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New Tier 2 and Tier 5 Visa Rules To Come Into Effect Next Month

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For employers hiring skilled workers from outside the EEA, hiring international talent is going to be more expensive from next month. From 6th April 2017, several changes which were introduced in November last year will come into force.

If your business relies on skilled labour from non-EU countries, do you have a strategy to deal with the changes?

These new changes make it more important than ever to seek out the best advice available from experienced Immigration solicitors. Not only can they ensure that your organisation is compliant with Immigration regulations and your Sponsor Licence maintains its ‘A' rating, but they can also advise you on the overall costs of recruiting talent from outside the EU member states.

The Immigration Skills Charge

From April, if you employ someone on a Tier 2 or Tier 5 Visa, your business may have to pay an annual £1,000 skills charge. This drops to £364 of you are a charity or small business (defined as an annual turnover of less than £10.2 million or less than 50 employees). You will be required to pay the charge when the certificate of sponsorship is assigned.

If you are sponsoring using one of the following categories, the Immigration skills charge is unlikely to apply:

  • a Tier 2 migrant sponsored before 6th April 2017 and who is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor
  • a Tier 2 (Intra-company Transfer) Graduate Trainee
  • an employee for a specified PhD level occupation
  • a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa

The employee’s dependents are not included in the Immigration skills charge.

Minimum salary threshold

If you hire a foreign worker over the age of 36 years who has a Tier 2 (General) Visa, you will need to pay them a minimum salary of £30,000 from 6th April 2017. There are a few exemptions to this rule and the new entrant salary rate will remain at £20,800.

Resident Labour Market Test exemption for high-earners

From April 2017, an employee will have to earn at least £159,600 per annum if their employer wishes to be exempt from having to conduct a Resident Market Labour Test, up from £155,300.

Minimum salary for Tier 2 (Intra-company) Transfer visa applicants

The minimum salary for Tier 2 (ICT) visa holders will increase to £41,500, which will have a harsh impact on employers wishing to transfer skills and knowledge to the UK for less than 12 months. This is because the Tier 2 (ICT (short-term staff) category that had a minimum salary threshold of £30,000 per annum will be closed. Accommodation allowances for overseas workers on an ICT visa may only form 30% of the total salary package from April, down from 40%.

employees coming to the UK on the ICT visa route will also become subject to the £200 pound per year healthcare surcharge, payable up-front and applicable to dependents. This could land an employer with a bill of £4,000 for a family of four on a five-year visa.

Where will it end?

The current Conservative government appears to have a twofold objective; firstly, to slash Immigration figures to the “tens of thousands”, and secondly to force employers to look locally for new talent rather than seek it from overseas.

But is this practical? Some areas of skills shortages are currently impossible to fill by simply relying on the skills available in the UK. Article 50 will be triggered next week. And a there is a rumour that a simultaneous announcement will be made denying the right of EU nationals who enter after 29th March 2017 the right to stay in the UK long-term. This could place extreme pressure on sectors such as health, education and IT who may lose the ability to hire talent from the EU while at the same time find it too expensive to look to countries such as India and China.

While it is possible to speculate, only time will tell how much of an impact the government’s dogmatic policies will have on the UK economy.

OTS Solicitors is one of the most respected Immigration law firms in London. By making an appointment with one of our Immigration solicitors, you can be assured of receiving some of the best legal advice available in the UK today. We can assist you with all aspects of Sponsor Licence and Tier 2 (General) and ICT Visa applications.

If you wish to discuss any of the points raised in this blog, please phone our London office on 0203 959 9123

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