Legal Briefing

Changes to the Immigration Rules

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Immigration | 01 May 2014

In April 2014, the government made a package of changes to points-based system (PBS) work routes to improve flexibility for applicants and help boost economic growth. The changes include amendments across all tiers of the PBS and some minor changes to the rules on family and private life with updates to the minimum salaries and maintenance thresholds.

TIER 1

Tier 1 (General)

This category closed to new applicants in April 2011 but it currently remains open for extension and settlement applications.

The main change announced to this category is that it will close for extension applications on 6 April 2015 and for settlement applications on 6 April 2018. This should allow enough time for any applicants who entered the category before April 2011 to apply for settlement, should they still qualify.

The Association of International Accountants has been added to the list of recognised supervisory bodies for accountants from whose members’ evidence of UK earnings is accepted.

Tier 1 (Exceptional Talent)

The ‘Exceptional Talent’ category was introduced to promote world leaders in their respective fields to come to the UK to enhance the UK’s reputation for global talent. The overall limit of 1,000 places will remain for the year 2014-15.

The main addition to this route will be to allow applicants from the field of digital technology to apply. The designated body will be Tech City UK, who will endorse applications to enable migrants to apply for a visa under this category.

There will be greater flexibility to applicants to apply from any overseas country (so will not be limited to countries that they are resident in) and to switch from any Tier 1 category within the UK.

Another amendment to make the category more appealing to applicants is to allow applicants to amalgamate time spent in the UK in other Tier 1 and Tier 2 immigration categories to count towards the five-year qualifying period for indefinite leave to remain (ILR).

Tier 1 (Entrepreneur)

This category caters to applicants coming to the UK to set up, take over or be involved in the running of a business in the UK. It has the potential to benefit the UK economy but it has been abused in recent years. The changes made to this category are:

  • Currently, applicants can qualify for this category on the basis of funds invested in their businesses up to 12 months before they apply. This is being extended to 24 months for applicants switching from the Tier 1 (Graduate Entrepreneur) category, which is designed to feed into Tier 1 (Entrepreneur) and in which leave may be granted for up to two years in total.
  • Minor amendments have been made to the evidential requirements. These include removing the need for third-party declarations to be provided when funds are held in a joint account with the applicant’s spouse/partner; requiring lawyers who provide declarations to be independent to those providing investment funds; changing the necessary contents of third-party funding declarations from banks in order to better reflect banking practice; and requiring business accounts produced as evidence of investment to meet statutory requirements.
  • Following attempts by some representatives to re-interpret parts of Appendix A differently, wording has been added to emphasise more explicitly that applicants must provide all the relevant specified evidence.
  • A minimum age requirement of 16 and child protection rules for applicants under the age of 18 are being added, mirroring the requirements in other categories.
Tier 1 (Graduate Entrepreneur)

This category caters for graduates who have been endorsed by UK higher education institutions or by UK Trade and Investment to establish one or more businesses in the UK. The changes that have been made are as follows:

  • The requirement for applicants to have obtained their degree within the previous 12-month period or from a particular institution has been removed. This will benefit those who have been undertaking research in the UK since graduation and overseas applicants. It will also enable institutions to endorse graduates from other institutions.
  • Significant changes are being made to the evidential requirements, so that evidence of qualifications is needed where the endorsement is from a different institution to that which awarded the qualification.
  • Following feedback and take-up of places over the last year, the allocation of places within the 2,000 limit is being adjusted. The restriction of some places to MBA graduates only is being removed, so that there will be 1,900 places available to graduates of any subject from UK institutions. 100 places will continue to be available to global graduate entrepreneurs identified by UK Trade and Investment, as in the last year.
  • Applicants can have a maximum of two grants of leave in this category. A change has been made that allows the second grant to be with a different endorsing body than the first. This is to increase flexibility for applicants.
Tier 1 (Investor)

The Investor category is likely to change significantly over the next 12 months in light of the recent Migration Advisory Committee (MAC) report, and accordingly the changes made in April 2014 are relatively minor. Investors must still invest the funds within three months of entering the UK, however discretion will be allowed if there are exceptionally compelling circumstances for the delay in investing which were outside of the investor’s control. There are also some changes to mirror the child protection rules for applicants under the age of 18, and a minimum age of 16 held in other categories.

The main recommendations made by the MAC in their report are as follows:

1. Increase the minimum £1m threshold to £2m. This would also involve the following changes to rules on permitted investment types: 

    •  Relax the current restrictions on permissible investment instruments so as to permit wider investment activity;
    • Remove the topping up rule, which requires underperforming investments to be topped up with funds if the value falls below the prescribed amount. (Consequently quarterly valuations would no longer be required for extension or ILR applications);
    • Remove the provision permitting the investment funds to be sourced by way of a loan against assets.
    • Greater flexibility would lead to a wider range of investment activity, which would in turn deliver a great economic benefit to the UK. The report proposes accepting alternative investments including in private UK companies, venture capital schemes, angel investments, infrastructure bonds 
and property developments.

2. Introduce a ‘premium route’ instead of the current £5m and £10m routes to settlement. The premium route would be
limited to around 100 applicants per year and places would be available through an auction, with a reserve price set at £2.5m.
The reserve price would comprise of an investment of £2m by the applicant plus a gift of £500,000 donated to the UK government 
to be put into a specific ‘good causes’ fund. Any excess above the reserve price would also be put into the ‘good causes’ fund.

In addition, the residence requirements for those on the ‘premium route’ would be relaxed, so that the person would only be required to be resident in the UK for a period of 90 days per year, rather than 180 days as is currently the case.

The government must now decide whether to implement the MAC’s recommendations. Therefore, changes to the Investor category are anticipated within the next 12 months.

