Plans announced to double the Immigration Skills Charge
22nd May, 2017
The Conservative Party has announced plans to double the Immigration Skills Charge by the end of the Parliament as part of its manifesto for the general election.
What is the Immigration Skills Charge?
The Immigration Skills Charge was introduced on 6 April 2017 and is an additional fee to be paid by employers each time they sponsor a worker from outside the European Economic Area (EEA). It is designed to incentivise employers to invest in training British staff.
All registered sponsors are required to pay the Charge at the time of assigning a Certificate of Sponsorship to a Tier 2 worker. This includes workers applying for a visa under both the Tier 2 (General) and Tier 2 (Intra-Company Transfer) routes.
How much is the Charge?
At present, the Charge is £1,000 per person per year. This means that if a business is looking to sponsor a Tier 2 (General) worker for a five year visa, the Charge is £5,000. This must be paid up-front, at the time of assigning the Certificate of Sponsorship and the cost cannot be passed on to the worker.
Charities and ‘small companies’ (those subject to the small companies regime in the Companies Act 2006) are eligible to pay the ‘small’ charge of £364 per person per year.
Are there any exemptions?
Businesses do not need to pay the Charge if they are sponsoring:
- a worker who is applying (from outside the UK) for a visa for less than 6 months;
- a worker who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with you or a different sponsor;
- a Tier 2 (Intra-Company Transfer) Graduate Trainee;
- a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa;
- a worker to do a specified PhD level occupation.
Why is the Immigration Skills Charge in the news?
The Conservative Party’s manifesto sets out its plan to double the Charge to £2,000 per non-EU worker per year if the party wins the General Election on 8th June. This is on the basis that “skilled immigration should not be a way for government or business to avoid their obligations to improve the skills of the British workforce”.
A significant problem we have noticed through our own experience is that the charge as it stands is deterring businesses, particularly SMEs and start-ups from sponsoring workers from outside the EEA.
If the Charge is set to double, the cost of sponsoring a worker in the UK will present a huge barrier to businesses looking to attract the best talent to their business and plug any skills gaps.
How can Ward Hadaway help?
As well as keeping you updated on changes to the costs and requirements for sponsoring workers, we can explore other immigration routes that may be of use to you for bringing talent from overseas to your business.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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