#ChooseToChallenge this International Women’s Day
In March 2016 we updated you regarding the Home Office announcement of the introduction of an immigration skills charge for all sponsors of Tier 2 migrants. This measure was included in the Immigration Act 2016 which passed into law in May 2016. Whilst no firm implementation date has been confirmed, the Immigration Minister Robert Goodwin stated in his evidence to the House of Lords EU Home Affairs sub-committee on 11 January 2017 that this charge would be introduced in April.
Key elements of the immigration skills charge:
For those Sponsors needing to bring Tier 2 migrants to the UK this year, now is the time to start identifying suitable employees to transfer to the UK from companies within your group organisation. Similarly, if you have identified individuals you wish to hire who will require Tier 2 sponsorship, consider applying for the visa sooner rather than later. Provided the visa application is submitted prior to the introduction of the skills charge, you could save up to £5,000 per migrant.
Once the skills charge has been introduced, it will apply to all applicable Tier 2 applications, even extension applications for those currently employed by you under Tier 2.
No definition has yet been given as to what constitutes a small company, though it is likely to be based on the same definition used to determine the Sponsor Licence application fee, ie the definition to be found in sections 382 to 384 of the Companies Act 2006:
To qualify as a small company, a company must meet at least two of the following qualifying conditions:
a) Annual turnover must be not more than £10.2 million.
b) Balance sheet total must be not more than £5.1 million.
c) Average number of employees must be not more than 50
We anticipate that full details of the immigration skills charge will be announced shortly, including a definition of what constitutes a small company.
When the government decided to introduce the skills charge there were lots of questions raised from companies who wanted to know if this was the same as the apprenticeship levy. This is probably because when the skills charge was first announced it was described by the government as an immigration skills levy and so employers could be forgiven for thinking they were the same thing. They are both concerned with raising funds through “payment of an employment levy”. One is directed to foreign labour and the other is for schemes to develop and train our young people. This is of course an admirable goal and we support a system which trains young people, whilst working on the job. However, many clients have said that because the government hasn’t explained what’s going to happen with the revenue generated from the skills charge, they feel as though they are being asked to pay twice! This is incredibly controversial and is to be introduced at a time when there is so much uncertainty in the UK and questions will certainly be raised as to whether we are really open for business.
A new Apprenticeship Levy scheme is being introduced, along with the immigration skills charge, in April 2017. This scheme will apply to all employers with an annual salary bill of over £3 million and the levy will be 0.5% of the salary bill in excess of £3 million. Businesses will be required to pay into this new apprenticeship scheme irrespective of whether or not a business is already employing apprentices. Firms will need to set up an apprenticeship account via HMRC and your funds in the account can be used to offset apprenticeship training costs.
Full details can be found here:
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