The UK's new immigration system:
What you need to know

Last updated: 5 January 2021

The UK has a new immigration system
from 1 January 2021.

The new immigration system applies to both EU citizens and non-EU citizens. EU citizens moving to the UK on or after 1 January 2021 need a visa to be able to work. The same goes for other European Economic Area nationals and Swiss nationals. This does not apply to Irish citizens. They are still free to work in the UK without a visa.

 

For EU citizens who want to move to the UK and for their employers this is obviously a change for the worse.

On the plus side, it is easier to get a work visa under the new system than it was previously. The minimum skill level and minimum salary has been lowered. The resident labour market test has been abolished. For employers who already sponsored large numbers of foreign nationals under Tier 2 of the previous immigration system these are welcome changes.

The new Immigration Rules were announced on 22 October 2020. New guidance was released on 19 November 2020.

Employers in the UK who rely on foreign workers want to know how the new system affects them. Here are some answers. 


Please note that the questions and answers on this page are for general information only and must not be used as a substitute for legal advice. You should always take legal advice which is tailored to your specific circumstances. Contact a member of the immigration team for more information.

Points-Based System

The Government describes the new immigration system as a points-based system. The UK already previously had a points-based system. What's the difference?

The  previous immigration system included a set of visa categories called the “points-based system”. This was a points-based system in name only. In each visa category there were a fixed set of requirements which had to be met.

The Government has described the new immigration system as a points-based system. There are some minor ways in which points can be traded under the new system but it is no more of a points-based system than the previous version.

The term “points-based system” has been chosen for political reasons. It plays well in focus groups, especially when it is associated with the word “Australian”. Nothing significant changed in January 2021 in the overall structure of the system – only the rules and terminology.

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Skilled Worker Visas

What is a Skilled Worker visa?

The previous Tier 2 (General) visa category was replaced by a new Skilled Worker route on 1 December 2020.

There are four main requirements for a Skilled Worker visa:

  1. The applicant must have a job offer from a licensed sponsor.
  2. The job must be at a certain skill level.
  3. The salary must be at a certain level.
  4. The applicant must satisfy an English language requirement.

These are similar to the Tier 2 (General) requirements but with five big differences:

  1. The minimum skill level has dropped from Regulated Qualifications Framework (RQF) level 6 to RQF level 3.
  2. The overall minimum salary has dropped from £30,000 to £25,600 per year.
  3. The resident labour market test has been abolished.
  4. The annual cap on visas has been suspended and sponsors do not need to apply to the monthly Home Office panel for restricted certificates of sponsorship.
  5. It is possible to switch into the Skilled Worker route from most other visa categories without having to leave the UK.

The previous 6-year maximum duration for Tier 2 (General) visas does not apply to Skilled Worker visas. If someone does not qualify for indefinite leave to remain – for instance because they have spent too much time outside the UK – they can keep extending their visa until they do qualify.

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What sorts of jobs qualify for a Skilled Worker Visa?

To qualify for a Tier 2 (General) visa the job which the applicant had to be doing in the UK normally had to be at or above RQF level 6. Roughly speaking this meant that the job had to require a bachelor’s degree or equivalent experience. The applicant did not necessarily have to have a bachelor’s degree. The Home Office decides which occupations are at this level based on advice from the Migration Advisory Committee. 

Under the new immigration system, to qualify for a Skilled Worker visa the job has to be at or above RQF level 3. Roughly speaking this means that the job requires the equivalent of A-levels. Again, the Home Office gets to decide which occupations qualify. The list of occupation codes which do and don’t qualify for a Skilled Worker visa can be found in Appendix Skilled Occupations.

Many technical occupations which would not have qualified for a Tier 2 (General) visa qualify for a Skilled Worker visa under the new system: IT user support technicians, electricians and plumbers for instance. Many more office jobs also qualify, such as office managers and sales executives. Estate agents, shopkeepers, ticket inspectors, gardeners, chefs, fitness instructors, teaching assistants and childminders are also in.

The most junior office jobs do not qualify for a Skilled Worker visa: receptionists, administrative assistants and cashiers for instance. Waiters, hairdressers and retail assistants also do not qualify.

In many cases the boundary between the jobs which do and don’t qualify for a Skilled Worker visa appears arbitrary. PAs and au pairs qualify for a Skilled Worker visa but legal secretaries and care workers do not.

