Tribunal decisions

The decision

Upper Tribunal
(Immigration and Asylum Chamber)

Aleem (Pankina - Uplift for overseas earnings) Sri Lanka [2011] UKUT 00120 (IAC)

THE IMMIGRATION ACTS

Heard at Field House
Determination Promulgated
On 1 February 2011

…………………………………

Before

THE HON. MR JUSTICE LLOYD JONES
SENIOR IMMIGRATION JUDGE BATISTE

Between

mohamed mufthi abdul aleem

Appellant
and

THE SECRETARY OF STATE FOR THE HOME DEPARTMENT

Respondent

Representation:

For the Appellant: Mr H Kanangara
For the Respondent: Mr J Gulvin, Home Office Presenting Officer

The requirement by the respondent that an applicant for leave to remain as a Tier 1 (General) Migrant, whose last leave was as a Tier 4 (General) Student), must have physically undertaken work in an overseas country for an uplift to apply to his earnings in that country, is imposed by Guidance only and is not contained in the Rules. Thus, in line with SSHD v Pankina [2010] EWCA Civ 719, this Guidance is ineffective to impose such an additional requirement.

DETERMINATION AND REASONS

1. The appellant is a citizen of Sri Lanka and was born on 12 November 1984.

2. On 20 April 2010 he was granted leave to remain in the United Kingdom as a Tier 4 (General) Student until 12 July 2010. On 12 July 2010 he applied for leave to remain in the United Kingdom as a Tier 1 (General) Migrant. That application was refused by the respondent by letter dated 27 August 2010.

The Law and Guidance

3. The application was governed by paragraph 245C of HC 395 Immigration Rules as amended. Paragraph 245C provides that to qualify for leave to remain as a Tier 1 (General) Migrant, an applicant must meet the requirements listed there. If those requirements are satisfied leave to remain will be granted. The requirements there set out include that the applicant must have the specified minimum number of points under paragraphs 1 to 31 of Appendix A.

The provisions of Appendix A in relation to earnings include the following.

“13. Earnings include, but are not limited to:

(a) salaries (includes full-time, part-time and bonuses),

(b) earnings derived through self-employment,

(c) earnings derived through business activities,

(d) statutory and contractual maternity pay, statutory and contractual adoption pay,

(e) allowances (such as accommodation, schooling or car allowances) which form part of an applicant's remuneration package,

(f) dividends from investments, where it is a company in which the applicant is active in the day-to-day management, or where the applicant receives the dividend as part of their remuneration package,

(g) property rental income, where this constitutes part of the applicant's business, and
(h) payments in lieu of notice.

14. Where the earnings take the form of a salary or wages, they will be assessed before tax (i.e. gross salary).

15. Where the earnings are the profits of a business derived through self-employment or other business activities, the earnings that will be assessed are the profits of the business before tax. Where the applicant only has a share of the business, the earnings that will be assessed are the profits of the business before tax to which to which the applicant is entitled.

………………..

18. Earnings in a foreign currency will be converted to pound sterling (£) using the closing spot exchange rate for the last day of the period for which the applicant has claimed earnings in that currency.

………………..

21. Once converted, earnings will be multiplied by the multiplier shown in table 2A below. The relevant country or territory is whichever country or territory the currency was earned in.

22. A multiplier will not be applied to oversees earnings (if any) of an applicant who has, or was last granted, leave as a Highly Skilled Migrant, Tier 1 (General) Migrant, Writer, Composer or Artist, or Self-employed Lawyer and who is applying for leave to remain.

23. Where the previous earnings claimed are in different currencies, any foreign currencies will be converted and multiplied before being added together, and then added to any UK earnings, to give a total amount.”

Table 2A provides for the application of a multiplier of 5.3 where the money was earned in Sri Lanka.

4. The UK Border Agency published policy guidance in respect of the points-based system under Tier 1 (General). The edition relevant to the application with which we are concerned was published on 6 April 2010. That included the following statements in relation to adjusting overseas earnings.

“131. To reflect differences in income levels across the world, the income level required to score points varies depending on where the applicant was working at the time he/she earned the money. We use a series of calculations (known as uplift ratios) to bring overseas salaries in line with United Kingdom equivalents. The level of uplift we give depends on the average income in the country in which the earnings were made … Table 2A of Appendix A (Attributes) of the Immigration Rules lists countries and the appropriate conversion rate.

