The new Skills Charge: Important information for UK employers

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 will come into effect on 6 April this year.

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.

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).

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.

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

Specialist immigration advice and services

Get the employees you need

The process to be followed by the UK-based employer is as follows:

  • Obtaining a sponsorship licence
  • Issuing a certificate of sponsorship (COS)

Obtaining a sponsorship licence

A UK-based company wishing to sponsor a migrant must hold a sponsorship licence. Once this is obtained, a certificate of sponsorship can then be assigned to that migrant.

To get a sponsorship licence, the company must:

  • Prove to the Home Office that they are a genuine company operating and trading lawfully in the UK
  • Meet the suitability criteria
  • Give the Home Office no reason to believe that you represent a threat to immigration control
  • Agree to comply with the duties of sponsorship

Issuing the certificate of sponsorship

Once an employer has a sponsorship licence, they can issue Tier 2 certificates of sponsorship.

These are divided into two different types:

  • unrestricted
  • Restricted

Unrestricted category

If the candidate falls into the unrestricted category, an employer will not need to seek permission from the Home Office to issue a certificate of sponsorship.

The unrestricted category is for an employee:

  • With a salary of £153,500 or above
  • Seeking to extend their employment with their existing employer
  • With an existing certificate of sponsorship with other employers
  • Already in the UK with a current visa type which allows switching to a Tier 2 from within the UK (including the Tier 1 post study work visa or the Tier 4 student visa)
  • Being transferred from an overseas branch of the UK sponsoring company

Restricted category

This category is generally for candidates who are unable to switch to a Tier 2 visa from within the UK. These candidates need to apply for their visa from overseas ( e.g. Tier 5 (Youth Mobility Scheme) visa) or for those who are already overseas.

If you require a restricted certificate, you should note that there is a cap on the number of potential employees permitted through this scheme. This is currently set at 20,700 for the year and only those who pass a new points-based system will qualify.

Points are to be gained from the salary amount, whether the job is on the current shortage list and whether the position is at PhD level. You must also conduct the resident labour market test. This test is to protect the resident work force and means you must advertise the post to give resident workers the opportunity to apply.

The Home Office has categorised, rated and coded every occupation and specified a minimum salary requirement for each code. Whatever type of certificate is required, you will need to decide upon the appropriate code and offer at least the minimum salary stated. Apart from a few occupations in the creative sector, jobs will need to be classed at degree level (NQF Level 6) as a minimum.

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