Category A or B, F or G? [UK Visa Financial Requirements Guide]

FREE UK Partner Visa Video Series

Video 2 of our 3-part free video series discusses Category A, B, F & G in length.

It also discusses:

  • Other aspects of the financial requirement
  • The online application form
  • Document translations
  • The adequate accommodation requirement
  • The English language requirement
  • Dependent children requirement
  • The unmarried partner visa requirement
  • Other partner visa requirements

Introduction

In order to meet the financial requirements of Appendix FM of the Immigration Rules, you must identify the correct category that you wish to rely on.

If you get this wrong, the most likely outcome is that your application will be refused.

Luckily, this user friendly guide has been designed to make your UK Immigration application journey that little bit easier!

This article applies to the following visas:

uk spouse visa full legal representation

This article will therefore talk about:

What are Categories A and B?

What are the differences between Category A and Category B? 

Should I apply under Category A or B?

What are Categories F and G? 

What are the differences between Category A/B and Category F/G?

part 1

What are Categories A and B?

We will first discuss Category A.

What is Category A?

Category A is generally for those who want to rely on employment that has been held for 6 months or longer at the date of application.

The date of application is the date the Home Office fees are paid on the spouse visa UK 2020 application form.

This employment can be either salaried or non-salaried employment.

“What are the differences between salaried and non-salaried employment?”

Salaried employment, on the one hand, is paid at a minimum fixed rate (usually annually) and is usually subject to a contractual minimum number of working hours.

Non-salaried employment, on the other hand, includes employment that is normally paid at an hourly or other fixed rate.

Alternatively, the pay can vary according to the amount of work undertaken.

For many non-salaried employees, the pattern and/or number of hours required to be worked may also vary.

It is also very important to know that Category A income is for those who receive income from a non-specified limited company only.

“Is my employer a specified limited company?”

If shares in the employing company are not held (either directly or indirectly) by you, your partner or by family members of you and your partner, then the employing company is not going to be a specified limited company.

Since the specified limited company and non-specified limited company distinction really is an important one, we recommend reading this specified limited company article which provides step-by-step instructions to help you find out whether the employer is a specified limited company or not.

If you prefer information in a video format, we go through this step-by-step in video 2 of our video series.


What is Category B?

Category B is generally relied on by two types of employees.

Firstly, it is relied on by those who have been with the current employer for fewer than 6 months when the online application is submitted and the Home Office fees are paid.

Secondly, it is relied on by those who have been with the current employer for longer than 6 months but do not meet the financial requirement due to the way in which Category A gross annual income from employment is calculated.

Like Category A, this employment may be salaried or non-salaried employment.

In addition to this, Category B income can only be relied on if the income is not from a specified limited company.

More information on the specified limited company and non-specified limited company definition can be found here.


part 2

What are the differences between Category A and Category B?

There are 6 main differences between Category A and Category B, which we will discuss below:

#1 The gross annual income is calculated differently.

Category A

Category A has two ways to calculate the gross annual income from employment that you can include towards the financial requirement.

As our spouse visa UK financial requirements in 2020 article discusses in much more detail, this will depend on whether the employment is salaried or non-salaried.

Category B

Category B, on the other hand, calculates gross annual income in a completely different way to Category A.

Category B also has two ways to calculate gross annual income from employment but Category B is a two-stage test.

More information on this two-stage test can be found here.


#2 The relevant financial period is different.

The relevant financial period that the gross annual income from employment is based on is different.

Generally speaking, Category A is based on the 6 months’ prior to submitting the spouse visa UK online application whilst Category B is based on the 12 months prior to submitting the online application.


#3 Category B allows income from previous employers. Category A does not.

Category A can only include employment income from current employer(s).

Category B can include employment income from both current and previous employer(s).


#4 Category B has two financial tests that must be met. Category A has one calculation that must be met.

As we briefly mentioned above, Category B is slightly more complicated than Category A.

More information on this can be found here.


#5 Unlike Category A, Category B has some restrictions regarding including cash savings. 

