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Thread: Proving sponsors self employed income under parent category

  1. #1
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    Default Proving sponsors self employed income under parent category

    Has anyone had an experience of this?
    We have been selected under tier 1 and are in a little dilemma. Whilst we believe we can achieve the $500,000 settlement fund levels by selling our house and using all our savings, our preferred option would be to use our daughter and son in laws incomes mainly due to the current poor exchange rates but we are concerned as most of his income is gained via being self employed. He has only been in business for 12 months and therefore only has accounts for 1 year - would this be acceptable by INZ or would they want more evidence? We are worried that if we were rejected at the last minute and had to reapply using our own settlement funds that it would take another 2 years - is it possible to tick both boxes??????h

  2. #2
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    The INZ operational manual has this.

    F4.40.25.1 Evidence that the sponsor and/or their partner meets the minimum income requirement

    Evidence of meeting the minimum income requirement for sponsors (see F4.30.10 and F4.35.1) may include, but is not limited to, original or certified copies of the following documents:

    an Inland Revenue Summary of Earnings which shows all income from employment, pension and withholding payments; or
    wage slips; or
    a current employment contract; or
    bank statements or any other documents from financial institutions.
    http://www.immigration.govt.nz/opsmanual/ Go to Residence>Family Categories>F4 Parent Category.

    So it doesn't give any indication of how they would view your s-i-l as a recently self-employed person. Sorry not to be of more help.

  3. #3
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    Hi guys,

    I want to apply for my Parents Residency in Tier1 category...my question is regarding our ( me & my partner) income, my partner earns annually $50734 and from my part time job I get yearly $25000 and have also 2 months back started sole trader structured business which will be $15000 a year. This all figures comes to $90000 plus but ...business which I started 2 months back will immigration consider that if I want to lodge my EOI in September 2014. Please help me friends ...I asked Immigration but always gets confusing answers....same with the Lawyers...!!

  4. #4
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    I'm sorry - this answer is not going to be what you want to hear. The clue that you have a problem is in that word, 'prove'. You want to claim $15000 a year, but you can't yet show INZ that you will have that amount of money as income (not turnover) from your business. The requirements http://www.immigration.govt.nz/migra.../eoi/tier1.htm state that one of the sources of income they will allow is regular self-employment (my bolding). That means that any CO, when checking paperwork, has to be able to see evidence showing that the sponsor has personal income of that amount of money each year (not turnover of the whole business), over several years of operation of their business. You aren't going to be able to provide this after less than a year in operation, which means that you won't meet the requirements to be able to sponsor your parents in this coming September.

    This is all set out in F4.30.1 here. http://www.immigration.govt.nz/opsmanual/ (Residence Family Categories F4 Parent Category F4.30 Additional requirements for tier one of the Parent Category)

  5. #5
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    Thanks for the reply....its a Community Help Business like cleaning, cooking, babysitting or companionship and etc...I have got couple of regular clients and what ever money I get I deposit it in my Sole trader (trading as my name) Business bank ac. Is this income not my personal income? Just for e.g I get check in my name for $300 a week (Regular) X 52 weeks a year = $15600

    And looking at EOI form the question is asked HOW MUCH IS YOUR ANNUAL INCOME ....so I guess they are not concern about last years income but what are you going to earn this year...! I hope I am correct...LET ME KNOW YOUR VIEWS ON THIS PLEASE....THANKS AGAIN..

  6. #6
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    Is this income not my personal income?
    No, it's not your personal income in accounting terms - that's the business's income, but the business has expenses to be set against that, such as (and I'm guessing here for your situation) advertising, transport and cleaning materials. What counts as your personal income is your 'drawings' from the business, which is what you pay yourself for your own use, and it can't be all of what the business took in, because of those expenses that have to be paid out.
    I get check in my name for $300 a week (Regular) X 52 weeks a year
    You have not been trading for a year yet, so you cannot show what you will get every week regularly for 52 weeks a year.
    I guess they are not concern about last years income but what are you going to earn this year
    Sorry, this is wrong. INZ won't take notice of predictions, e.g. they won't allow points for a qualification when someone is doing the course but it doesn't finish till after the application, or count three years' work experience when the person posting the forms has worked two years and eleven months. So you have to be able to show them a track record of a certain amount of annual income.

