Muhammad Nadeem Arshad v Secretary of State for the Home Department

An application made before 1 October 2013 was governed by the earlier version of paragraph 41-SD of Appendix A to the Immigration Rules. A tribunal's application of the later version was erroneous, but the error was immaterial where independent findings necessarily required dismissal.

A Tier 1 (Entrepreneur) applicant bears the legal burden of proving compliance with every material requirement. The required £50,000 is available only where it can be invested in the proposed business within a short period after a positive decision. An intention to provide part of the sum initially and the balance later from an unspecified source does not comply. Venture-capital funding must therefore be real, credible and capable of prompt investment, not contingent or merely notional.

Nine active appellants had applied between January and April 2013 for leave to remain as Tier 1 (Entrepreneur) Migrants. Their proposed businesses relied on asserted funding of £50,000 from Profectus Venture Capital. The Secretary of State refused the applications, finding that the proposed businesses and funding were not genuine, credible or viable, and made related removal decisions.

The First-tier Tribunal dismissed the conjoined appeals in a decision promulgated on 16 July 2015. It found the Profectus evidence insufficient and the funding offers not genuine. It also applied the later version of paragraph 41-SD of Appendix A to the Immigration Rules.

On further appeal, the central questions were whether that legal error was material, where the burden of proof lay, and whether venture-capital funding was genuinely available within the meaning of the Rules.

1. All appeals were dismissed and the First-tier Tribunal's decision was affirmed. The First-tier Tribunal erred by applying the version of paragraph 41-SD introduced through HC 628. The transitional provision required applications made before 1 October 2013 to be determined under the Rules in force on 30 September 2013. The error was not material because the First-tier Tribunal had made ample independent and sustainable findings requiring dismissal.

2. The legal burden rested on each applicant to prove satisfaction of the relevant requirements of the Immigration Rules. The First-tier Tribunal's starting point, which treated the Secretary of State as first bearing an evidential burden concerning alleged dishonesty, was wrong because fraud was not part of the refusal decisions. However, that approach was more favourable to the appellants and caused no material unfairness or error.

3. Paragraph 245DD and Appendix A required a genuine, credible and viable proposal, and required the £50,000 to be genuinely available and to remain available for the proposed business. In this context, available means capable of being invested shortly after a Tier 1 visa is granted. The Rules contemplate only a short practical interval before the business is established and begins operating.

4. The evidence did not establish that the promised money was available. The only possible source was about £2.8 million held in Pakistan, whereas Profectus had made funding promises requiring at least £7 million. The appellants had no entitlement to priority over the other applicants. The lack of due-diligence material, investment documentation and reliable evidence of funding also rationally supported the findings that the offers and business proposals were not genuine or viable.

5. A proposed investment of £25,000 initially, with a further £25,000 at an unspecified future date from an unspecified source, did not meet the Rules. The Tribunal additionally observed that expert evidence requires caution and vigorous enquiry as to independence, objectivity and expertise.

• Upper Tribunal (Immigration and Asylum Chamber): dismissed the further appeals and affirmed the First-tier Tribunal's decision.
• First-tier Tribunal: dismissed the conjoined appeals in a decision promulgated on 16 July 2015.