How The Immigration Changes of 6th April 2015 Will Affect You
With net migration approaching 300,000, the need to control Immigration in such a way that will most benefit the United Kingdom continues to be a hotly debated topic. On the 25th of February further Immigration rule changes were announced by the Secretary of State for The Home Department (SSHD). These changes came into effect on 6th of April 2015 and will impact on a wide variety of groups.
Changes to Tier 1 visas for entrepreneurs and investors are significant to a number of our business immigration clients and will be of more general public concern owing to potential effects on economic growth of the country. After considering the recent changes and with the election of 7th May fast approaching, it is helpful to know the major political parties’ stance on Immigration in order to contemplate the effect their proposed policies will have. Immigration Health Surcharge
Previously, the NHS provided free healthcare for visa holders who had applied to work, live or study in the UK for more than six months and who are nationals of countries outside the EEA. Changes from 6th April 2015 mean applicants and their dependents will be charged an ‘Immigration Health Surcharge’ (IHS) of £200 annually.
If an application is made from within the UK, the surcharge will apply to nationals of countries outside the EEA and Immigration applications for any length of time apart from permanent residence. Private health insurance will not subsume the requirement to pay the surcharge. If an application falls into one of the exempt categories, for example, an application for a Tier 2 (ICT) visa, an IHS number will need to be applied for, but use of the NHS will not incur charges. There are further exempt categories, for example, visitors, applicants for Indefinite Leave to Remain and family members of European nationals with European Union treaty rights.
Tier 2 Visa Minimum Salary Thresholds
The minimum salary for Tier 2 applications must also comply with a “Standard Occupational Classification” (SOC) code, which sets out a salary corresponding to each job. There are various increases in the SOC code salary rates. When completing a Certificate of Sponsorship, employers must comply with SOC code salary rates and the minimum salary threshold.
Biometric Residence Permits (BMPs)
BMPs will be gradually introduced for overseas applicants. These will give employers a more efficient means of checking migrant workers’ right to work in the UK. When a non-EEA national applies for a visa for more than six months, a 30-day short-term visa will be granted. During this time, the applicant must travel to the UK and pick up their BMP within ten days of arrival. If the BMP is not collected within ten days, the applicant must leave the UK and apply again. If the 30-day visa expires, another application must be made. Consequently, a significant cost will be incurred if the deadlines are not adhered to.
Removal of Occupations from Shortage Occupation List (SOL)
The Migration Advisory Committee has recommended various occupations be removed from the SOL and that others be added. More occupations are recommended for addition than for removal. These include (among others) hematology consultants and nurses specialising in neonatal and pediatric intensive care. Occupations recommended for addition include (among others) paramedics qualified to NQF6+, overhead lineworkers, and cyber security specialists.
Removal of ‘Cooling Off Period.'
Prior to the changes of 6 April 2015, persons granted a Tier 2 Visa, who then left the country had to wait 12 months to reapply. This was known as the ‘Cooling Off Period’. Employers will now be able to bring talent back to the UK by sponsoring employees to return within 12 months.
Changes affecting Investors and Entrepreneurs
General Tier 1 Visas
For migrants with a Tier 1 (General) visa to change to a Tier 1 (entrepreneur) visa after 6th April 2015, the migrant must have established a business in the UK or have funding from the government or endorsed seed funding competition.
Tier 1 (General) visa holders will not be granted leave extensions after 6th April 2015. Holders of this visa may apply for ‘Indefinite Leave to Remain’ up until 6th April 2018. If either of these deadlines are missed and the visa has expired, an application to remain in the UK must be made under a different Immigration category. To account for the restriction on leave applications, extension applications can be made when there are more than three months until the visa expiration to allow for processing time.
Applicants for a Tier 1 (entrepreneur) visa will have to pay an increased visa application fee of £944.00. They will also face a more stringent test, currently known as the ‘genuine entrepreneur’ test, from caseworkers from 6th April 2015 onwards to determine if their business activities are authentic and credible. The genuine entrepreneur test will involve:
- assessment of the source of the applicant’s fund,
- assessment of the credibility of the fund sources and intended business activity,
- submission of a business plan and an interview by the Home Office.
Applicants using their own resources and who have been in possession of those funds for less than 90 days must prove their fund sources. The genuine entrepreneur test will also be used to determine applications for further or indefinite leave.
The application fee for a Tier 1 (investor) visa has increased significantly, from £874.00 to £1500.00. Additionally from 6th April 2015, these applicants will need to open a UK-regulated bank account prior to their application submission. The minimum age at which this visa can be applied for has increased from 16 to 18 years.
The requirement to invest additional funds if investments are sold at a loss has been removed. The sale price of the investments will only need to be re-invested to maintain the minimum investment required to obtain the visa (£2 million). The gross proceeds must be reinvested in a qualifying investment before the end of the next reporting period or six months from the investment's date of disposal. Investments sold for a profit must be reinvested within the UK.
Effect of Changes
What will these changes mean for entrepreneurs and investors wanting to set up in the UK?
- For entrepreneurs, the visa application process will take longer and, with increased checks visa applications will be much more heavily scrutinised.
- For investors, time will need to be taken to set up a UK bank account. As banks need time to carry out anti-money laundering checks before a bank account will be opened, the time before a visa is granted will likely increase.
- The effect of removing the requirement that additional funds must be invested to account for funds sold at a loss is that investors will need to invest more than £2 million to account for paying tax and other costs.
Border Control and Immigration
With Immigration being a dominant topic of debate in the upcoming election, what models of border control are proposed by the parties?
- The main parties agree on the need for full exit checks.
- Labour would place an extra fee on non-visa visitors to the UK to pay for the recruitment of more border staff.
- Conservatives would remove “opportunities for spurious legal challenge” in the deportation of illegal immigrants.
- UKIP would also plan for recruitment of more border staff but would use former members of the armed forces for this job.
What changes do the parties propose to bring in respect of Immigration policies/legislation?
- Labour's policy is to introduce a "smarter system of controls" which will encourage "top talent" into the country and restrict low-skilled migration. They have not promoted a net annual migration figure but would limit non-EEA Immigration further.
- Conservatives plan to place further restrictions on the student visa system and retain the annual limit of 20,700 skilled migrants from outside the EEA. Reducing Immigration by tens of thousands is still an “ambition”.
- The Liberal Democrats would only pay Universal Credit payments to migrants for six months and after migrants have been in the country for six months. Only migrants working the equivalent of 35 hours per week on minimum wage would be entitled to in-work benefits.
- UKIP's policy is to establish a quango called the Migration Control Commission, who would determine the optimum level of net migration and bring that target to fruition. UKIP would also have the UK leave the EU to prevent Immigration and are promoting a yearly limit of 30,000 to 50,000 migrants.
The recent changes which came into effect in early April reflect intentions to prevent migrants from taking advantage of the NHS, ensure incoming skilled migrants’ salaries are in line with those being offered already in the UK, simplify employers’ checks on migrants’ right to work through biometric residence permits, amend the shortage occupation list to better reflect current circumstances and improve flexibility for skilled migrants with the removal of the Cooling Off Period. The effect of changes for entrepreneurs and investors will be interesting to monitor in terms of their impact on economic and creative growth.
To find out more about entrepreneur and/or investment visas and our legal services, please contact us on 0207 936 9962 or fill in our contact form and we will be in touch with you as soon as possible.
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