Legal Briefing

Quality and quantity: immigration update

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Immigration | 12 May 2017

Extensive changes have recently been made to UK immigration laws and more are scheduled for implementation in the near future. It is an almost constantly reviewed area of law, but can there be too many changes or does it depend on the kind of changes being introduced? Immigration in the UK has always been a talking point and continues to be a hot topic, particularly with the forthcoming Brexit negotiations, and there seems to be an unending pursuit for the ‘perfect’ balance between migrant quantity and quality. Is it possible to preserve the benefits of migration while simultaneously introducing restrictions and constant modifications?

Key changes to the Tier 2 regime

In November 2016, the first set of changes, following the Migration Advisory Committee’s (MAC) report, was implemented. The biggest changes within the Tier 2 category were the closure of the Tier 2 (Intra Company Transfer) Skills Transfer sub-category and the increases to minimum annual salary thresholds for Tier 2 (General) (to £25,000) and Tier 2 (ICT) Short Term Staff (to £30,000) (however, that the Tier 2 (ICT) Graduate Trainee annual salary threshold decreased to £23,000).

The second set of changes were implemented on 6 April 2017. Notably, the Tier 2 (ICT) Short Term Staff sub-category was closed to new applicants. This route had enabled overseas employees to be assigned to the UK for a maximum 12-month period with reduced minimum employment period criteria. Further revisions were also made to the minimum annual salary threshold for Tier 2 (General), which was increased to £30,000 for newly assigned certificates of sponsorship. The high earner salary threshold for an unrestricted Tier 2 (General) certificate of sponsorship was also increased to £159,600 whereas, under Tier 2 (ICT), for those seeking to stay in the UK for up to nine years it has been reduced to £120,000 per annum. Further, the 12 months minimum employment period requirement is no longer required for Tier 2 (ICT) migrants whose salary is at least £73,900 per year.

Increased costs for businesses

Since 6 April 2017, the immigration health surcharge (IHS) is now payable by Tier 2 (ICT) visa applicants and their dependants coming to the UK for longer than six months (having previously been exempted), representing an expansion of the IHS liability to all Tier 2 migrants. At a cost of £200 per person per year, a three year certificate of sponsorship will result in IHS charge of £600 per person.

Further, the introduction of the immigration skills charge came into effect on 6 April 2017 at a cost of £1,000 per year for every Tier 2 sponsored migrant, with a reduced rate of £364 per year for small businesses and charities. For a three year certificate of sponsorship for a large sponsor, this represents an additional cost of £3,000.

The purpose of the immigration skills charge is intended to fund UK apprenticeships. However, when combined with visa application fees, IHS fees and the certificate of sponsorship fee, the immigration skills charge could transpire to be a deterrent to UK businesses from sponsoring migrant workers. The government may achieve its goal of reducing sponsored migrant numbers as employers may be more inclined to employ settled workers, however it greatly contradicts the government’s previously stated aim to attract the brightest and the best to the UK and ignores the significant benefits to UK businesses of hiring overseas talent. In light of the latest Conservative Party manifesto aims on reducing net migration, perhaps this latter promise is now overlooked.

The impact of the closure of the Tier 2 (ICT) Short Term category against the backdrop of Brexit could cause great difficulties for businesses looking to bring employees to the UK for periods of less than a year. Combined with the introduction of the skills charge and other application fee increases, this is a bold move by the government. Businesses wanting to second overseas employees to the UK for short-term assignments are now required to apply for a Tier 2 ICT Long Term visa, meaning the individual must have been employed for 12 months, unless their salary is over £73,900, and have an annual salary of at least £41,500. Along with the skills charge and the now payable IHS, these ever increasing costs are likely to significantly affect employer’s decisions to bring migrants to the UK.

Brexit

It remains to be seen how prime minister Theresa May’s restated aim to reduce net migration to the tens of thousands will work alongside the intentions set out in the government’s Brexit white paper, published in February this year. The message in the white paper was that the country remains ‘tolerant and open’ to migration and further recognises the ‘valuable contribution’ made to our society. The white paper projects the message that international talent remains imperative to the UK, but this is difficult to reconcile alongside a dramatic reduction in net migration figures (ONS figures show net migration of 273,000 to the end of September 2016).

The government’s negotiation strategy appears intent on preventing free movement rules operating in the UK following our exit from the EU, thus enabling further refinement of immigration laws and ensuring control over the number of people entering the UK from the EU. EU nationals will be subject to UK immigration laws and will need to obtain entry clearance in a qualifying visa category before travelling to the UK. Without alternative, presumably reciprocal, agreements, the presumption is that the main visa category that EU nationals will use is the Tier 2 regime of the points based system or similar work permit schemes based on regional or sectoral requirements.

Business visits

Possible options for employers looking to bring employees to the UK for shorter lengths of time include the Business Visit visa, which allows individuals to come for short visits and undertaken certain permitted business related activities. These activities are fairly extensive, including negotiating on contracts, meeting colleagues and clients, giving/receiving training. However, it is essential that no productive work is undertaken in the UK on this visa which can present difficulties in establishing in advance precisely what an individual will be doing whilst in the UK. Additionally, the individual is permitted a maximum of 180 days in the UK in any 12-month rolling period, thus preventing any permanent or long-term residence.

Provided a business can ensure the individual’s activities remain within those permitted and that their visits are short, the costs are significantly lower with the application fee costing £89 (approximately) and no immigration skills charge or IHS fees to pay. It is a restricted category, however, and one that is unlikely to relieve the obstacles ahead.

With the plethora of changes to UK immigration laws over recent months and years, and the upcoming changes that will arise from the UK’s exit from the EU, we are facing a significant transformation on how the country deals with in-bound migration. Employers are going to find it increasingly difficult to hire migrant workers due to the increased costs, ICT category closures, increased salary thresholds and the end of free movement for EU nationals. All of these changes could force employers to seek talent from only the resident labour market, potentially reducing the talent pool and restricting highly skilled workers coming to the UK, and risking business growth if the talent is simply not there.