The Government has announced its response to the recommendations of the Migration Advisory Committee (MAC) today and the headline changes are as follows:

  • The Short Term & Skills Transfer Tier 2 (Intra Company Transfer) categories will cease to exist and a minimum salary in respect of all Intra Company Transferees of £41,500 is to be required (excluding Graduate Trainees who will have separate arrangements);
  • The requirement that Intra Company Transferees must have worked for the overseas company for a year will be waived in respect of workers paid over £73,900;
  • An Immigration Skills Charge of £1,000 per Tier 2 migrant per year is imposed, a reduced rate of £364 applied to small businesses and charities with roles requiring a PhD-level qualification and current Tier 4 students switching to employment being exempt;
  • Students within the Tier 4 immigration will continue to be able to qualify for Tier 2 sponsorship without their future employer undertaking a resident labour market test;
  • The minimum salary threshold for Tier 2 (General) applications is to increase to £30,000, with this change to be phased in with an interim increase at £25,000 from Autumn 2016;
  • Several long-standing public sector occupations in short supply, including nurses, will be exempt from minimum salary increases until July 2019; and
  • The Immigration Health Surcharge is to apply to Intra Company Transferees from Autumn 2016.

Beyond the Ministerial Statement there is little additional information available at this early stage.

Timeframe

From the information currently available, it is understood that the changes in salary bands are to be phased in, commencing this Autumn. Other than this and the Health Surcharge, there will be a transitional period from April 2017 to allow those impacted by the changes to make suitable plans.

Comment

Several of the announcements were not expected. The MAC, with which the Immigration Minister tends to agree, proposed a different structure in respect of Intra Company Transfers. This change increases the minimum required salary for all such applicants considerably and those who might otherwise have qualified on the basis of lower salaries may consider Tier 2 (General) applications as a future alternative.

A fee of £1,000 per sponsored migrant per year will also significantly add to the initial cost of sponsoring overseas workers in the UK. As previously commented, the increase in supplementary charges will be felt most keenly in the Intra Company Transfer category which, effectively now requires an additional £1,200 in fees per annum. We recommend that full cost modelling of future assignments will be necessary in view of these increased costs. The exemptions to Skills Charging and RLMT in respect of PhD-level roles and Tier 4 students together with the retention of dependents ability to work are welcome news in light of some of the more dramatic and unexpected changes announced today.

The full impact of the announcement will be seen when more detail is published about how the changes are to be introduced. For now, employers should appreciate that the announcement constitutes a major change and the cost of future short term assignments is likely to be significantly greater.