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Firms Face £1,000 Charge For Every Skilled Worker From Outside Europe

Firms Face £1,000 Charge For Every Skilled Worker From Outside Europe

Employment advice for hiring foreign workers

Businesses are to be forced to pay an annual £1,000 charge for every skilled worker they employ from outside the European Union.

The move, announced by the Home Office, follows a recommendation by the Migration Advisory Committee (MAC) earlier this year.

It is one of a number of reforms to Tier 2 – the official name for the main migration route for skilled workers coming to the UK from outside Europe.

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The charge will be levied on Tier 2 employers at a rate of £1,000 per certificate of sponsorship per year, although a reduced rate of £364 will apply to “small and charitable” sponsors.

There will also be exemptions such as those in PhD-level occupations or switching from a Tier 4 student visa to a Tier 2 visa. Under the new model the Tier 2 minimum salary will be raised to £30,000 for “experienced” workers.

Currently, those wanting to work in the UK must be offered a starting salary of £20,800 and this will remain the same, as will the annual limit for Tier 2 places of 20,700 a year.

Announcing the changes, Immigration Minister James Brokenshire commented:

“The MAC strongly supported the introduction of the immigration skills charge to incentivise employers to reduce their reliance on migrant workers and to invest in training and upskilling UK workers. For too long we have had a shortage of workers in certain roles, and in the past it has been too easy for employers to recruit overseas.”

He added that the Government intends to have completed implementation of the measures by April next year.

Businesses could struggle to attract talent

Responding to the changes, the Confederation of British Industry (CBI) warned that businesses might be unable to access talent.

Neil Carberry, CBI director for employment and skills policy, said: “Skilled migration is good for the UK, helping to fill skills gaps and supporting firms to trade globally. Businesses want to see the Tier 2 cap raised not further visa price increases, especially a skills charge, which will only hold them back from accessing the talent they need to grow.”

Meanwhile, Charlotte Holloway, head of policy at techUK, said the changes will be disappointing to tech firms in the UK.

She said: “Whilst there is widespread acknowledgement that the technology industry faces some of the most significant skills shortages in the economy – extra restrictions such as the new skills charge, increased salary thresholds and limitations on intra-company transfers will not make it easier for companies to access the talent they need to grow”.

Brexit fallout could be “limited” if UK attracts migrants

Separate analysis from Oxford Economics has suggested that the economic fallout from a Brexit could be “limited” – but only if the UK continues to welcome in large numbers of migrants from the European Union every year.

In an economic modelling exercise involving no less than nine different post-exit policy scenarios, Oxford Economics said that in its best case scenario the UK’s GDP would be just 0.1% lower by 2030 and income per head of population could actually rise by £40. But that benign outcome would only be achieved if the Government did not cut EU net migration substantially.

At IBB Solicitors, we take a proactive approach to workplace problems, helping employers find the best possible outcome for their employment issues. We can help advise on policy reviews and provide expert training for your HR team. Our specialist employment lawyers place heavy emphasis on continuing personal training and development, to ensure that they always present you with the most up-to-date legal and practical advice available.

Find out how we can help you settle disputes and stay on the right side of the UK’s ever-changing employment law by calling us on 01895 207892, or email your details to employment@ibblaw.co.uk.