As at the moment, the Home Office will look closely at applications for borderline jobs so it will be important to think carefully about which occupation code is the appropriate one. The Home Office provides next to no guidance on how to go about matching jobs to occupation codes so sponsors cannot always be sure that they have chosen the right one. The Office for National Statistics Occupation Coding Tool can assist.

There is no visa category for low-skilled jobs. The only people allowed to do low-skilled jobs are British citizens, Irish citizens and other people who have permission to work in the UK through another route – for instance EU citizens who are already living in the UK and have been granted pre-settled or settled status under the EU Settlement Scheme.

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What do we have to pay the people we sponsor under the Skilled Worker visa category?

You have to pay at least the overall minimum salary or the “going rate” for the job, whichever is higher.

The overall minimum salary is £25,600 per year – down from £30,000 per year for Tier 2 (General).

In many cases the going rate for the job is higher than the overall minimum. The going rate for each occupation code is listed in Appendix Skilled Occupations. The figures in that document are based on a 39-hour week. If the person you employ is contracted to work longer or shorter hours the going rate is adjusted pro rata.

If the person you want to sponsor is a new entrant (under 26 or switching from a student visa for instance) the going rate is reduced by 30% and the overall minimum is reduced to £20,480.

The Home Office has devised a fiddly formula of tradable points to allow employers to pay less than £25,600 – down to a minimum of £20,480 – if the job is on the shortage occupation list or the person has a relevant PhD. See the eligibility requirements in Appendix Skilled Worker. Labour shortages and highly qualified candidates tend to be associated with higher rather lower salaries so it is hard to see the point of this. The Government has not yet implemented the Migration Advisory Committee’s recommendations of 29 September 2020 for the shortage occupation list as it does not consider changes should be made at this time, before assessing how the UK labour market develops post-Covid 19 and in response to the introduction of the new Points Based Immigration System.

Only guaranteed basic gross pay counts towards the required minimum. Allowances do not count – not even guaranteed allowances. This is a change from the previous Tier 2 (General) rules.

The previous £35,800 minimum salary for indefinite leave to remain has been scrapped. Under the new system the minimum salary for indefinite leave to remain as a Skilled Worker / Tier 2 (General) migrant is  the same as for a Skilled Worker visa: the general salary threshold or the going rate for the SOC code, whichever is higher.  

The certificate of sponsorship must include PAYE details if HMRC requires income tax and National Insurance for the sponsored job to be paid via PAYE.

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The resident labour market test has been abolished. Does this mean that we can sponsor a foreign national for a Skilled Worker visa even if we could find a suitable British/Irish worker to do the job?

Yes. This is a big change.

Under the previous system employers were effectively required to discriminate against non-EEA nationals when they recruited. This is because in most cases the resident labour market test applied, meaning that the job had to be advertised in a special way. If there were any suitably qualified applicants who were “settled workers” (which roughly speaking means British and European Economic Area nationals) they had to be offered the job before it could be offered to a non-EEA national, even if the non-EEA national was the best candidate.

Under the new system the resident labour market test does not apply, meaning that you will be allowed to consider all candidates equally regardless of their immigration status.

It goes further than this. Under the new system you normally have to consider all candidates equally regardless of their immigration status. This is because, on the face of it a policy of preferring candidates who already have the right to work in the UK is a form of indirect race discrimination. If there is an objective justification for the policy it is not indirect discrimination, but wanting to avoid the hassle and expense of sponsoring someone for a Skilled Worker visa will not by itself count as an objective justification. You may need to rethink your recruitment practices to avoid indirect discrimination. You should certainly not have a blanket policy of favouring candidates who already have the right to work in the UK.

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Does the abolition of the resident labour market test mean that we can sponsor our friends for Skilled Worker visas?

Yes, potentially, but you need to be careful about this.

The abolition of the resident labour market test means that in theory you can offer a job to a friend or acquaintance – or a family member – who needs a UK visa, even if you could find a British or Irish citizen to do the job.

The job must be genuine and the applicant must have the skills, qualifications and experience needed to do the job. These restrictions are familiar from the current immigration system.

