Further details regarding the Immigration Skills Charge announced

23 March 2016

As you are aware the government is proposing to introduce an Immigration Skills Charge (ISC) for Sponsors who hire Tier 2 migrants and we last wrote to you about the Migration Advisory Committee’s recommendations with regard to this in our 20 January 2016 alert. This week you may have come across reports which seek to confirm the details of the Charge. Provisions relating to the Charge are included within the Immigration Bill and during the House of Lords debate on the Bill on 21 March 2016, the following details emerged concerning the Charge:

  • It will be set at £1,000 per Tier 2 migrant per year (£364 for small businesses and charities);
  • It will be collected by the Home Office, most likely upfront at the visa application stage when the Immigration Health Surcharge is also collected; and
  • Exemptions will apply to PhD-level jobs and graduates switching from Tier 4 to Tier 2.

The finer details of the Charge have yet to be confirmed by the government and will not be finalised until Regulations are published in the summer. The Immigration Bill is likely to pass into law in May 2016, with the ISC provisions coming into force in July 2016.

There is on-going debate regarding having a phased introduction for the public sector, including teachers and nurses, to give those sectors an opportunity to hire greater numbers of staff from the resident labour market in order to lessen the burden of the Charge.

There was also debate regarding the Apprenticeship Levy and whether this would be a more appropriate mechanism to raise funds in order to up-skill the resident labour market. There remains the question as to whether companies who pay the Apprenticeship Levy and employ foreign labour would also have to pay the ISC. Would this lead to double payments for the same purpose?

Whatever the final details of the ISC, we understand it will not be implemented for some time, but it will represent an expense for Sponsors and at the appropriate time should be factored into budgets for migrants taking up positions in the UK. We are monitoring the position closely and expect to send a further alert about the ISC later this year.

Immigration Health Surcharge to be rolled out to Australian and New Zealand nationals

From 6 April 2016, Australians and New Zealanders who are planning to spend more than six months in the UK, or who are applying from within the UK to extend their stay, will be required to pay a £200 per annum surcharge as part of their application. These nationalities were initially exempt from this surcharge when it was first rolled out in April 2015.

Furthermore, those migrants aged between 18 and 30, applying to come to the UK on the Youth Mobility Scheme, will benefit from a discounted rate of £150 per person per year.

Further information

Should you have any questions about the issues raised in this blog post please contact Nicolas Rollason or a member of our immigration team.

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