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Immigration Skills Charge: The Immediate Questions

February 14, 2017

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The Immigration Skills Charge is prompting many questions from clients. While the details of the law aren't known yet, these are some of the immediate questions that can be answered.
 
The UK’s Immigration Act 2014 contains provisions to implement a skills charge for sponsored workers. Regulations to give effect to the Immigration Skills Charge for Tier 2 (General) and Tier 2 (Intra-Company Transfer) migrants will be put before Parliament later this month, the plan being to implement the policy on 6 April 2017. This is what the regulations do and don’t tell us.
 
 
 
WHO WILL THE SKILLS CHARGE APPLY TO?
 
Most Tier 2 General and Tier 2 ICT migrants who are sponsored after 6 April 2017. It will not apply to Tier 2 Sports persons, Ministers of Religion or Dependants.

 
WHO WILL IT NOT APPLY TO?
 
Tier 2 (ICT Graduate Trainees) and those switching from a Tier 4 student visa to Tier 2 General will be exempt from the charge.
 
Specified PhD level occupations, as defined in the Home Office’s codes of practice, will also be exempt:
 
  • Chemical scientists;
  • Biological scientists and biochemists;
  • Physical scientists;
  • Social and humanities scientists;
  • Natural and social science professionals not elsewhere classified;
  • Research and development managers;
  • Higher education teaching professionals;

 
WHAT WILL IT COST?
 
The skills charge will normally cost £1,000 for each year a Tier 2 migrant is sponsored, other than where they are exempt from the charge. That rate will drop to £364 per year for small or charitable sponsors.
 
Sponsors will need to pay the first 12 month period in full. Thereafter the fee is calculated in six month increments.
 
 

 
WHAT IS A SMALL SPONSOR?
 
A company that meets two or more of the following (unless excluded from the small companies regime): (i) annual turnover of not more than £10.2 million; (ii) annual balance sheet total of not more than £5.1 million; (iii) not more than 50 employees.

 
WHAT ABOUT SHORT PERIODS OF SPONSORSHIP?
 
For in-country applications – those switching to Tier 2 from another visa route or those seeking an extension to stay – the charge will apply to any length of leave (other than where their first Certificate of Sponsorship was assigned before the regulations come into force).
 
For out-of-country applications, the charge applies where the entry clearance is greater than six months.

 
WHO PAYS IT AND WHEN?
 
The skills charge will be paid by the sponsor at the point the Certificate of Sponsorship is assigned. It is not yet clear whether the payment will be made on the Sponsor Management System or through a different portal.

 
WHAT ABOUT PEOPLE ALREADY HERE?
 
The charge will not apply where an individual worker has already been assigned a Tier 2 Certificate of Sponsorship at the time the regulations come into force (provided that Certificate of Sponsorship has been used to support a successful application for entry clearance or leave to remain). Nor will the charge apply where a Tier 2 worker already in the UK at that time subsequently extends their visa or changes job or employer.
 
Where an individual has leave or entry clearance under a different visa route at the time the regulations come into force, and later applies to switch to Tier 2, the sponsor will be required to pay the charge (except those switching to Tier 2 (General) from a Tier 4 student visa).

 
WHEN COULD I GET A REFUND?
 
The regulations give the Home Secretary the power to waive or refund all or part of the fees. Exactly how that power will be exercised will be set out in guidance.

 
WHAT HAPPENS IF MY SPONSORED WORKER MOVES COMPANIES?
 
We know that where an individual changes employer, the new sponsor will need to pay the charge as this is new recruitment. It is not clear whether that means the original sponsor will be entitled to a refund of the difference between the period of time worked and the money spent on the skills charge.

 
HOW WILL THE MONEY BE USED?
 
Monies recouped from the scheme will be used to address skills gaps in the UK’s workforce. More information on what that means in practice will be made available in due course.

 

For a PDF version of this article click here.

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