UK Immigration Update

February 10, 2017 All, UK
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UK Immigration Update

Immigration Skills Charge – imminent commencement The Home Office announced that the Immigration Skills Charge (ISC) will be introduced from April 2017. This is to be paid by Tier 2…

Immigration Skills Charge – imminent commencement

The Home Office announced that the Immigration Skills Charge (ISC) will be introduced from April 2017. This is to be paid by Tier 2 Sponsors hiring migrant workers under Tier 2 visa route. The justification offered in 2016 by former Immigration Minister – James Brokenshire – when the ISC was first announced, was that “it has been too easy for some businesses to bring in workers from overseas rather than to take the long-term decision to train our workforce here at home”.

From April 2017 (the particular date to be confirmed), employers will be required to pay £1,000 for each year a Tier 2 migrant is sponsored  i.e. a Tier 2 (General) visa application for 3 years would equate to a £3,000 ISC being applied. A reduced rate of £364 for each year a Tier 2 migrant is sponsored will apply to small and charitable sponsors. Tier 2 sponsors will however be exempt from the ISC for occupations under the Intra Company Transfer Graduate Trainee category, those roles skilled to PhD level or where sponsoring students switch from Tier 4 to Tier 2.

The rationale behind this decision is to ensure that burden of costs in running the UK immigration system rests with those who benefit directly from it specifically, businesses in possession of Tier 2 sponsor licences, rather than UK taxpayers. The idea is to incentivise UK employers to train and upskill settled workers before turning to sponsorship to fill vacancies in their workforce, whilst utilising the ISC funds to “address skills gaps in the workforce” by funding training.

The Home Office has also distinguished the ISC from the Apprenticeship Levy, which is also to be introduced from 6 April 2017. This will require all employers operating in the UK with a pay bill over £3 million each year to invest in apprenticeships. Whilst both policies are confirmed to encourage higher investment in skills by UK employers to minimise skills gaps and improve UK productivity, they will run separately. Tier 2 sponsors only will be liable to pay the ISC. The levy contribution paid by all large employers is to be spent on apprenticeship training for their employees, therefore large employers who also sponsor Tier 2 staff will pay both charges.

We recommend that our clients review their upcoming recruitment cycles to factor in the ISC when budgeting for potential hires who will be sponsored after March 2017.

 

For further information on any part of this newsletter, please contact your dedicated Immigration Consultant via email on comms@fergusonsnell.co.uk or call us on +44 (0) 20 3668 2700