The Immigration Act 2016 introduced a change which will significantly increase the cost of many Tier 2 applications in the form of the Immigration Skills Charge. The new charge was originally announced in March 2016 and is expected, subject to parliamentary approval, to come into force on 6 April 2017.
The Immigration Skills Charge is intended to “…incentivise employers to invest in training British staff”. The form of the incentive is that Tier 2 immigration applications will cost much more by a charge of £1,000 per sponsored employee per year of sponsorship. However, importantly for institutions, there is a reduced fee of £364 (again per sponsored worker per year of sponsorship) for charitable sponsors. There is no skills charge for the worker’s dependants.
There are also important exemptions regarding some employees in the education sector. There will be no charge for those recruited into PhD level occupations and those international students in the country under a Tier 4 visa who are able under the immigration rules to switch into Tier 2 (General).
Originally it was not clear whether the Immigration Skills Charge would apply to those seeking extensions of stay in the UK but the Government has now updated the Tier 2 sponsor guidance to state that the charge will not apply to non-EEA nationals who were sponsored in the Tier 2 immigration category before 6 April 2017 and who apply from within the UK to extend their Tier 2 stay with either the same or a different sponsor.
It has also been confirmed that the charge is payable by sponsors at the same time they pay to assign the certificate of sponsorship and is payable upfront for the total period of time covered by the certificate of sponsorship.
A further change will make it more expensive to sponsor some employees from April 2017 onwards. The minimum salary rate which must be paid to ‘experienced workers’ within the Tier 2 (General) immigration category will rise to £30,000 per annum. There are very limited exemptions to this including some 'public service occupations' namely medical radiographers; nurses; paramedics and secondary education teaching professionals in maths, physics, chemistry, computer science and Mandarin.
Institutions should ensure that the new costs are factored into their budgets for 2017/2018 and may wish to consider if any new Tier 2 recruitments can take place prior to the changes coming into force.