October changes to the Immigration Rules and tier 2 and 5 sponsor guidance

On 1 October 2013, new Immigration Rules came into effect, which bring increased flexibility to the Tier 2 (general) and Tier 2 (intra-company transfer) categories. The main changes are:

• Under the previous Rules, Tier 2 (ICT) migrants sponsored for a total period in excess of three years were required to demonstrate English language ability. This requirement has now been removed.
• Sponsors can now hire Tier 1 (graduate entrepreneur) migrants without first undertaking a Resident Labour Market Test, and they can offer them a salary pitched to the “new entrant” thresholds established by the Home Office.
• Previously, Tier 2 (general) migrants were prohibited from holding more than a 10% ownership stake in the business sponsoring them. This restriction has been waived in relation to migrants earning in excess of £152,100 per annum.

We believe that the flexibility created by these changes will be an advantage for sponsors and encourage all clients to review their immigration strategy to ensure the benefits are optimised.

New Tier 2 and 5 sponsor guidance was also published by the Home Office on 1 October 2013, which is to be used in conjunction with the revised Immigration Rules. Amongst other updates, the guidance includes several clarifications as to who can and cannot fill the designated 'key personnel' roles within the sponsor organisation. The guidance now states the following:

• None of a sponsor’s key personnel can be subject to Bankruptcy Restriction or Debt Relief Restriction Orders/Undertakings; or be legally prohibited from being a company director (certain exceptions apply).
• Key personnel can be migrants provided they have valid leave to remain and corresponding permission to work in the UK throughout the period in which they fulfil the key personnel role to which they have been appointed.

We remind all sponsor licence holders and prospective sponsor licence holders that the restrictions above apply to anyone who holds a key personnel role or has been nominated for one, including UK-based external representatives (where allowed).