The correct approach to paragraph 21 of HC 510 invites consideration of the following matters:
i. The price for acquisition of a business should make commercial sense. An exaggerated price or one which does not reflect in any way the true value of the business may lead to a legitimate enquiry as to the truth of the transaction or the intentions of the parties.
ii. A business plan must be realistic having regard to the nature of the enterprise. It is legitimate to ask further questions where the projected turnover is substantially greater than that reflected in the accounts of the business being acquired.
iii. Even where a business is not expected to be profitable in the short term, revenue generated may well be enough to meet short term liabilities and provide enough for the applicant’s support.
iv. It is important therefore to identify the likely liabilities and what the applicant’s personal needs are in order to see if they can be met out of cash flow or the initial investment. The test is not whether the applicant is going to get a return on his investment but whether what is projected is likely to enable the applicant to pay the bills arising and meet his living expenses.
v. A plan is what it says it is: a projection of how it is anticipated things will work out with the possibility of making adjustments as the business gets under way. It is not a strait jacket.
vi. In doubtful cases an applicant’s previous experience will help inform the decision- maker whether a projected turnover is likely to be achieved, but such experience is not a pre-requisite.
Judges:
Blake J, P, Dawson UTJ
Citations:
[2012] UKUT 266 (IAC)
Links:
Jurisdiction:
England and Wales
Immigration
Updated: 04 November 2022; Ref: scu.463330