The Home Office has introduced a new rule stating that a Skilled Worker visa should be refused if there are reasonable grounds to believe that the job has been created mainly to enable the applicant to get a visa.

This has echoes of the controversial “primary purpose rule” which was used by the Home Office to refuse spouse visa applications in the 1980s and 1990s. An important difference is that in those years the burden was on the applicant to show that the marriage was not entered into primarily to get a visa (in other words they had to prove a negative), whereas under the new immigration system the Home Office is only able to refuse the application if it has some evidence that the job was created mainly to get a visa.

If you are thinking of sponsoring a friend, acquaintance or family member for a Skilled Worker visa, ask yourself two questions. Would you try to find someone else for the job if the person you plan to sponsor did not want it? Would you employ the person if they already had permission to work in the UK? If the answer to both questions is “no”, think again before going ahead.

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Under the new system there is no need to apply to the Home Office monthly panel for restricted certificates of sponsorship. How do we get certificates of sponsorship?

Applications submitted after 9 am on 1 December 2020 are decided in accordance with the new Skilled Worker rules. Where a certificate of sponsorship has been assigned before 1 December 2020, it can still be used in a Skilled Worker application so long as a sponsor note is included providing further information, such as PAYE details. 

Where the Skilled Worker application is to be submitted outside the UK, a defined certificate of sponsorship will be required. This type of certificate of sponsorship is obtained on an ad hoc basis by applying to the Home Office on the basis of the role in question and it should be received one working day later. It could be delayed if further information is requested. Where a restricted certificate of sponsorship under the Tier 2 (General) system was applied for after the last monthly quota ended on 5 November, it should have been considered on the weekend of 28/29 November and if granted be available as a defined certificate of sponsorship for use after 1 December.   

Where the Skilled Worker application is to be submitted inside the UK, an undefined certificate of sponsorship will be required. These types of certificate are allocated on an annual basis but where necessary extra undefined certificates of sponsorship can be requested. A sponsor’s previous Tier 2  allocation of certificates of sponsorship should have been transferred and be available for use for Skilled Worker applications submitted in the UK.

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What about the English language requirement?

Everyone applying for a Skilled Worker has to meet an English language requirement. The rules are much the same as for a Tier 2 (General) visa.

If the applicant is not a national of a majority English-speaking country then in most cases they need a degree taught in English (validated by UK NARIC unless the degree is from a UK university) or they have to pass a Home Office-approved English language test at level B1 of the Common European Framework of Reference for Languages. Additionally, under Appendix English Language the English language requirement can be met by having a GCSE, A level, Scottish National Qualification at level 4 or 5 or, Scottish Higher or Advanced Higher, in English (language or literature).

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How much does a Skilled Worker visa cost?

The government fees are the same as for a Tier 2 (General) visa, although some visa fees for EU citizens are £55 lower than the standard amount

On 27 October 2020 the Immigration Health Surcharge for adults increased from £400 per year to £624 per year. For children under 18 the fee is £470 per year.

The government fees for a five-year, non-shortage occupation Skilled Worker visa sponsored by a standard sponsor (as opposed to a small sponsor) come to the best part of £10,000:

Certificate of sponsorship fee £199
Immigration Skills Charge: £1,000 x5 £5,000
UKVI application fee £1,220
Priority visa service fee (optional) £220
Immigration Health Surcharge: £624 x5 £3,120
TOTAL £9,759

The same fees apply regardless of the sponsored worker’s nationality. If you are recruiting or transferring staff from the EU you need to budget for these new visa costs.

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Who will can switch into the Skilled Worker visa category without leaving the UK?

In most cases it is possible to switch into the Skilled Worker route without leaving the UK. For instance, an Australian citizen who is in the UK on a Youth Mobility Scheme visa will no longer have to fly back to Australia to apply for a Skilled Worker visa. Instead they can apply in the UK.

Those who cannot switch into the Skilled Worker route include those who have or were last granted permission as a visitor, short-term student, parent of a child student, seasonal worker, domestic worker in a private household or outside the Immigration Rules.

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How does the visa application process work and how long will it take?

Under the previous Tier 2 system, the resident labour market test and monthly panel application meant that it could take 10 weeks or more to get a Tier 2 (General) visa.