Cash savings cannot be combined with part 2 of the Category B two-stage test.

More information on this can be found here.


#6 Category B does not require a minimum length of employment.

Category A requires employment to have been held for at least 6 months with the current employer on the date of application.

Category B does not require applicants to have held employment for at least 6 months on date of application.

In fact, it is possible to meet the financial requirement even if the employed partner has been employed for only 1 month in the 12 months prior to submitting the online application.

part 3Should I apply under Category A or Category B?

You should first check if you can meet the financial requirement under Category A.

If you can, then you do not really need to familiarise yourself with Category B.

In practice, Category B is only really relied upon when the financial requirement cannot be met via Category A.

Category A is usually the preferred option because:

  • The requirements are more straightforward;
  • The calculation of the gross annual income from employment is simpler;
  • The Home Office decision makers are more familiar with Category A; and
  • The financial supporting documentation is less extensive.

To calculate what category is right for your circumstances, follow these steps:

STEP 1 – Specified limited company or non-specified limited company?

If you want to include employment income, you MUST check if the employer is a ‘specified limited company’.

Why is this important?

  1. The calculation will be completely different; and
  2. Different supporting documents will be required.

This is a common oversight that partners make which often results in partner visa applications being refused.

If the income you are relying upon is from a non-specified limited company, follow the instructions on step 2 below.
If the income you are relying upon is from a specified limited company, go to part 4 of this article that discusses Category F and G in more detail.

STEP 2 – Ensure that the employment is not actually self-employment

So now that you are sure that the income you are relying upon is not from a specified limited company, the next step is to ensure that the employment is not actually self-employment under the UK Immigration Rules.

“Am I self-employed or employed?”

You should consider the following in order to determine the answer to this:

#1 The definition of self-employment under the Immigration Rules 

Self-employment is defined very specifically in the Immigration Rules.

Self-employed persons are only those who are self-employed:

  • As a sole trader;
  • As a partnership; and
  • In a franchise.

#2 Pay slips are usually issued to those who are employed.

Invoices, on the other hand, are generally submitted for self-employed persons to receive pay for their services.

#3 In order to include income as employment income under Category A/B, this must be confirmed by a letter from an employer.

This letter must explicitly confirm employment status.

This is significant as many companies prefer outsourcing work to self-employed persons as there are usually less costs and obligations involved.

#4 The HMRC’s guidance on self-employment

According to the HMRC person is self-employed (as opposed to employed) if:

  • The person is not paid through the Pay As You Earn (PAYE) scheme
  • The person does not have the rights and responsibilities associated with employees
  • The person is responsible for the success and failure of the business
  • The person uses their own money and resources to invest in business related assets, pay the associated running costs of the business including the purchasing of tools and equipment for the work

If you are unsure about your employment status, the following are links that can be used in order to contact the HMRC to seek clarification:


STEP 3 – Consider the Category A requirements

So now that you are sure that:

  • you are not employed by a specified limited company; and
  • you are not self-employed…

…the next step is to consider the Category A requirements.

#1 Only employment income from current employers can be included under Category A

You cannot include employment income from previous employers under Category A.

If you want to include employment income from both current and previous employers, both must be included under Category B.

#2 Only employment income from employment that has been held for 6 months or longer can be included under Category A 

If one source of employment income that you want to include towards the financial requirement is from employment has been held for fewer than 6 months with the current employer, you can either:

  • Apply under Category B; or
  • If possible, wait until all sources of current employment income have been held for at least 6 months and then submit the application under Category A.

#3 Only employment from non-specified limited companies can be included under Category A

Employment income from a ‘specified limited company’ must be included under Category F or G, not Category A (or B).

“Can Category A and B be combined?”

Category A cannot be combined with Category B. Therefore:

  • If you wish to include income from two employers where one employment has been held for fewer than 6 months whilst the other has been held for longer than 6 months on date of application, then in order to include earnings from both employers, Category B must be relied on.
  • Similarly, if one partner has been employed for longer than 6 months whilst the other has been employed fewer than 6 months, and you wish to include income from both the applicant and sponsor, then Category B must be relied on.

