Now, if one wants to obtain a Tier 1 (Entrepreneur) visa, the applicant must meet specific guidelines in order to qualify. These guidelines are more strict in order to stop applicants who have no intentions of running a business. The document regarding the changes was published on July 10th, 2014. The changes were initiated on the next day, July 11th, 2014.
The surge of Tier 1 (Entrepreneur) visa frauds was a result of the closing of Tier 1 (Post Study Work)
visa that occurred on 2012. Before the closure of the visa, foreign national students were allowed to stay in the UK by transferring from Tier 4 (Student) visa status to Tier 1 (Post Study Work) visa. This gave the recent graduates an opportunity to stay in the UK and work for 2 years.
The closure of the Tier 1 (Post Study Work) visa was decided by the Coalition government in order to decrease the net immigration in the UK. Hence, in April 6th, 2012, applications for the Tier 1 (Post Study Work) visa was no longer being accepted. Nevertheless, the visa lasted for 2 years, so visas that were still active before the closure of the visa would remain valid for the rest of the duration.
The Tier 1 (Post Study Work) visa was a useful resource for immigrant students. After their graduation from a UK university, those who held a Tier 1 (Post Study Work) visa were allowed to stay without the
sponsorship by a licenced employer. The visa also gave them the benefit of setting up their business that Tier 1 (Entrepreneur) visas already provided.
It was definitely important for recent graduates who were seeking to stay in the UK as the visa afforded ample time to graduates to seek permanent employment. If the recent graduates were able to receive sponsorship from a licensed sponsor, the graduate would qualify for a Tier 2 (General) visa. By acquiring the visa, the employee would be allowed to stay in the UK for 5 years and 14 days.
This system had a positive impact in immigration retention. However, it was not conducive to the Coalition government’s goal in decreasing net immigration. Therefore, reform was made to stop recent graduates who are of foreign national origin from remaining in the UK. By eliminating the Tier 1 (Post Study Work) visa, the Coalition government hoped that foreign national graduates would be forced to return to their country.
Their expected result was not the case as many have routed their efforts to Tier 1 (Entrepreneur) visas in order to stay in the UK.
The strict regulation and guidelines of the Tier 1 (Entrepreneur) visa was immediately implemented in order to deter a surge of applicants. They predict that a sudden surge of applications would occur if a 21 days notice was given. The immediate closure of the visa was performed to shut the doors, before an applicant can quickly take benefits of the lenient regulations which will not be available after the 11th of July.
The surge was predicted after a similar event occurred after the closure of the Tier 1 (Post Study Work) visa. When the government gave a 21 day notice of the visa’s closure, 3,000 applications were submitted before the closure occurred. Therefore, the government predicted that applicants for the Tier 1 (Entrepreneur) visa would increase. The sudden implementation of the strict regulations were immediately executed with the hopes that they can avoid foreign national students from taking advantage of the lenient regulation of the Tier 1 (Entrepreneur) visa.
Although the intention of government’s decision was stop to Tier 1 (Entrepreneur) visa fraudulence, the phenomenon was merely a consequence of the government’s efforts to stop the increase of immigration retention in the UK. By closing the Tier 1 (Post Study Work) visa, recent graduates were forced to take other measures in order to secure their place in the country. Therefore, the Tier 1 (Entrepreneur) visa incident was part of a domino effect, caused by UK immigration efforts to deter foreign nationals from staying in the country.