How To Challenge A Tax Discrepancy And Paragraph 322(5) Refusal

By Dr Lusine Navasardyan

Dr Lusine Navasardyan is Director and Head of Corporate and Business Immigration at RVS Solicitors. Dr Lusine studied at Yerevan State University and the Bucharest University of Economic Studies. She is also a published author and a member of the Bucharest Bar. As a Director of RVS Solicitors, she is instrumental to the operation of the law firm, and as Head of Corporate and Business Immigration, she helps our clients to forge new futures in the UK.

The UK Home Office has much to be ashamed about regarding its conduct around how it has treated immigrants over the past five years or so. From the Windrush scandal to refusing Permanent Residency status for EU nationals who have called the UK home for decades, many innocent people have had their lives turned upside down due to the ‘hostile environment’, originally designed to discourage illegal migrants from remaining in the UK, but has inevitably resulted in blameless victims being caught up in its web.

One of the most insidious examples of this is the use of paragraph 322(5) of the Immigration Rules being used against hundreds of highly skilled migrants in an effort to deny them Indefinite Leave to Remain (ILR) and remove them from the UK.

The paragraph is a discretionary, terrorism-related clause that the Home Office’s internal guidance states should only be used when the applicant’s misconduct is on a par with “criminality, a threat to national security, war crimes or travel bans”. However, it has been extensively reported in the media that the Home Office has weaponised the section to remove professionals such as doctors, teachers, and engineers who have made minor and legal amendments to their tax records or having discrepancies in declared income.

What makes the use of paragraph 322(5) of the Immigration Rules even more devastating is that appeals can take many years, during which time the applicant cannot rent a house, work, or use the NHS. And cruelly, victims are caught in a double bind, as if they fail to appeal and accept the allegation and decision, they may find it impossible to obtain a visa for another country.

“The damage they have done to me is irreversible”

The Guardian newspaper recently reported the story of Nisha Mohite, a specialist who works in the UK on the development of anti-cancer and anti-psychotic drugs. In 2016 she applied for ILR and was refused under paragraph 322(5) because of a tax amendment.

Ms Mohite’s accountant made a mistake in her 2010-11 tax return, resulting in her self-assessment tax return showing an incorrect income, even though she had paid all the tax she owed. As soon as the error was discovered in 2013, Ms Mohite immediately paid the money owed. However, when she applied for ILR, the Home Office said the amendment was evidence of dishonesty and rejected her application.

After a ferocious legal battle with the Home Office, Ms Mohite received her ILR. However, she told the Guardian that she is “furious and frustrated that the Home Office insisted on fighting through court after court, wrecking my life despite me proving repeatedly this was all an honest mistake. The damage they have done to me is irreversible.”

How is paragraph 322(5) used to refuse settlement applications?

Those most affected by having their ILR application refused on the grounds of paragraph 322(5) hold a Tier 1 (General) Visa which was aimed at highly-skilled migrants who could become self-employed or employed without the need of a sponsor.

The last date to apply for ILR under this now defunct visa was 6 April 2018. Many still have applications pending or have reached ten years’ continuous lawful residence in the UK and are making an ILR application under this route.

Paragraph 322(5) says that an application for leave to remain should normally be refused where:

“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.”

The Home Office has stated that the settlement applicants it has refused under this section have either declared a reduced income in order to pay less tax or inflated their income so they could apply for ILR. This conduct is seen to make it undesirable for them to remain in the UK.

The main argument against the use of this section is that it was never intended to cover tax discrepancies, instead it was meant to prevent those who had links with terrorism or were a threat to national security from gaining settlement. And even though the provision is a discretionary one, ILR has been refused by caseworkers for the simplest, most genuine of mistakes, where the discrepancy has been immediately rectified by the applicant.

UK Government internal review of its use of the controversial 322(5) provision

An internal review of the use of paragraph 322(5) of the Immigration Rules, the results of which were published late last year, showed 65% of Home Office 322(5) decisions were thrown out by the First-Tier Tribunal while 45% of applicants were successful at Judicial Review, against an ordinary applicant success rate of 28%. An extra 32% of “complex cases” could be wrongly decided, the review said.

The review also revealed that across all immigration categories refusal of settlement applications was 5% until mid-2015 when it increased to 52% for Tier 1 (General) migrants. Paragraph 322(5) of the Immigration Rules has been a central reason given for the Home Office’s refusal of those in this group.

How to challenge an ILR refusal under paragraph 322(5)

If you have a genuine explanation for varying income on your tax return, as was the case with Ms Mohite, or, after all circumstances are considered, you believe it would be disproportionate to remove you due to tax discrepancies, you should contact an experienced immigration solicitor as soon as possible.

One possible solution is to apply for an Administrative Review of the decision. Should this fail, an application for an appeal may be made under human rights grounds. Alternatively, an application for Judicial Review may be made on the grounds the refusal was “unlawful” or “irrational”.

In summary

Being refused ILR on the grounds of tax discrepancies is highly distressing, especially for people who have spent their life obeying rules, only to be suddenly told that they cannot continue to live in the UK because they are “undesirable”. To ensure you do not become a victim of this draconian Home Office policy, speak to an immigration solicitor as soon as possible.

If you have any questions regarding the issues in this article, please call us on 020 3893 2547 or contact us online.