132. The country in which the applicant has physically undertaken the work, rather than his/her nationality, the currency payment is made in or the country in which payment is made, determines the income band against which we will assess the earnings.

133. Where an applicant has earnings from more than one country, the points based calculator will apply in the appropriate uplift ratio for each country in which the relevant earnings were made in order to provide a total UK equivalent value of earnings.”

5. By a letter dated 27 August 2010 the respondent rejected the appellant's application. The letter stated in relevant part:

“You have claimed 20 points for previous earnings under Appendix A of the Immigration Rules, but on the basis of the documents you have provided you do not qualify for the award of points in this area.

The reasons for this decision are detailed below.

You have claimed points for earnings of £38,605.20 from self-employment and have supplied financial statements, accountant’s letter, employer (client) letter and tax documents as evidence of these earnings.

…

Also, the income band against which previous earnings are accessed at initial application stage is dependent upon the country in which an applicant has been physically working, rather than the country in which the earnings were paid.

As the earnings you are claiming points for were generated whilst you were working in the UK, no uplift has been applied to them.

We have therefore been unable to award the points, in line with published guidance …”

In addition the respondent decided that certain documents did not meet the requirements of the Immigration Rules.

6. The appellant appealed to the First-tier Tribunal (Immigration and Asylum Chamber). The appeal was heard at the IAC, Sheldon, Birmingham, on 4 October 2010 before Immigration Judge Meah.

7. In a determination promulgated on 5 October 2010 Immigration Judge Meah concluded that the additional documents which had been received were sufficient to satisfy the documentary requirements under the Rules. However, he concluded that the appellant was still not eligible to receive the 20 points claimed under the previous earnings heading. The judge considered that he did not qualify for the uplift for overseas earnings because the work had actually been carried out in the United Kingdom.

8. We note that the argument on this point before the Immigration Judge proceeded on the basis of the policy guidance document. The judge concluded (at page 14):

“… I find that given the appellant’s employment was based and undertaken in the UK, this must count as UK earnings as opposed to earnings from overseas, notwithstanding the fact that he may have been paid and taxed overseas. In other words, I find the physical location of where the employment is undertaken is an important factor in deciding whether an applicant is eligible for an uplift based on claimed overseas earnings.”

9. The appellant applied for permission to appeal to the Upper Tribunal. On 27 October 2010 Senior Immigration Judge Martin granted permission to appeal on the ground that it was arguable that the Immigration Judge erred in failing to apply the uplift to the sums earned by the appellant in Sri Lanka and upon which he paid taxes in Sri Lanka.

10. The appeal came before us on 1 February 2011. For reasons set out later in this judgment we considered that the Immigration Judge had made a material error of law in his decision on the application of the uplift. Accordingly we set aside those parts of the decision of Immigration Judge Meah relating to the uplift (paragraphs 10 to 17) save that we maintained his conclusion that the documentary requirements of the Immigration Rules had been complied with. We then proceeded at the same hearing to remake the decision.

11. There was no issue as to the facts of the matter. The earnings which the appellant claimed should be brought into account under Appendix A included income for consultancy services he had provided to a Sri Lankan company based in Sri Lanka. The appellant was present in the United Kingdom when he actually undertook the work. The services were provided from the United Kingdom by using e-mails and fax. He was paid in Sri Lankan rupees. In this way the appellant earned Sri Lankan rupees 1,200,000.00 gross (Sri Lankan rupees 1,189,500.00 net). The sums were paid to his bank account in Sri Lanka in Sri Lankan currency. He paid the appropriate income tax on these sums in Sri Lanka.