    This is set out on that last link I gave you. This isn't going to play for the timing you wanted. Sorry.

    The gross minimum income requirement referred to in (a) above must be met by personal income that is obtained from one or any combination of:

    sustained paid employment; or
    regular self-employment; or
    regular investment income.

    The minimum income requirement must be met by personal income. Income earned by another legal entity, such as a business or a trust, cannot be included unless it has been paid directly to the sponsor and/or their partner in the form of wages or drawings.
    When assessing whether the income obtained from the source(s) in (b) above is sustained and/or regular, officers may consider, but are not limited to, such factors as the length of employment, terms of employment and the regularity of payments.

  7. #7
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    the only other option I have is to find a job that gives me annually $40000 as my + wife earns $50734 a year.

    But do I need a full time job contract ...does it matters? Can casual/on call (permanent) work be considered by Immigration

    our earnings details as under ..if you have any other option for me...

    Year 2012-2013 $47000 (Wife) + $33000 (mine)

    Year 2013-2014 $55000(wife) + $25000 (mine)

    Can you give me your thoughts on this please...or any other way out...thanks
    Last edited by pat79; 27th March 2014 at 05:15 PM.

  8. #8
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    No, it's not your personal income in accounting terms - that's the business's income, but the business has expenses to be set against that, such as (and I'm guessing here for your situation) advertising, transport and cleaning materials. What counts as your personal income is your 'drawings' from the business, which is what you pay yourself for your own use, and it can't be all of what the business took in, because of those expenses that have to be paid out.

    SOLE TRADER BUSINESS = YOU!

    any money you make from the business is considered income to you personally, and any expenses white running your business is a tax deduction.

    ACCORDING TO NZ IRD WEBSITE: https://www.ird.govt.nz/how-to/taxra...tradertax.html


    How does being a sole trader work?

    A sole trader usually has no formal or legal processes to set up the business. The owner/manager is personally entitled to all profits, but is also personally liable for all business taxes and debts.

    What are the tax rates for sole traders?

    A sole trader is taxed at the individual tax rates.


    What are "drawings"?

    If you are a sole trader you're probably not paying yourself a wage, but simply taking money from the business when you need it for personal use. These takings are called drawings. They are:
    •a part of your profit and taxed accordingly
    •not a deductible business expense when calculating your profit.

    Record your drawings in your cashbook so that you can reconcile your cashbook with your bank statements, ensuring that there is enough money in the business to cover any bills owing.
    !

  9. #9
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    You're quoting from the Inland Revenue. Their definitions don't work in all circumstances in the same way as for Immigration NZ.

    I knew you wouldn't like what I was telling you. I'm not the authority - I'm just the person who has read the regulations a lot, and has read other people's experiences as they have turned up on these threads. Many people, like you, know what they want to do, and then they find out what the rules say. There are many unhappy old threads where people argue on here what they think the rules ought to be (for them to get in). However, COs aren't given any discretion, and can only go by the rules. If your parents apply in September, with your details as sponsor, as given above, I think the application is going to be rejected.

    Again, I know this isn't what you want to do, but you would have a better chance of being accepted if you wait to sponsor them till you have at least a year's record of self-employment earnings to show.

    For everything with INZ, you have to have paperwork proof of every point - they can't just take your word for your expectations. You know you are a decent person, but INZ represents NZ law, they are a bureaucratic system, and they have to tick boxes to show everything has been verified.

    About employment, contracts, etc.. If you were employed and your fixed basic salary was set out in the agreement with your employer, then INZ could accept that you would now be getting that per year. If you were doing permanent on-call casual work, by which I assume you mean you would be paid for what hours you ended up putting in, you could again find yourself up against the need for INZ to see a record of earnings for at least a year before they could accept that $x can be relied on as your annual income.

  10. #10
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    I completely agree with you....my friend ..thanks for making me understand such things...I will wait for a year to show INZ that I am earning regular and sustained income from self employment and paid employment. And also maintain all the paperwork (Invoices, expenses etc.) for INZ
    hope this works...

    Thank you my friend ...if needed I will come back to you..

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