by Lucy Elbourne, Manager for Fragomen LLP

In March 2016 the Government announced arguably the most substantial immigration policy change we have seen in the last five years, which could have a real impact on the way you do business. There was some good news – the Government confirmed the Tier 2 work permit route will remain open to all highly skilled roles and rejected the proposal that it be limited to occupations deemed to be in shortage. There is however, now a clear intention to financially discourage those who need to recruit workers from outside the EU. Central to their policy is the introduction of a Skills Levy, set at £1,000 per year of validity of the visa (£364 per year for small companies), all to be paid up front when the visa is applied for.

The Skills Levy is designed to incentivise employers to reduce their reliance on employing migrant workers, with the revenue generated used to train and upskill British workers. The minimum salary requirements for various Tier 2 visa routes will also be increased, and Intra-Company visa holders will now have to pay the Immigration Health Surcharge.

The various changes are due to be phased in over the next 12 months, with the Skills Levy being introduced in April 2017. The fees for a five year visa for a small business will therefore increase from the current £2,300 to around £4,000. This huge increase will have a detrimental effect on all employers who have already struggled to find the right skills in the local workforce. Employers will need to consider strategies on how to manage this financial burden.

A simple example may include employers obtaining a two or three year visa for a new employee, which could then be extended later, rather than initially applying for a five year visa.

Fragomen LLP is a single-focus law firm, specialising in all aspects of UK immigration and nationality law. Their specialist Small and Medium sized Enterprises (SME) team is dedicated to supporting SME and Start Up companies with their UK immigration needs.

For more help, contact George Koureas, Partner on +44 (0) 20 7090 9227 or sme@