#4 You must meet the financial requirement based on how Category A is calculated.

More info on that can be found here.


STEP 4 – If you do not qualify under Category A, check if you can qualify under Category B

#1 Only employment from non-specified limited companies can be included under Category B

Employment income from a ‘specified limited companymust be included under Category F or G, not Category B (or A).

#2 For partners who are employed inside the UK, they will need to be employed at the date of application

The date of application is the date that the online application is submitted and paid for.

“What if the sponsor is employed overseas and is returning to the UK with the applicant if the visa is granted?”

A sponsor who is overseas and returning to the UK with you does not need to be in employment on date of application.

Instead, the financial requirement must be met and evidenced in two parts:

First part

The first part is that the sponsor must have a confirmed offer of salaried or non-salaried employment starting within 3 months of their return to the UK.

The gross annual income of this employment must meet or exceed the financial requirement, or meet or exceed the financial requirement in combination with another income category.

Second part

The second part is that the sponsor returning to the UK must have also received in the 12 months prior to the date of application the level of income required to meet the financial requirement, based on:

  • The sponsor’s gross amount of salaried or non-salaried employment income overseas;
  • The gross amount of any specified non-employment income received by you, your sponsor or jointly, as long as this source of income is still being received; and
  • The gross amount of any State (UK or foreign), occupational or private pension received by you or your partner.

Essentially, this means that:

a) Your sponsor has a confirmed employment position starting within 3 months of their return to the UK; and

b) In the 12 months prior to the date of your application, you, your sponsor or jointly must have received the level of funds applicable to your circumstances by the permitted sources (remember, unless the adequate maintenance requirement applies – £18,600 is the minimum level of funds normally required to meet the financial requirement).

#3 – You must meet the financial requirement based on how Category B is calculated

The calculation of including gross employment income under Category B is discussed in more detail here.

“Can I apply for Category B even if I qualify under Category A?”

Yes.

Even if you qualify under Category A, you will be permitted to apply under Category B.

Spouse visa DIY Application Pack

part 4

What are Categories F and G?

What is Category F?

Category F is for two completely different types of income sources.

The first type is employment and dividend income from a specified limited company.

The second type is self-employment income as a:

  • Sole trader;
  • Partnership; or
  • Franchise.

How is Category F income calculated?

Income source #1 – Specified limited company income

The amount of specified limited company income that you can include towards the financial requirement is the gross amount of employment and/or dividends received in the most recent full financial year (as stated in the CT600 Company Tax Return document).

For a more detailed breakdown of how to calculate the figure that can be used towards the financial requirement, check out video 2 of our free video series, as well as this article here.

Income source #2 – Self-employment income

The amount of income that you can include from self-employment income is the the gross taxable profits from the self-employed person’s share of the business in the relevant financial year.

This ‘gross taxable profits‘ figure does not include “any deductible allowances, expenses or liabilities which may be applied to the gross taxable profits to establish the final tax liability”.

If, like me, you are unfamiliar with UK accounting terms, the best person to ask will be the self-employed person’s accountant who will be able to give you an exact figure based on the most recent set of accounts.

“What is the most recent full financial year for self-employed persons in the UK?”

For self-employed persons in the UK, the most recent full financial year will be the most recent 6 April  – 5 April personal tax return period.

For example, if you submit the application on 7 April 2020, the most recent full financial year will be 6 April 2019-5 April 2020.

On the other hand, if you submit the application on 1 April 2020, the most recent full financial year will be 6 April  2018 – 5 April 2019.


What is Category G?

The main difference between Category F and Category G is the relevant financial period:

  • Category F’s relevant financial period is the most recent full financial year; whilst
  • Category G’s relevant financial period is the most recent two full financial years.

Since Category G add’s additional layer of complexity (as well as requiring much more documentation), Category G is rarely relied on.

How is Category G income calculated?

