Muhammed Akinci v The Secretary of State for the Home Department

Under paragraph 21 of 1972 Immigration Rules (HC 510), the viability of a proposed business requires an assessment in the round. A realistic plan may anticipate short-term losses or no immediate profit. The decisive question is whether projected cash flow or initial investment is likely to meet business liabilities and the applicant’s living expenses without prohibited employment.

A decision-maker must assess the applicant’s actual financial needs, the realistic prospects for projected turnover, and the scope for adjustment as the business develops. Previous experience may assist in doubtful cases, but it is not a pre-condition. A plan should not be rejected merely because the applicant cannot explain every detail drafted by an adviser.

The appellant, a Turkish national, sought leave to establish himself in a kebab takeaway business under the Ankara Agreement. The Secretary of State refused the application, raising concerns about the purchase price, the appellant’s experience and English language ability, and the viability of the proposal.

The First-tier Tribunal dismissed his appeal. It treated the proposed staffing costs and increased rent as showing that the business could not support him and rejected the suggestion that he should have time to make it succeed.

On appeal, the Upper Tribunal considered whether the First-tier Tribunal had applied paragraph 21 of 1972 Immigration Rules (HC 510) correctly when assessing the viability of the business and the appellant’s ability to support himself.

1. Appeal allowed. The First-tier Tribunal made material errors of law. Its decision was set aside and the appeal was remitted to the First-tier Tribunal for re-making.
2. Paragraph 21 of 1972 Immigration Rules (HC 510) requires a merits assessment of the proposed business. The price of acquisition should make commercial sense and the business plan must be realistic. A substantial projected increase in turnover may justify further inquiry, but it is not by itself fatal.
3. Viability does not depend on an immediate return on the applicant’s investment or an immediate salary. A business may generate sufficient revenue to meet short-term liabilities and support the applicant before it becomes profitable. The correct inquiry is whether likely liabilities and the applicant’s actual personal needs can be met from projected cash flow or the initial investment, without recourse to employment requiring a work permit.
4. A plan is a projection rather than a fixed commitment. Previous experience may assist the assessment of whether turnover can be achieved, but is not compulsory. The First-tier Tribunal erred by applying anticipated additional staff costs to historic figures without deciding whether the proposed expansion would increase turnover. It also failed to identify the appellant’s living costs, despite evidence that they were modest, and wrongly treated the absence of an initial salary as non-compliance with the Rule.

The case was remitted because up-to-date evidence about the business and the appellant’s expenses was required and could be determined more promptly by the First-tier Tribunal.

• Upper Tribunal (Immigration and Asylum Chamber): Allowed the appeal, set aside the First-tier Tribunal’s decision for material legal error, and remitted the case for re-making.
• First-tier Tribunal: Dismissed the appeal against the Secretary of State’s refusal to vary leave to remain.