12. The only issue before us was whether this income fell to be treated as overseas earnings to which the uplift applied within Appendix A. It was common ground between the parties that if the uplift applied the appeal must succeed and the application must be granted. On behalf of the appellant Mr Kanangara relies on the decision of the Court of Appeal in Secretary of State for the Home Department v Pankina [2010] EWCA Civ 719. There the Court of Appeal held that only that which enjoys or secures Parliament’s authority – in the present case by the absence of a negative resolution within 40 days after being laid before Parliament – is entitled to the quasi-legal status of Immigration Rules. In that case the particular requirement which had been imposed by the Secretary of State did not form part of the Rules as so laid. The Court of Appeal held that the guidance did not have the legal effect of imposing such a requirement. Sedley LJ explained that statutory recognition of Rules which would have the character and, on appeal, the force of law, requires such Rules to be certain. He considered that that shut out criteria affecting individuals’ status and entitlements which have not themselves been tendered for Parliamentary scrutiny and even if ascertainable at that point of time may be changed without fresh scrutiny. Therefore the additional criterion imposed by the Guidance formed no part of the Rules.

13. It follows from Pankina that the issue in the present case must be determined by reference to the rules and not by reference to any requirements or criteria indicated by guidance which are not contained in the Rules.

14. We consider that the uplift provision contained in paragraph 21 of Appendix A applies. These were earnings derived from self-employment. They were earned in Sri Lanka within the meaning of paragraph 21 of Schedule A notwithstanding the fact that the appellant was not physically present there at that time. The earnings were payment for services provided in Sri Lanka to a Sri Lankan company based in Sri Lanka. They were paid for there in Sri Lankan rupees, in sums credited to the appellant’s account there and they were subject to income tax there. There is no specific requirement under the Immigration Rules, whether expressly or by necessary implication, that the person earning the payment must be physically present there at the relevant time. In the particular circumstances of this case the payment is properly regarded as arising in Sri Lanka.

15. We accept that the Guidelines seek to impose a requirement that the person earning must be physically present in the country concerned at the relevant time. However, that seeks to impose a further requirement which is not imposed by the Immigration Rules themselves. Pankina makes clear that this is not permissible. The Guidance cannot be used in this way to alter the substantive effect of Immigration Rules approved by Parliament.

16. Mr Gulvin did not contend that at the date of the adoption of the relevant provisions in Appendix A there was pre-existing policy guidance to the effect that the applicant must have been physically present in the country concerned at the time the sums were earned. He did not seek to advance any argument on that basis.

17. We note that the other categories of qualifying earnings in paragraph 13 of Appendix A include earnings derived through business activities, allowances which form part of an applicant’s remuneration package, dividends from investments where the applicant receives the dividend as part of a remuneration package and property rental income where this constitutes part of the applicant’s business. As with qualifying earnings derived through self-employment, there is nothing in the Immigration Rules to suggest that there is a requirement that the applicant be physically present in the country where the income arises at the relevant time. Indeed, these categories may well contemplate situations in which a person is not physically present in that jurisdiction.

18. More fundamentally, we consider that the clear purpose of the uplift provision in Appendix A is to attempt to equalise levels of income from different countries in order to secure the fair application of the Immigration Rules. Overseas earnings are, in this way, brought into line with their United Kingdom equivalents. Countries and territories are allocated to different groups within Table 2A and different multipliers apply accordingly. The multipliers are, no doubt, intended to reflect local conditions and levels of earnings. The intention of the uplift is to secure, so far as this may be possible, that income arising in different jurisdictions is considered on an equal basis. The criteria laid down in the Immigration Rules achieve that result. For all the reasons we have given above, the income with which we are concerned in the particular circumstances of the present case clearly falls to be regarded as earned in Sri Lanka, notwithstanding the fact that the appellant was not present in Sri Lanka at the relevant time. It clearly falls within the policy of the rule. It is necessary to apply the uplift in order that it be considered fairly in the application of the Immigration Rules.

19. Mr Gulvin submitted that although the Appellant is not within paragraph 22 of Appendix A, because his last leave was as a Tier 4 (General) Student, the Guidance extends the exclusion of the uplift provided for in paragraph 22 with modifications to Tier 4 (General) Students. However, whatever may have been the intention in issuing the Guidance, this argument cannot succeed because, as Pankina makes clear, Guidance cannot be used to impose on an applicant additional requirements which are not contained in the Immigration Rules themselves.

20. Mr Gulvin accepted that if the physical location of the appellant is not a requirement for the application of the uplift under the Immigration Rules, the appellant would qualify for leave to remain. He did not seek to persuade us that the application would fail on any other grounds.

21. For these reasons we allow the appeal.

Signed

The Hon. Mr Justice Lloyd Jones