Applying for a Skilled Worker visa is similar to applying for a Tier 2 (General) visa as a high earner using an unrestricted certificate of sponsorship. Depending on the situation it may be possible to complete the process from start to finish in less than 2 weeks.

First, you or your representative will apply for a certificate of sponsorship, if you do not already have one in your allocation. The target processing time for this is 24 hours.

Depending on the situation, the individual may have to take an English language test and/or a tuberculosis test.

The individual can then submit an online application and book a biometric appointment at a UK visa application centre. EU citizens will not need to attend a visa application centre. Instead they will provide facial images using a smartphone app.

The target processing time following biometric enrolment is 3 weeks using the standard service, 5 working days using the priority service, or the next working day using the super-priority service.

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What will happen to our existing Tier 2 (General) sponsored workers?

Anyone who already has a Tier 2 (General) visa kept that status after the new immigration system came in. They will be able to apply for indefinite leave to remain after five years in the usual way.

If necessary they can apply for an extension under the Skilled Worker visa category and combine the time spent on a Tier 2 (General) visa with time spent on a Skilled Worker visa towards the five-year qualifying period for indefinite leave to remain.

There are transitional provisions benefitting current Tier 2 (General) migrants who need to extend their visas under the Skilled Worker route or apply for indefinite leave to remain. In most cases this will not be relevant because the Skilled Worker rules are more generous, but where the Skilled Worker rules are stricter (on salary/allowances for instance) Tier 2 (General) migrants extending their visas under the Skilled Worker route or applying for indefinite leave to remain will be able to rely on the old Tier 2 (General) rules.

The new Immigration Rules confirm that allowances can be included in salary calculations for applicants who apply before 1 December 2026 so long as they are still working for the same sponsor. The allowances need to be guaranteed, paid for the duration of the employment and would be paid to a local settled worker in similar circumstances.  

The new Immigration Rules also confirm that for applications made before 24 May 2023, an applicant who previously had permission as a Tier 2 (General) sponsored worker with a certificate of sponsorship given to them before 24 November 2016 does not need to achieve the 20 tradable points.

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We often recruit staff from the EU. We have never sponsored anyone for a work visa and don’t know how to do this. Where do we start?

You need to apply to the Home Office for a sponsor licence. It is best to do this as soon as possible in case there is a rush of applications.

For well-established UK businesses applying for a sponsor licence is usually straightforward. It is worth getting professional advice because immigration law is complicated and a sponsor licence comes with various duties – on record keeping and reporting to the Home Office for instance. It is essential that you know what these duties are and put systems in place to help you comply with them. If the Home Office believes that you have breached your sponsor duties it will take steps to revoke your licence.

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Intra-Company Transfer Visas

What has happened to intra-company transfer visas?

The Tier 2 (Intra-company Transfer) visa category has been renamed “Intra-company Transfer”.

The skills threshold and overall minimum salary is the same as for a Tier 2 (Intra-company Transfer) visa: RQF level 6 and £41,500 (or the going rate for the role, whichever is higher) respectively. The overall minimum salary level is based on a 48 hour week. The going rates set out in Appendix Skilled Occupations are based on a 39 hour week and can be adjusted pro rata. Unlike under Skilled Worker, certain allowances can be included towards salary calculations for Intra-company Transfer applications.

Most people coming to work in the UK will need a Skilled Worker visa. An Intra-company Transfer visa may still be useful for people who are coming to the UK on a temporary assignment and cannot pass an English language test, or do not have time to take a test.

It is possible to switch from an Intra-company Transfer visa – or a Tier 2 (Intra-company Transfer) visa – to a Skilled Worker visa.

Time spent on an Intra-company Transfer or Tier 2 (Intra-company Transfer) visa cannot be combined with time spent on a Skilled Worker visa towards the five-year qualifying period indefinite leave to remain. If you have staff members on Tier 2 (ICT) visas who you want to keep in the UK permanently you should think about switching them into the Skilled Worker route as soon as possible so they can start the five-year clock for indefinite leave to remain.

As was the case with Tier 2 (Intra-company Transfer), those who are paid £73,900 or over are not required to have 12 months’ experience with an overseas group company. Those paid £73,900 or over can also stay in the UK for up to 9 years, which is a reduction of the £120,000 high earner salary threshold under Tier 2 (Intra-company Transfer). There is not any cooling off period, rather it is not possible to hold Intra-Company visas totalling more than 5 years in any 6-year period or 9 years in any 10-year period if a high earner.

