Immigration update: Immigration skills charge to be introduced on 6 April 2017

13 February 2017

We published an update on 1 February 2017 regarding the introduction of the Immigration skills charge in April. The government has just announced that subject to parliamentary approval, it is due to be introduced on 6 April 2017.

The skills charge will apply to a sponsor of a Tier 2 worker assigned a certificate of sponsorship in the ‘General’ or ‘Intra-company Transfer’ route and who will be applying from: 

  • outside the UK for a visa
  • inside the UK to switch to this visa from another
  • inside the UK to extend their existing visa*

*Please note: There is a transitional provision whereby the skills charge does not apply if you are sponsoring an individual who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor.

This is an important exemption for Sponsors, as it means that the skills charge will not apply to extension applications of your existing Tier 2 workforce, provided you extend their stay on an in- country basis. Furthermore, if you wish to hire an individual already working in the UK on a Tier 2 visa granted before 6 April 2017, you will not need to pay the skills charge when applying for a new visa for them on an in-country basis.

Timings of extension applications will therefore be important to ensure applications are made in good time from within the UK before the Tier 2 migrant’s leave expires. This will be important as if your Tier 2 employee is outside the UK at the time their visa expires, not only will they be subject to the cooling off period for 12 months (unless they fall within the ‘high earner’ category), but they will also be subject to the skills charge.

Other exemptions

  • a Tier 2 (Intra-company Transfer) Graduate Trainee
  • a worker to do a specified PhD level occupation
  • a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa
  • You do not have to pay the skills charge for the worker’s family members (‘dependants’).

 The cost of the skills charge

The skills charge will be £1000 per year for medium or large sponsors and £364 per year for small or charitable sponsors (including universities). It will be payable upfront and for the total period of time covered by the certificate of sponsorship.
You will usually be considered to be a small business if: 

  • your annual turnover is £10.2 million or less; and
  • you have 50 employees or fewer.

 Sponsors will need to pay the skills charge at the same time that they pay to assign a certificate of sponsorship (CoS) to sponsor someone to do a skilled job in the UK. The money collected by the Home Office will be used by the Department for Education to address skills gaps in the UK workforce.

What steps you should take immediately

If you know you will need to bring Tier 2 migrants to the UK this year, consider bringing forward your recruitment plans so that you are in a position to apply for the Tier 2 entry clearance prior to 6 April 2017. The critical date will be the date of filing of the online application, therefore, provided the entry clearance application is submitted online prior to 6 April, you can avoid the skills charge. You will need to be mindful though of the start date of employment in the UK, as new guidance on start dates has also been issued.

CoS start date

The government has also issued new guidance on the CoS start date which will need to be taken into account when considering the start date for employment in the UK for your Tier 2 employees. The start date given on the CoS must be the date that your migrant employee will start working for you. Your employee will be granted entry clearance no more than 14 days before the start date given on the CoS. Once the entry clearance has been granted, it is possible to delay this start date but, in the case of a Tier 2 (General) migrant, any revised start date cannot be put back by more than four weeks from the original start date on the CoS. However, under the Tier 2 (Intra-company Transfer (ICT)) route, it is possible for the start date to exceed the four weeks, provided your employee continues to be paid by the sending overseas entity.

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