Step 1 – Identify the relevant financial period

As we discussed above:

  • For self-employed persons this will be the two most recent self-assessment tax year periods (6 April – 5 April);
  • For those relying on income from specified limited companies, this will be the specified limited company’s two most recent full financial years.

Step 2 – Calculate a ‘mean average’ of the most recent two full financial years

You will then have to calculate the mean average based on the two most recent full financial years.

Self-employed income

  • Total (add) the “gross taxable profits from their share of the business in the relevant financial year(s), not including any deductable allowances, expenses or liabilities which may be applied to the gross taxable profits to establish the final tax liability” from the most recent two full financial years (6 April – 5 April);
  • Divide this figure by 2;
  • This will be the figure that you can include under Category G.

Specified limited company income

  • Total all of the gross employment and gross dividend income received in the last two full financial years (as stated by the two most recent specified limited company’s CT600 documents);
  • Divide this figure by 2;
  • This will be the figure that you can include under Category G.

part 5
What are the differences between Category A/B and Category F/G?

There are 6 main differences between Category A/B and Category F/G.

We will discuss these below.

#1 The relevant financial periods are different.

Category A

The relevant financial period is the 6 months prior to submitting the online application.

Category B

The relevant financial period is the 12 months prior to submitting the online application.

Category F

The relevant financial period is the most recent full financial year.

As we discussed above, for self-employed persons, this is the personal tax year of 6 April – 5 April.

For those who receive an income from a specified limited company, this is the specified limited company’s most recent full financial year (as stated by the CT600 Company Tax document).

Category G

The relevant financial period is the mean average of the two most recent full financial years.


#2 The required documentation is different

Categories F and G require documentation relating to the employing limited company or companies company accounts.

Categories A and B, on the other hand, do not.

With this being said, for those relying on income under Category A or B, it is recommended to provide evidence to show that the employing limited company is not a specified limited company.


#3 Cash savings cannot be combined with Category F and G income

Category A

Category A allows income to be combined with cash savings.

Category B

Category B only allows income to be combined with cash savings in relation to part 1 of the 2 part test.

Cash savings cannot be combined with part 2 of the 2 part test for Category B income (as discussed in our Cash Savings Guidance for 16000 – 62500+ Spouse & UK Partner visas in 2020 article).

Category F and G

Category F and G strictly prohibit combination with cash savings.

This is because paragraph 9.3.11. of Appendix FM 1.7 states that combining cash savings with income under Category F or Category G would not be an accurate indicator of the real level of financial resources available on date of application.


#4 Category A and B can be combined with Category F.

On the other hand, self-employment income (under Category F/G) cannot generally be combined with Income from a specified limited company (although we discuss an interesting case study in part 4 of this article where self-employment income was successfully combined with specified limited company).


#5 Only employment income can be included under Category A and B.

Under Category F, if the person is self employed, then gross profits from self-employment can be included.

If the person holds shares of a specified limited company, in addition to employment income, they can also include dividend income from that specified limited company.


#6 Categories A and B will not require you to have an accountant.

Categories F and G will require that your accounts are drawn up by an accountant who is a member of a UK Recognised Supervisory Body (as defined in the Companies Act 2006) or who is a member of the Institute of Financial Accountants.

 

Conclusion

The Immigration Rules and Home Office guidance can be tricky to navigate!

We hope this article is helpful and it clarifies the main differences between Category A, B, F and G for you.

This distinction between categories is something that is important to understand fully, as getting this wrong can unfortunately result in the refusal of your application.

We are an OISC regulated immigration law firm and we offer a selection of immigration related legal services.

Those of you who wish to employ an accomplished and capable immigration lawyer to handle your case from start to finish, we offer a full legal representation service for a fixed fee of £1,850.

If you would like to opt for a cheaper method and submit the application yourself, our DIY Application Pack Service will provide you with a:

  • Detailed and tailored document checklist (which also details some typical visa mistakes to help you out);
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Since the results from our customers has been so overwhelmingly positive, we offer a 100% money back guarantee.

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