The Home Office has today published its highly anticipated response to two reviews of Tier 2 policy submitted by the Migration Advisory Committee. The changes will come into effect in two stages (Autumn 2016 and April 2017) to ensure that businesses have time to prepare for the impact this will have on the popular sponsored Tier 2 skilled workers route. The changes are "balanced to ensure that employers are incentivised to up-skill and train resident workers, whilst making sure they can continue to access migrant workers when needed."

The following changes are most relevant:

  • Tier 2 (General) salary thresholds for experienced workers will be increased from £20,800 to £25,000 in Autumn 2016 and again increased in April 2017 to £30,000. There will be an exemption from the higher threshold for some health and education professionals until July 2019. The minimum threshold of £20,800 for new entrants will be maintained.
  • Tier 4 students switching to a Tier 2 visa will not be subject to the annual quota and their Sponsor will not have to carry out a Resident Labour Market Test.
  • From April 2017, there will be extra weighting within the Tier 2 (General) limit where the allocation of places is associated with the relocation of a high-value business to the UK or potentially, supports an inward investment. The Resident Labour Market Test for these applications will also be waived.
  • Current intra-company transfer ("ICT") provisions are being simplified by requiring all ICT migrants to qualify under a single visa category with a minimum salary threshold of £41,500, with the exception of the graduate trainees. This effectively means that from Autumn 2016 the Skills Transfer route will be closed and from April 2017 the Short Term category will be closed. There will also be an increase in the number of trainees that an employer may bring to the UK from the current level of five to twenty.
  • From Autumn 2016, all ICT migrants will be required to pay the Immigration Health Surcharge (a charge of £200 per year per applicant).
  • From April 2017, the minimum salary threshold for ICT migrants working in the UK for between five and nine years will be lowered from £155,300 to £120,000.
  • The Immigration Skills Charge, designed to incentivise employers to reduce their reliance on migrant workers and to invest in training and up-skilling UK workers, will be levied on Tier 2 employers at a rate of £1,000 per Certificate of Sponsorship per year from April 2017, with a rate of £364 for smaller businesses and charities and an exemption for PhD occupations, Tier 2 (ICT) Graduate Trainees and Tier 4 students switching to Tier 2.

No further specific details have been published at this time. It is important to be aware of the salary thresholds increases and the new Immigration Skills Charge to ensure resource continuity and also adjust budgets accordingly.