The certificate of sponsorship must include PAYE details if HMRC requires income tax and National Insurance for the sponsored job to be paid via PAYE.

Those who cannot apply from within the UK to switch into the Intra-company Transfer route include those who have or were last granted permission as a visitor, short-term student, parent of a child student, seasonal worker, domestic worker in a private household or outside the Immigration Rules. Applicants must though meet the requirements of being employed within the sponsor group.

Applications submitted after 9 am on 1 December 2020 will be decided in accordance with the new rules. Where a certificate of sponsorship was assigned before 1 December 2020, it can still be used in an Intra-company Transfer application so long as a sponsor note is included providing further information, such as PAYE details.

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Graduate Visa Route

A post-study work visa for international students was announced in 2019. How will this work?

A new Graduate visa category will be launched in Summer 2021.

This will be similar to the Tier 1 (Post-Study Work) category which was abolished in 2012. It will allow international students who have graduated from a UK university to stay for two years (three years for PhD graduates) and work at any skill level without needing a sponsor. If they find a skilled job with a licensed sponsor they can switch into the Skilled Worker visa category.

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Other Visa Routes

What about other visa routes?

All other visa routes have stayed – for now – with new names for the current point-based system categories and, in some cases, minor changes to the rules.

For instance, the current Tier 4 (General) visa route has become the Student route. The Tier 5 (Youth Mobility Scheme) route has become the Youth Mobility Scheme route. The Tier 5 (Temporary Worker – Government Authorised Exchange) route has become the Government Authorised Exchange route. The Tier 5 (Temporary Worker – Creative and Sporting) route has become two new routes: the Sportsperson (Temporary Leave) route and the Creative route. 

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Electronic Travel Authorisations

The Government has talked about introducing something like an ESTA. What is this?

Between 2020 and 2025 the Home Office will introduce a system of Electronic Travel Authorisations (ETAs) for people visiting the UK who do not already have a visa. This will be similar to the US Electronic System for Travel Authorization (ESTA).

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EU Citizens Living In The UK

The new immigration system applies to EU and non-EU citizens. What about EU citizens who lived in the UK before 31 December 2020?

EU citizens (as well as other European Economic Area nationals and Swiss nationals) who already lived in the UK or who moved to the UK by 11pm on 31 December 2020 do not need Skilled Worker visas.

Instead they should apply to the EU Settlement Scheme. This is free and usually straightforward.

Most EU citizens living in the UK have already applied. The deadline for applying is 30 June 2021.

You should encourage your EU citizen employees to apply as soon as possible, if they have not already done so.

The Home Office has issued guidance stating that you cannot require new or existing employees to show you their status under the EU Settlement Scheme until after 30 June 2021 (although they can show you if they wish). Until that date, an EU passport or nationality identity card is sufficient for a right to work check on an EU citizen.

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What you need to do

What should we do to prepare for the new immigration system?

  • Get a sponsor licence. If you want to employ foreign nationals – including EU citizens who were not living in the UK by 31 December 2020 – you need a sponsor licence. If you do not already have a licence you should apply for one now. Getting a licence is usually easy but it comes with various duties and the immigration system can be complicated. If you are not familiar with the system you should seek advice.
  • Encourage your EU citizen staff members to apply to the EU Settlement Scheme.
  • Budget for increased visa costs which you will incur if you employ EU citizens moving to the UK after the end of 2020.
  • Consider switching employees who have Tier 2 (Intra-company Transfer) visas into the Skilled Worker route so they have a path to indefinite leave to remain. 
  • Think about how you will use your freedom to recruit skilled workers from overseas under the new immigration system. At the same time look at your recruitment practices to make sure that you avoid indirect discrimination against foreign nationals. You will no longer be able to rely on the resident labour market test as a reason to reject a job application from a foreign national.
  • If you rely on low-skilled workers from the EU, think about how you will cope since this source of labour was switched off at the end of 2020.

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For more information please do not hesitate to contact a member of the immigration team.

Nicolas Rollason was recently joined by UK Home Office Policy Lead, David Ramsbotham in a webinar discussing the new UK immigration system. A recording of the webinar can be seen here on our website.

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