Her Majesty's Revenue and Customs (HMRC) introduced the Real Time Information full payment submission (RTI) requirement for Tier 1 entrepreneur extension applications in 2013. The RTI was one of the biggest changes to the operation of payroll since the introduction of Pay as You Earn (PAYE) tax in 1944. It is a system for submitting employee pay, tax and National Insurance information to HMRC. RTI affects the way companies store and communicate data to HMRC and involves submitting payroll data electronically to HMRC whenever employers pay their employees. The introduction of RTI also simplifies year-end procedures.

The RTI requirement has been described in the Home Office policy guidance for Tier 1 entrepreneurs as 'prescribed' and thus mandatory. Until this point, the evidential burden on the entrepreneur was to provide documents in respect of PAYE as per standard accounting practice together with evidence as listed in the Immigration Rules at the time.

According to the current version of the Immigration Rules, entrepreneurs must provide the following:

"evidence to show the applicant is reporting Pay As You Earn (PAYE) income tax appropriately to HM Revenue & Customs (HMRC), such as printouts of Employee Payment Records, Real Time Full Payment Submissions (either a series of individual monthly submissions including the first submission or summaries), or original HM Revenue & Customs P45 or P46, which either together or individually show the total payments made to the settled workers, as well as the tax deducted and date which they started work with the applicant's business".

The "or" in the quotation above does not refer to the alternative evidence available for submission. The second part of the paragraph refers to those employees whose PAYE was recorded before the introduction of RTIs in 2013. For all Tier 1 entrepreneurs relying on job creation after October 2013, RTIs are required.

In order to produce RTIs, an applicant must log into the HMRC portal using their gateway log-in details and click "Real Time Information". This will enable the applicant to browse all RTI submissions for the tax year and for previous years by clicking "Previous Submissions". If the RTIs are not submitted as part of the immigration application, the application is likely to be refused by the Home Office. Submissions for Tier 1 entrepreneur leave to remain or indefinite leave to remain are generally burdensome and it is imperative to ensure that all documentation is provided in the prescribed format.

For further information on this topic please contact Kamilla Kelemen at Magrath LLP by telephone (+44 20 7495 3003) or email (kamilla.kelemen@magrath.co.uk). The Magrath LLP website can be accessed at www.magrath.co.uk.

Note: This update was drafted prior to the changes in Immigration Rules on November 24 2016 and elaborated on the position which has been now clarified and incorporated in the latest version of the Immigration Rules.

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