Suriya Fatima v Entry Clearance Officer – Sheffield

The phrase “lawfully derived” in paragraph 1(d) of Appendix FM-SE requires a fact-sensitive assessment. The Tribunal should not create a general definition where the Rules provide none. Income earned from lawful employment may be lawfully derived even where an employer, without the employee’s knowledge, fails to account to HMRC for deducted tax and national insurance. An employee should not be tainted by an employer’s suspected wrongdoing where the employee acted lawfully and was not complicit. Compliance with the Rules is positively determinative of an Article 8 appeal where Article 8(1) is engaged.

The appellant, a Pakistani national, appealed against refusal of entry clearance to join her British husband. The First-tier Tribunal allowed the appeal, accepting that the sponsor had genuinely worked for Chicago Pizza and that the payslips and bank statements were genuine. The Secretary of State appealed, arguing that the sponsor’s income was not “lawfully derived” because his employer had apparently failed to account for deducted tax and national insurance.

The Upper Tribunal had previously found an error of law in the First-tier Tribunal’s failure to address that issue. The central question was whether income earned through genuine employment could satisfy paragraph 1(d) of Appendix FM-SE where the employer, unknown to the employee, failed to make the relevant payments to HMRC.

1. Appeal allowed. The sponsor’s income was lawfully derived within paragraph 1(d) of Appendix FM-SE.
2. The phrase “lawfully derived” must be interpreted on the facts of each case. The Tribunal declined to formulate a general definition because neither the Immigration Rules nor policy documents provided further clarification.
3. The sponsor had genuinely performed the work from which the income arose. He had acted lawfully and was not complicit in his employer’s failure to pay deducted tax and national insurance to HMRC. That failure did not alter the lawful source of his earnings.
4. It would be excessively broad to treat an employee’s income as unlawfully derived merely because the employer failed to pass deducted sums to HMRC. The employee should not be tainted by possible fraud committed by the employer against others.
5. Applying the guidance in TZ (Pakistan) [2018] EWCA Civ 1109; [2018] Imm AR 1301, compliance with the Rules was positively determinative of the Article 8 appeal because Article 8(1) was engaged. The appeal was therefore allowed on Article 8 grounds.

• Upper Tribunal (Immigration and Asylum Chamber): Found an error of law in the First-tier Tribunal’s decision and allowed the appeal on Article 8 grounds.
• First-tier Tribunal: Allowed the appellant’s appeal against refusal of entry clearance.