TIER 2

The Home Office have made a number of changes to the PBS Tier 2 route over previous years, including the introduction of the 12-month ‘cooling off’ period. Although the March 2014 Statement of Changes adds no substantive changes to the route, it does update and provide additional options for licenced sponsors.

The period of grant that can be issued to individuals under Tier 2 is being increased to five years, from the current maximum of three years. Sponsors will retain the flexibility to issue Certificates of Sponsorship (CoS) for the period required, but will now be able to assign a CoS for up to five years. The Home Office fee for an application for leave in excess of three years under Tier 2 will be almost double the three-year fee when introduced in April 2014. It will provide employees more certainty with regards to their visa and the advantage of not having to extend at the three-year point. With a five-year visa there will not be the current opportunity at visa renewal stage to check employment details and confirm any changes to employment conditions. Accordingly, a migrant’s employment should be closely monitored and reports made to the Home Office as and when necessary, otherwise sponsors may find themselves falling foul of their reporting obligations.

An annual update is being made to the minimum salary thresholds under Tier 2, as outlined in the table below.

There is a further extension until 1 October 2014 of the current exemption to advertise visa Jobcentre Plus for NHS positions, due to technical issues.

There will be increased flexibility for the transition between the Standard Occupational Classification (SOC) 2000 and the SOC 2010 system. Currently the transition must be found in a prescribed table, providing that the change is solely due to the two systems and not due to a change in the applicant’s job role.

There will also be some further changes to sponsor licence applications which, although not contained within the Statement of Changes, will likely be implemented through Home Office guidance:

  • The Home Office will no longer grant B-rated licences for applications under Tier 2 and Tier 5. Applicants must be able to achieve an A-rating otherwise the application will be refused (the policy on downgrading an A-rated licence to a B-rating remains unchanged).
  • Applications for Tier 2 (General) licences may be refused if the Home Office do not believe the applicant can offer genuine employment which meets the Tier 2 (General) requirements.

TIER 4

For those Tier 4 students applying for leave on the Doctorate Extension Scheme, where their course of study would require an Academic Technology Approval Scheme certificate to be obtained, an amendment has been made to remove this requirement. This is only applicable where the course will be completed in less than 28 days of the date of application.

The countries and regions from which applicants are subject to different documentary requirements under Tier 4 are listed in Appendix H of the Immigration Rules. The Home Office have reviewed the list and reassessed the countries against risk and compliance criteria. It has been concluded that Oman, Qatar and the United Arab Emirates (UAE) should be added to the list on the basis of high levels of compliance of their students.

The Home Office have also removed the exemption from the genuineness test that exists for applicants from countries and regions listed in Appendix H. This enables UK Visas and Immigration officials to assess whether an applicant is a genuine student regardless of the nationality of the applicant.

TIER 5 GOVERNMENT AUTHORISED EXCHANGE (GAE)

This category caters for youth mobility and temporary workers coming for non-economic purposes. A new 24-month category has been created under the GAE route for overseas government language placements. This route allows language teachers who are sponsored by their overseas government to carry out teaching placements at UK institutions through established government to government partnership agreements.

DEPENDANTS OF PBS MIGRANTS

There are very few changes to the Dependant route contained within the Statement of Changes. One is to restrict dependants from employment as a professional sports player or coach, which reflects the situation in other categories. The change would appear to be aimed at preventing individuals from circumventing the requirement to be endorsed by the relevant governing body.

An aspect that was previously omitted from previous changes to the Immigration Rules, and which is included in the April 2014 changes, is to allow dependent children of PBS migrants to apply for temporary leave to remain if they cannot qualify for settlement. This may be relevant for over 18 children who have not yet passed the life in the UK test.

MAINTENANCE

The maintenance funds threshold for PBS migrants and their dependants has been updated in line with changes to the cost of living since they were last updated in 2012. The updates for work routes (Tiers 1, 2 and 5) are based on Consumer Price Index inflation since 2012. The updates for Tier 4 are based on the rise in the maximum package of grants and loans available to home students since 2012. The new thresholds from 1 July 2014 will be as outlined in the table opposite.

There are other scenarios under Tier 4 covered by the maintenance requirement that have not been replicated in full in the table opposite, for example Tier 4 (Child).

The Home Office has added Premier Bank Ltd to the list of financial institutions in Bangladesh from which statements are accepted. This routine change has been made due to the Home Office’s current intelligence on which institutions verify such statements.

The Home Office now state that credit cards are not acceptable as evidence of available maintenance funds.

OTHER CHANGES

Spouses of British citizens

There has been clarification that an individual can make an application for further leave to remain in the UK in the event that they are unable to apply for ILR. There are also some minor changes to the income threshold under Appendix FM and Appendix FM-SE such as overseas maternity, paternity and adoption pay can be counted as employment income.

Adult dependent relatives

There is now a requirement that the evidence provided for an application 
needs to come from an independent 
source.

Visa nationals

Bahraini diplomatic and special passport holders will not be required to obtain a 
visa for the purposes of a general visit to the UK. However, Venezuelan nationals will require a visa.

TB testing

Additional countries have been added 
to the tuberculosis testing requirement 
for visa applications for leave in excess 
of six months in the UK. The countries 
that have been added are Algeria, 
Belarus, Bhutan, Burma, Iraq, Sri Lanka 
and Ukraine.

CONCLUSION

The planned closure of Tier 1 (General) will inevitably cause individuals to reconsider their future in the UK, with the change highlighting the importance of advance planning of immigration applications, such 
as ILR, accordingly.

Further changes are anticipated over the next 12 months, particularly those contained within the Immigration Bill and in relation to investors following the MAC report recommendations.