The Home Office announces changes to Tier 2

29 March 2016

Following the publication of the Migration Advisory Committee (MAC)’s report on its review of the Tier 2 visa category in January 2016, the Home Office has now announced details of the changes it will introduce for the Tier 2 visa route. Despite fears that the restrictive measures recommended by the MAC would be followed in their entirety, it is to be welcomed that the government has adopted a more cautious approach in some areas and decided not to introduce some of the changes which would have been most damaging to businesses.

The changes will be introduced in two stages, with the first tranche to take effect in the autumn of 2016 (most likely with the October Rules changes) and the second tranche to be implemented with the April 2017 Rules changes. They are as follows:

Autumn 2016 changes

  • There will be an increase in the Tier 2 (General) minimum salary threshold to £25,000 for experienced workers, maintaining the minimum threshold of £20,800 for new entrants.
  • There will be exemptions from the increased Tier 2 (General) experienced worker salary threshold for nurses, medical radiographers, paramedics and secondary school teachers in mathematics, physics, chemistry, computer science and Mandarin. The exemption will end in July 2019.
  • The salary threshold for the Tier 2 (ICT) Short Term route will be raised to £30,000.
  • The minimum salary requirement for the Tier 2 ICT (Graduate Trainee) category will be reduced from £24,800 to £23,000 and the number of places available to companies will rise from 5 to 20 per year.
  • The Tier 2 (ICT) Skills Transfer category will be closed to new applications.
  • Extra weighting will be given to overseas graduates in the Tier 2 (General) monthly quota allocation, to make it easier for employers to score the necessary points to secure a restricted Certificate of Sponsorship.
  • Employers will continue to be able to sponsor non-EEA graduates of UK universities without first testing the resident labour market and without being subject to the annual limit on Tier 2 (General) places. Graduates will also be able to switch roles once they secure a permanent job at the end of their training programme, without the Sponsor having to undertake a resident labour market test.
  • The Immigration Health Surcharge will be introduced for the Tier 2 (ICT) category.
  • Nurses will remain on the shortage occupation list but employers will need to carry out a resident labour market test before recruiting a non-EEA nurse.

April 2017 changes

  • The Tier 2 (General) minimum salary threshold will be raised to £30,000 for experienced workers.
  • The Tier 2 (ICT) Short Term category will be closed to new applications
  • The Immigration Skills Charge (ISC) will be introduced for employers of Tier 2 migrants. This will be £1,000 per migrant per annum (£364 for small businesses and those in the charitable sector). An exemption to the charge will apply to PhD-level jobs and international students switching from Tier 4 to Tier 2 (General).
  • The high-earners’ salary for Long-Term ICTs will be reduced from £155,300 to £120,000.
  • The one year experience requirement in the Long-Term ICT category will be removed where the applicant is earning over £73,900.
  • There will be a waiver of the Resident Labour Market Test and prioritisation for Tier 2 (General) places where the visa grant(s) are in support of the relocation of a high-value business to the UK or, potentially, an inward investment project.
  • The MAC’s recommendation of a 24 month period of employment to qualify for Tier 2 (ICT) will not be introduced.
  • Following a review of allowances under the Tier 2 (ICT) categories, there may be some changes to the type and amount of any allowance which can be amalgamated with the base salary, in order to meet the minimum salary threshold.

The devil will be in the detail with these measures but it will be a relief to those employers running graduate recruitment schemes that the government has decided not to introduce any restrictions which would jeopardise these schemes. Furthermore, the reduction in the high earner threshold to £120,000 will remove more migrants from the annual limit on Tier 2 (General) places, leaving more available for those earning lower salaries. In addition, with regard to those Tier 2 (ICT) migrants earning over £73,900, removing the requirement for 12 months employment overseas will make it easier for Sponsors to transfer these highly skilled migrants from its overseas offices to take up work in the UK at short notice.

There is a question mark over the 12 month cooling off period and how this will apply to those Tier 2 (ICT) migrants transferring to the UK for a short period, once the Tier 2 (ICT) Short Term route is closed in April 2017. Currently, Tier 2 (ICT) Short Term migrants are able to return to the UK under the Tier 2 (ICT) Long Term route without first having to spend 12 months overseas (known as the 12 month cooling off period). Will migrants needing to come to the UK for short periods continue to be exempt from the cooling off period if they are coming to the UK for three months or less and will this minimum period be increased if the cooling off period will continue to apply?

Also, the finer details of how the ISC will apply to Sponsors who are also paying an Apprenticeship Levy have yet to be crystallised and it is to be hoped that Sponsors will not be subjected to a double charge.

These are questions which we will be raising with the Home Office and we will keep you updated as and when the position becomes clearer.

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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