Immigration changes
affecting the UK's
IT industry
17 May 2016
The UK immigration rules are changing significantly and will dramatically affect the way in which UK businesses recruit employees from outside the EEA.
One industry which will particularly feel the sting is the information and technology sector. With over three quarters of Tier 2 Intra-company Transfer (ICT) applications made in 2015 being submitted by IT firms, many of these businesses will need to review their recruitment practices in light of developing legislation.
Of all the upcoming changes, technology firms should be especially aware of the following:
- Immigration Health Surcharge (IHS) for all – As of autumn 2016, applicants of the Tier 2 ICT visa category will no longer be exempt from this UK immigration charge. The IHS was introduced earlier this year and is payable upfront during the application process.
- Immigration Skills Charge (ISC) for UK employers – From April 2017 UK organisations will be charged £1,000 per year, per Tier 2 employee application, whilst a reduced rate of £364 will apply to small and charitable sponsors. Some visa routes, such as the Tier 2 ICT Graduate Trainee subcategory, will be exempt from the charge completely.
- Increased minimum salary threshold for Tier 2 General applicants – The minimum salary threshold for experienced workers applying for a Tier 2 (General) visa will be increased to £25,000 in autumn 2016, and to £30,000 in April 2017. This increase will not apply to certain public sector roles, such as nurses, paramedics and teachers, until July 2019. For new entrants, the minimum salary threshold will remain at £20,800.
- Increased minimum salary thresholds for Tier 2 ICT Short Term applications – This autumn will see the required minimum salary threshold for the Tier 2 ICT Short Term visa category rise from £24,800 to £30,000. This is ahead of the Short Term route’s closure which will occur in April 2017.
- Closure of the Tier 2 ICT Short Term visa category – The Short Term ICT route so often used within the technology sector to satisfy demand for short-term, highly-skilled project work within the UK will close completely in April 2017. This will mean that all Tier 2 ICT applications will be subject to the same qualifying criteria and minimum salary requirement (£41,500), making it more difficult than ever for employees to come to the UK on a short-term basis to work on a client project.
Smith Stone Walters recommends that UK sponsors take the time to fully review their HR and recruitment needs well in advance of the autumn and spring changes.
Not only will IHS and ISC charges increase costs for the employers of migrant staff, but the closure of the Tier 2 Short Term ICT route will also have a heavy financial and logistical impact on the information and technology sector.
For some UK sponsors, these changes may throw into question whether hiring migrant professionals is an affordable staffing solution for the future.
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