Dishonesty, deceit and indefinite leave to remain (ILR) visa applications

An application for leave to remain or indefinite leave to remain (ILR) can be refused if the Home Office considers that the applicant has used deception or dishonesty in a previous application. The power to refuse is found in paragraph 322(5) of the Immigration Rules. The case of R (Khan) v Secretary of State for the Home Department (Dishonesty, tax return, paragraph 322(5)) [2018] UKUT 384 (IAC) provides guidance to the Home Office on how to address applications where issues of dishonesty and deception in previous applications arise.

In the case of Khan, the applicant was refused indefinite leave to remain within paragraph 322(5) of the Immigration Rules which deals with the character and conduct of an applicant. The facts of the case are that the applicant had claimed an income of £36,000 in an application for an extension of leave to remain as a Tier 1 General Migrant. However, in her annual self-assessment tax return submitted to HMRC, she declared an income of only £7,650. The applicant subsequently corrected the submission to HMRC prior to lodging her application for indefinite leave to remain and sought to blame her then accountant for the error.

These are very common facts and there is a long stream of cases where the courts have sided with the Home Office in concluding that such ILR cases can correctly be refused under paragraph 322(5) of the Immigration Rules.

Justice Spencer, on hearing an application by Ms Khan for judicial review in the Upper Tribunal has set out some very helpful guidelines on the application. I set the guidelines and paragraph 322(5) out below in full:

Grounds on which leave to remain and variation of leave to enter or remain in the United Kingdom should normally be refused.

322(5) the undesirability of permitting the person concerned to remain in the United Kingdom in the light of his conduct (including convictions which do not fall within paragraph 322(1C)), character or associations or the fact that he represents a threat to national security.”

Justice Spencer held:

(1)   Where there has been a significant difference between the income claimed in a previous application for leave to remain and the income declared to HMRC, the Secretary of State is entitled to draw an inference that the applicant has been deceitful or dishonest and therefore he should be refused ILR under paragraph 322(5). The Secretary of State is entitled to draw that inference where there is no plausible explanation for the discrepancy.

(2)   Where an applicant has presented evidence to show that, despite the prima facie inference, he was not in fact dishonest but only careless, then the Secretary of State is presented with a fact-finding task: he must decide whether the explanation and evidence is sufficient, in his view, to displace the prima facie inference of deceit/dishonesty.

(3)   In approaching that fact-finding task, the Secretary of State should remind herself that, although the standard of proof is the “balance of probability”, a finding that a person has been deceitful and dishonest in relation to his tax affairs with the consequence that he is denied settlement in the UK is a very serious finding with serious consequences.

(4)   For an applicant to simply blame his or her accountant for an error in relation to the historical tax return will not be the end of the matter: far from it. Thus, the Secretary of State is entitled to take into account that, even where an accountant has made an error, the accountant will or should have asked the tax payer to confirm that the return was accurate and to have signed the tax return, and furthermore the applicant will have known of his or her earnings and will have expected to pay tax there on. If, realising this (or wilfully shutting his eyes to the situation), the applicant has not taken steps within a reasonable time to remedy the situation, the Secretary of State may be entitled to conclude either that the error was not simply the fault of the accountant or, alternatively, the applicant’s failure to remedy the situation itself justifies a conclusion that he has been deceitful or dishonest and therefore he should be refused ILR within paragraph 322(5) of the Immigration Rules.

(5)   Where an issue arises as to whether an error in relation to a tax return has been dishonest or merely careless, the Secretary of State is obliged to consider the evidence pointing in each direction and, in his decision, justify his conclusion by reference to that evidence. In those circumstances, as long as the reasoning is rational and the evidence has been properly considered, the decision of the Secretary of State cannot be impugned.

(6)   There will be legitimate questions for the Secretary of State to consider in reaching her decision in these cases, including, but not limited to:

1. Whether the explanation for the error by the accountant is plausible;
2. Whether the documentation which can be assumed to exist, for example, correspondence between the applicant and his accountant at the time of the tax return, has been disclosed or there is a plausible explanation for why it is missing;
3. Why the applicant did not realise that an error had been made because his liability to pay tax was less than he should have expected;
4. Whether at any stage, the applicant has taken steps to remedy the situation and, if so, when those steps were taken and the explanation for any significant delay.

(7)   In relation to any of the above matters, the Secretary of State is entitled to require evidence which goes beyond mere assertion. The Secretary of State should request evidence prior to making a decision but is entitled to draw an unfavourable inference from any failure on the part of the applicant to produce it.

(8)   In any decision the Secretary of State should fully articulate his reasoning setting out the matters which he has taken into account in reaching his decision and stating the reasons for the decision he has reached.

Although dealing with an application for indefinite leave to remain under the Tier 1 General category, the same principles could ostensibly be applied to any case where an issue of dishonesty or deceit arises under paragraph 322(5).

If you would like our help with your indefinite leave to remain (ILR) application, please contact us via our web site or on +44(0)20 7038 3981.