Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies Sponsored Posts etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites. Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. A very few articles on our website are sponsored posts or paid advertorials. These are marked as sponsored posts at the bottom of each post. For avoidance of any doubts and to make it easier for you to differentiate sponsored or non-sponsored articles or links, you may consider all articles on our site or all links to external websites as sponsored . Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

Tier 2 Visas

By Kathryn Bradbury, Partner and Head of Immigration, Payne Hicks Beach Solicitors

The Government imposed cap on sponsorship of overseas workers has exceeded the limit for the last three months and is expected to be exceeded again this month, leaving UK employers reliant on foreign workers unable to fill vacancies.

Kathryn Bradbury
Kathryn Bradbury

The annual cap for sponsoring non-EEA skilled workers to come to the UK was introduced on 6 April 2011. Under the scheme, a Certificate of Sponsorship (CoS) is required for salaries of less than £159,600 with the exception of certain UK graduates and those on a list of recognised shortage occupations.  The annual cap is currently 20,700, split into unequal monthly allocations with February to March having the lowest allocation (1,000) and March to April the highest (2,200). When the number of valid applications exceeds the quota of CoS available, applicants with the highest salaries are favoured over those offered lower salaries. It was not until March and June 2015 that the cap was first reached, with the number requested far exceeding the allocation. Subsequent tinkering with policy and economic uncertainty has meant that the cap was not hit again until the beginning of December 2017.

It is likely that the cap will be exceeded again in the early March allocation, as it has for every month from early December 2017, meaning that only those roles meeting a very high salary threshold (possibly only those with a salary of £55,000 or more) will succeed in securing a CoS. This can be highly damaging for businesses who rely on overseas skilled labour particularly those with younger workers who are generally on lower salaries. Delays in commencement of employment could be fatal to the success of smaller businesses. Also affected is the NHS who can ill afford difficulties in recruitment in the present climate.

It is thought that the fall in the number of European nationals choosing to live in the UK after the EU referendum result has contributed to the pressure on the Tier 2 category as employers increasingly look beyond the EU labour market to fill vacancies in their skilled work forces.

Despite the need for increased skilled migration the government remains committed to reducing net migration, whether this is by quotas or by making financial costs prohibitive to all but those with the deepest pockets. In April 2017 an Immigration Skills Charge was introduced, adding £1,000 per year to an employer’s costs for sponsoring each new non-EU national under Tier 2 with few exemptions. An announcement was made in February 2018 that the immigration health surcharge is to be doubled from £200 to £400 per year for non-EU nationals.

It should be noted that the immigration cap applies only to workers sponsored under the Tier 2 (General) subcategory – predominantly new recruits from overseas. Sponsorship under the Tier 2 (Intra Company Transfer) subcategory does not form part of the 20,700 quota and some of the recent changes that the Government has made to policy in this area will be of interest to multinational businesses. As of April 2017 it is now possible to sponsor a non-EU national under the Tier 2 (ICT) category without them having been employed by the business’s overseas office for 12 months. The high earner threshold under Tier 2 (ICT) has also been reduced so that those earning over £120,000 can extend their status in the UK for up to a total of up to nine instead of five years. Tier 2 (ICT) does not however lead to settlement so the Tier 2 (General) immigration cap will continue to be an issue for more permanent hires to the UK.

Companies may need to put on their thinking caps and perhaps look to alternative immigration routes when Tier 2 is not possible. The ‘Exceptional Talent’ category is often overlooked but is worthwhile for world leaders or potential world leaders in particular fields such as arts, technology and sciences, and is one of the few areas where the Government has loosened its policy somewhat, announcing in November 2017 that it is increasing the quota of visas from 1,000 to 2,000 per year. Attractive for non-UK companies establishing a branch or subsidiary in the UK is the ‘Representatives of Overseas Business’ category which, unlike the Entrepreneur (for setting up or joining a UK business) category, does not require investment of £200,000. Each category has its own nuances and not all will be suitable, but it is worthwhile bearing in mind that there are alternatives.

In July 2017 the Government announced that the Migration Advisory Committee (MAC) had been asked to report on the impact to the UK labour market of leaving the EU and how the immigration system can better serve modern industry. Consultation closed in October 2017 and it is expected that the MAC will present its findings by September 2018, coinciding with the scheduled publication of the Government’s repeatedly delayed white paper on post-Brexit immigration policy.