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New Immigration Skills Charge introduced for Tier 2 employees in the UK

by John Dunn | Mar 29, 2017
  • The UK government is introducing a new skills charge in a bid to encourage businesses to train British citizens to fill skilled roles and reduce Britain’s reliance on migrant labour. The fee, first announced in March 2016, will come into effect on 6 April this year and could make it tougher for non-UK citizens to find work in the UK.
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    Who’s calling for the skills charge, and why?

    In a speech in May 2015, then-Prime Minister David Cameron stated that government intended to crack down on migrant employment. Cameron claimed migrant labour was damaging the local labour market and putting strain on public services.

    While the resident labour market test was intended to ensure that UK employers at least tried to find qualified British citizens to fill vacancies first, the measure has proved to be ineffective. According to the government, British employers still rely too heavily on migrants to fill roles.

    Employers hiring Tier 2 migrant employees will be charged £1,000 per year for each hire.

    In an official statement the rationale behind this new skills surcharge was described as being two-fold:

    • To aid in addressing the skills shortages
    • To ensure that the UK remains a leading knowledge economy

    According to the Home Office, the money collected will be used by the Department of Education to address skills gaps in the workforce through various training programmes.

    The nuts and bolts of the Skills Charge

    The Skills Charge will be levied against employers hiring Tier 2 migrant employees under the General and Intra-Company Transfer categories. Each hire will set them back £1,000 per year, as covered by the certificate of sponsorship.

    SEE ALSO: Immigration skills charge could hit health funding for years

    Those sponsoring non-EEA nationals to fill a vacancy for the full duration of a Tier 2 visa will have to pay a whopping £5,000 over to UK Visas and Immigration (UKVI).

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    Exceptions to the rule

    There is relief for small businesses and charity sponsors in the form of a reduced rate of £364 per year. A sponsor will be allowed this relief where their annual turnover is £10.2 million or less, with fewer than 50 employees.

    Small businesses and charities are exempt from having to pay the full skill charge for Tier 2 employees in the UK.

    Government has provided for other exemptions, including for companies who have hired migrant workers who:

    • Were on Tier 2 visas before April 2017 and are applying to extend from within the UK
    • Are Tier 2 (Intra-Company Transfer) graduate trainees
    • Are non-EEA nationals filling PhD-level roles
    • Change from a Tier 4 student visa to a Tier 2 (General) visa

    The Tier 2 visa isn’t the only option for those wanting to live and work in the UK. Get in touch with one of our consultants and we’ll let you know which route to the UK is best for you and your goals.

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