Be One Step Ahead
June 13, 2016
Country / Territory
It only feels like yesterday that the Home Office decided to substantially change the UK immigration system on advice from the Migration Advisory Committee (MAC). Fast forward a few months and it's time to think about how those changes will impact businesses in a practical way.
Impact of immigration changes on businesses
Autumn will see the first set of changes coming into force, namely the increase of salary for Tier 2 and the introduction of the Immigration Health Surcharge for Tier 2 Intra-Company Transferee visa holders; in April, we will also have the Immigration Skills Charge. What is the common denominator? New and increased costs.
Looking at the cost for an individual migrant entering for 5 years as an Intra-Company Transferee, the Government fees for this currently are £1,350.
In Autumn adding the IHS of £200 per year will increase the cost to £2,350. Fast forward to April 2017 with the Skills Charge levy of £1,000 per year and this cost jumps to £7,350.
All these rather eye-watering costs are before employers need to think about increasing pay factor in that the minimum salary will also increase from £24,800 to £30,000 in the autumn and the cost of sponsoring a migrant worker could increase even further. Roll on to Spring of 2017 and the April rule changes will mean that an Intra-Company Transferee will need to be paid at least £41,500. That’s an awful lot of money over five years.
Why the increase? The Government clearly wants to discourage companies from recruiting from outside of the European Economic Area. Practically, businesses will need to start rethinking budgets for recruitment sooner rather than later. Whilst the changes will be happening in Autumn and later in April, business needs to act now rather than react later once the changes have come into force. And of course, the Brexit result on 24 June could change things even more in the coming months.
