Immigration Changes – What does this mean for businesses and how can they prepare?

Background

Evie explained that the Labour government published its Immigration White Paper on 12 May 2025, titled “Restoring Control over the Immigration System”. It proposed drastic reforms designed to reduce UK net migration figures. Some of those proposals have since been implemented under changes to the immigration rules which took effect on 22 July 2025; some remain in the pipeline, with further changes expected through 2025 and 2026.

What has changed?

Laura explained the technical implications of the recent changes as being two-fold.

1. Changes to Skill Level – The minimum skill level required for sponsorship has increased from RQF 3 (A-Level) to RQF 6 (degree level). This is a reverse of the changes introduced in the immediate aftermath of Brexit. This has significantly reduced the number of jobs eligible for sponsorship, with more than 100 occupations being removed from the list of eligible roles.

There are limited exceptions. Individuals can be sponsored in “lower skilled’ roles whilst they are included on the Immigration Salary List (ISL) or Temporary Shortage List (TSL). In addition, there are transitional arrangements for existing Skilled Worker visa holders (who were already in the route pre-22 July).

The ISL and TSL include jobs that are considered in shortage in the UK market or identified as being important for the Modern Industrial Strategy. They remain open for sponsorship on a temporary basis, subject to review by the Migration Advisory Committee (MAC). Evie confirmed that the MAC have been asked to report back by July 2026. It is expected that the number of eligible “lower skilled” roles will be significantly reduced by December 2026 (at the latest). It is unclear how this will impact existing sponsored workers.

2. Salary Level – The minimum salary requirements for sponsorship have increased, with the general salary threshold changing from £38,700 p.a. to £41,700 p.a. In addition, the “occupation based” minimum salary requirements have also increased. These are now set at the 50th percentile for individuals new to the Skilled Worker route (meaning the rate is reflective of the top half of earners doing that role in the UK). Although some discounted salary options still remain (i.e. for ‘New Entrants’ to the labour market), these discounted options have also seen an increase. These increased salary requirements are proving difficult for many businesses to meet, particularly for businesses outside of London and SME’s.

There continue to be transitional provisions in place for individuals who have been sponsored under the pre- April 2024 rules when they come to extend their visas.

Evie noted that the government has also asked the MAC to review and report on salary requirements in January 2026, meaning a further increase is possible, and likely.

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What further changes has the Government committed to implement?

• English language requirements – the minimum English language requirements across visa routes will increase with a new requirement to show progression in English ability to extend visas or settle in the UK. There will be a new requirement for dependants to meet English language requirements, which has the potential to be a significant hurdle to bringing or keeping family members in the UK as dependants.
• ILR / Settlement – eligibility requirements for ILR will be overhauled, with a focus on settlement and citizenship being “something to be earned and not a right”. Most controversial is the proposal to increase the residency requirement for eligibility from 5 to 10 years for most visa routes (although there has been a suggestion that individuals can reduce time to settlement through “contributions to UK economy and society”). We expect consultation on this later this year.
• Immigration skills charge increase (ISC) – the ISC will be increasing by 32% for employers. This will create an additional financial burden for sponsorship and needs to be factored in to budgeting. It is not yet clear when this will be implemented.
• Graduate visa route – a reduction in the length of Graduate visas from 2 years to 18 months. There is currently no confirmed timescale as to when this will be introduced.
• Right to Work requirements and increased compliance activity – extending right to work checks to include “gig economy” workers such as sub-contractors, agency staff, casual contract arrangements, and self-employed individuals. This comes at the same time as organisations are experiencing a renewed Home Office focus on compliance and enforcement activity, with increased numbers of compliance visits, sponsor licence revocations and illegal working penalty fines.

How can businesses prepare for the changes?

Evie noted that the government’s changes have made sponsorship more difficult, in line with the overall intention of reducing net migration and encouraging employers to invest in upskilling and training the domestic workforce as an alternative.  Laura commented on the practical steps businesses should take to navigate these changes and future proof their workforce strategy:

• Audit your current workforce and review recruitment plans;
• Identify any potential eligibility issues under the new rules – with a particular focus on TSL roles in advance of the further changes next year;
• Input into Government consultations and MAC reviews to address concerns in your business/industry – CBI work to represent businesses of all sizes and sectors across the economy, acting as a bridge between industry and government to influence policy change. Businesses can liaise with CBI to express their concerns and issues regarding the impact of these changes and try to shape future policy;
• Take advice and keep up to date – Employers need to stay agile in relation to new changes, increased costs, and increased compliance activity. The immigration team at Ward Hadaway can support you with understanding and planning for changes.
• Consider any other options for recruiting/retaining non-UK talent – Our upcoming free webinar, Unlocking alternative immigration routes beyond Sponsorship will help employers to understand what other visa options may be available for employees where sponsorship is no longer possible or not viable for any reason.