It has been observed that the UKBA has recently been refusing Tier 1 Entrepreneur applications by way of reason that those applications do not comply with Immigration rule 41-SD of Appendix A. This has in particular been the case in applications where perspective entrepreneurs and applicants have secured third party funding.
Upon closer look one would realise that the UKBA does not specify whether the application was refused under the provisions of 41-SD (a), 41-SD (b) or 41-SD (c). In other refusals, the UKBA caseworkers have been refusing applications under the wrong sub-paragraphs.
If the rules are looked at closely, then it would become clear that paragraph 41-SD (a) deals with applications where the requisite funds are held by the applicant himself. On the other hand it is indeed paragraph 41-SD (b) which deals with applications where the requisite funds are held not by the applicants themselves, but have been made available to them by way of a third party sponsorship.
The wordings of paragraph 41-SD (a) and (b) differ entirely. This is because paragraph 41-SD (b) categorically states the requirements to be met where funds are available by way of a third party sponsorship. One would note that the paragraph categorically mentions the word ‘third-party’.
The UKBA has been providing reasons such as non-provision of third party’s contact details. They have failed to follow the guidance of the Upper Tribunal in Rodriguez (Flexibility Policy)  UKUT 42 (IAC). One could argue that the UKBA has overstepped its remit when its refuses an application on the assertion that the bank letter does not contain the statement that the funds are transferable to a third party. It is highly unlikely that banks would give such undertakings on behalf of a non-client third party. This would go against the foundations of banks protecting their clients.
The rules also require a declaration from the third party who is sponsoring the applicant. It is hence questionable as to the need to such a declaration if the bank letter should state all these confirmations.
It is our calculation that the UKBA has been merely rejecting applications to address the issue of abuse in this category. However in doing so, the UKBA has not only breached its legal obligations but has also acted in an arbitrary manner. We believe the actions of the UKBA in such circumstances to be unlawful.
If you have received such a refusal from the UKBA and would like to discuss alternative ways to address this and move forward, then please contact us on 0207 242 1666 or at email@example.com