Tier 2 immigration skills charge from April 2017 - ICS Legal Blog

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Tier 2 immigration skills charge from April 2017

An Immigration Skills Charge (ISC) is being introduced as part of upcoming changes to the Tier 2 (General) immigration route from 6 April 2017. The ISC will be paid by employers who recruit skilled workers from outside of the European Economic Area (EEA) through the route. This will have implications for your recruitment activities outside of the EEA.

Key points to consider

  • The charge is a flat rate of £1,000 per person per year of the sponsorship.
  • Employers must pay the ISC upfront at the point a certificate of sponsorship (CoS) is assigned to an individual.
  • Exemptions apply to Tier 4 students switching to Tier 2, PhD occupations and the individual’s family (dependants).
  • The ISC does not apply to CoS assigned to individuals before 6 April 2017 or to existing Tier 2 workers already in the UK before 6 April 2017 who extend their stay or change job or employer.
  • The funds raised from the ISC will be used to address the skills gap in the domestic workforce. We are awaiting further details to be released by The Department of Education.

Salary Thresholds

The minimum salary threshold for Tier 2 applications is increasing as outlined in the table below. For experienced workers, there is an increase from £25,000 to £30,000 from 6 April 2017. This new salary threshold will only affect those making a new application under Tier 2 (general) for the first time. Those already in Tier 2 or applying for extensions or change of employer before this date will not be affected.

Tier 2 (General) overall minimum thresholds Current salary thresholds New salary threshold What does this mean in practice?
Experienced workers £20,800 £30,000 Phased change: £25,000 from autumn 2016 to £30,00 from April 2017.

Nurses, medical radiographers and paramedics are exempt from increase until July 2019

 New entrants £20,800 £20,800 Separate minimum salary threshold for new entrants into Tier 2 (General). New entrants are students switching from Tier 4 to Tier 2, new graduate recruits where a resident labour market test (RLMT) has been met through university ‘milkround’ recruitment, and a person aged 25 or under.

When applying for a CoS what does the salary threshold include?

The salary thresholds are based on guaranteed pay, so can include:
  • basic gross salary including tax
  • high cost area and recruitment and retention premia pay supplements, plus
  • any contracted enhancements for shift patterns.

Pay or allowances which are not guaranteed (such as overtime or performance pay) or which would not be offered to resident workers in similar circumstances, should not be included. Earnings from supplementary employment should also not be included.

It is important that the guaranteed salary package stated on the Certificate of Sponsorship (CoS) matches (or is within the range) stated on the original advertisement for the role, otherwise the CoS application will not be granted.

Overseas criminal records certificates for Tier 2 applicants

From April 2017, all Tier 2 applicants and their adult dependant(s) must provide a criminal record check for any country they have lived in for more than 12 months in the last 10 years. Employers with a sponsorship license are advised to inform prospective employees of these new requirements as early as possible.

Changes in effect from 24 November 2016

Salary thresholds

The minimum salary threshold first increase to £25,000 for experienced workers took effect from 24 November 2016. The increased threshold only applies to those making a new application under Tier 2 (General) for the first time from 24 November 2016. Those already in Tier 2 or applying for extensions or change of employer before this date will not be affected.

Prioritisation for Tier 2 (General)

  • The limit of restricted certificates of sponsorship (RCoS) will remain at 20,700 places each year.
  • After priority is given to shortage occupations, then PhD occupations, prioritisation on the basis of salary will continue.
  • Nursing will remain on the shortage occupation list (SOL), but employers need to first carry out a RLMT before recruiting a non-EEA nurse.
  • When the RCoS limit is reached, until 2019 nurses, medical radiographers and paramedics will be given extra points in the allocation process.
  • New graduate recruits will be given additional points in the allocation process where the RLMT has been met through university ‘milkround’ recruitment.

Immigration application fee changes

On 11 January 2016, the government set out its proposed changes to the fees for visas, immigration and nationality applications for 2016–17.

In summary, from 18 March 2016:

  • fees for Tier 2 certificates of sponsorship will stay at the current rates
  • increase in the cost of a Tier 2 work visa of two per cent
  • cost of a Tier 2 sponsor licence stays the same
  • cost of an application for settlement has increased by £239 to £1,195.