In this briefing our Immigration team provides an update on the EU Settlement Scheme following the recent Brexit extension and details of the Statement of Changes to the Immigration Rules which contain changes to the visas that will be available under Tier 1 of the points-based system

Brexit and the EU Settlement Scheme

At the time of writing, the UK Government has agreed an extension to Article 50 on the following terms:

  • if the UK Government approves the Withdrawal Agreement within the week, the UK's departure from the EU will be extended to 22 May 2019; or
  • if the UK Government does not approve the Withdrawal Agreement within the week, the UK's departure will be extended to 11 April 2019.

The EU Settlement Scheme will open fully to all applicants on 30 March 2019. The Government has previously stated that in a no-deal scenario, applicants would need to be residing in the UK by 29 March 2019 in order to apply. This guidance has now been updated to reflect the extension and therefore applicants need to be residing in the UK by 12 April 2019 in order to apply. The deadline for applying in a no-deal scenario remains to be 31 December 2020.

Statement of Changes to the Immigration Rules (7 March): summary of key changes to Tier 1 of the points-based system

The Tier 1 (Entrepreneur) category will close to new applicants on 29 March 2019, meaning that applications must be submitted by 28 March 2019. The Tier 1 (Graduate Entrepreneur) category will close to new applicants on 5 July 2019, meaning applications must be submitted by 4 July 2019.

However, individuals who have been granted entry clearance or leave to remain as a Tier 1 (Entrepreneur) Migrant, a Tier 1 (Graduate Entrepreneur) Migrant or a Start-up migrant can still apply to extend their leave until 2023 or for indefinite leave to remain until 2025.

Key changes to the Tier 1 (Entrepreneur) requirements

The Tier 1 (Entrepreneur) category will be replaced by the Tier 1 (Innovator) category. This category can lead to settlement after three years provided that the migrant can meet any two of a range of criteria which will include investment, innovation, business growth and job creation.

The key changes under this category are:

  • Migrants will now only be required to have access to £50,000 in investment funds from a legitimate source.
  • Applicants will need to be endorsed by a trusted UK body (e.g. business accelerators, seed competitions and government agencies) who will need to provide a letter of endorsement.
  • Businesses will be assessed for innovation, viability and scalability.
  • Migrants will need to provide greater assurances that they are genuinely engaged in business e.g. provide details of their role within the business and the activities they will be carrying out. Migrants will not be able to work for other businesses using this visa.
  • There will be 6, 12 and 24 month checkpoints when the migrant will need to contact their endorsing body to demonstrate the progress they are making against their business plan.
  • When applying for an extension, the endorsing body must assess the progress the migrant and their business have made against the original business plan and consider whether the business is trading.

The Tier 1 (Graduate Entrepreneur) category will be replaced with the Tier 1 (Start-up) category. In this category the migrant will again have to demonstrate that the business is scalable, viable and supported by an endorsing body. The main differing criteria to the Innovator category are:

  • Applicants need not have secured any funding.
  • Applicants do not have to be graduates; they just need to be setting up a business in the UK for the first time.
  • There is no settlement route under this category but after two years, migrants can then apply to switch into the Tier 1 (Innovator) category.

Reforms to the Tier 1 (Investor) category

The Tier 1 (Investor) Scheme has some new requirements aimed at protecting the UK against financial crime. Some of the key changes are:

  • A new requirement for Tier 1 (Investors) to provide evidence of the source of any investment funds which they have obtained within the last two years. These funds must also have been held by them for two consecutive years.
  • UK banks have a requirement to confirm that they have carried out the required checks before opening an investment account.
  • The rules around investment in companies are now stricter, with more comprehensive definitions of "active" and "trading" UK companies.
  • Entry Clearance Officers must not have reasonable grounds to believe that the migrant is or was not in control of or at liberty to invest the money specified on their application.