The UK economy has recently been boosted by a number of media and technology businesses announcing that they will establish their main international headquarters in the UK. Indeed, Snap Inc, the company formerly known as Snapchat, announced that it chose Britain because of its “strong creative industries” in a move that bucks the trend of overseas corporations favouring low-tax jurisdictions. Overall, this has been seen as a vote of confidence for British tech following the EU referendum result.
Clearly when businesses relocate or establish a new office in the UK, one of their key considerations will be how they can bring non-EEA talent to the UK, whether from their existing overseas operations or via a new recruitment process. It is therefore critical that businesses have a good understanding of the Home Office’s Immigration Rules.
The Immigration Skills Charge
A new charge has been introduced for the Tier 2 (General) and (Intra-Company Transfer (ICT)) categories. Although limited exceptions apply, the majority of businesses will now have to pay an additional cost of £1,000 per migrant worker, per year in order to recruit key non-EEA talent.
The Immigration Health Surcharge
Many migrants are required to pay the Immigration Health Surcharge (IHS) to help fund the National Health Service (NHS) and provide migrants with the same access to the NHS as UK citizens.
Tier 2 (ICT) migrants were previously exempt from this charge but now, along with their dependants, they will have to pay £200 per person, per year.
Changes to salary
The minimum salary for Tier 2 (General) migrants has increased from £25,000 to £30,000 for experienced workers. New entrants will still be subject to the current minimum salary of £20,800. The relevant codes of practice should be consulted to determine the appropriate rate for the particular job.
Businesses sponsoring ‘high earner’ migrants will continue to be exempt from carrying out a Resident Labour Market Test and from applying to the Home Office for a ‘restricted’ Certificate of Sponsorship. The ‘high earner’ salary threshold has, however, increased from £155,300 to £159,600.
The Resident Labour Market Test
A new Resident Labour Market Test exemption has been introduced for Tier 2 (General) posts which support the relocation of a high value business to the UK or a significant new inward investment project. The sponsor must be a newly-registered branch (within the last three years) or a subsidiary of an overseas business and the investment must involve capital expenditure of £27 million or the creation of at least 21 new UK jobs.
The Tier 2 (ICT) (Short-Term Staff) category has closed, meaning that, following the closure of the Skills Transfer category in November 2016, all ICT migrants (except graduate trainees) must now earn a minimum salary of £41,500. For senior ICT migrants, who are able to extend their total stay in the category to up to nine years, the salary threshold has been reduced from £155,300 to £120,000.
The requirement for ICT migrants to have 12 months’ prior employment with a sponsor group company has been removed for those earning a salary of £73,900 or above. This change will make it easier for businesses to transfer (newly recruited) staff from its overseas entities at short notice, in order to respond to the needs of the business and its clients.
As the Home Office continues to make regular changes to the Immigration Rules (particularly in the wake of the EU referendum result), it is becoming increasingly important for businesses to keep abreast of immigration developments and to devote resources to ensure that key stakeholders, including HR professionals and legal teams (internal and external), are aware of the developments, processes are modified accordingly and recruitment opportunities are not missed. This is particularly crucial to businesses operating in the fast-paced media and technology sectors, where recruitment often needs to be carried out at short notice to respond to pressing needs. Indeed, Apple’s chief designer Sir Jonathan Ive recently commented that the UK must keep its doors open to top talent from around the world.
Although media and technology businesses relocating to the UK will be faced with costs in order to recruit non-EEA talent, they will be pleased, in particular, by the potential exemption to the Resident Labour Market Test. Although the requirements for this exemption are specific, and may prove to be difficult to achieve, they offer a lot of promise for smaller start-up companies with considerable funding looking to build their business in the UK.