The changes are part of the Home Office's response to the Migration Advisory Committee's ("MAC") proposals to amend UK work visas and to reduce the reliance on overseas workers to fill skill shortages in the UK. They will come into force in two stages but it is important that those involved in employee mobility and the relocation industry start to consider the impact of these changes at this stage to minimise their impact.
There is no set date for the first set of changes, however the Home Office has indicated that they will come into force in Autumn 2016. Previous Autumn changes have been incorporated into the Immigration Rules on 6 November, so this is the most likely implementation date.
The first significant change is that Intra Company Transfers will no longer be exempt from the Immigration Health Surcharge which applies to other visas. This is an upfront charge of £200 per year that each visa applicant must pay to allow them to access the NHS. There is no exemption for those with private medical insurance and therefore the cost of all visa applications will increase. For example:
- An assignee coming to the UK on a 3 year assignment with a spouse and two children will need to pay £2,400 when submitting the visa application to cover the cost of the surcharge.
This charge will not only apply at the initial application stage but it will also apply to visa extensions so existing assignees may be subject to the charge. Those involved in the industry should consider whether there is merit in making early extension applications or bringing some international assignments forward to minimise costs.
Short term transfers
The current system distinguishes between assignments of up to 12 months, and those that last for more than 12 months. Assignments that are for less than 12 months involve a lower salary threshold of £24,800 but this is to be increased to £30,000 in Autumn 2016.
One area in which the rules are being relaxed is assignments for Graduate Trainees. Currently the minimum salary for this category is £24,800 and a company can only sponsor 5 individuals in the category per year.
When the changes are implemented in Autumn 2016 the salary threshold will decrease to £23,000 and company will be allowed up to 20 international graduates per year. This will be good news for large companies with established graduate training schemes and they may wish to review their plans for these schemes.
The second set of changes will come into force on 6 April 2017 and these changes have the potentially to be very significant.
Immigration Skills Charge
When the MAC suggested an Immigration Skills Charge it received a great deal of publicity. The purpose of the charge is to raise funds from companies that sponsor work visas, these funds can then be used to combat skill shortages in the UK.
The Home Office has announced that this charge will come into force in April 2017, and the charge will be set at £1000 per sponsored worker per year with reduced rates for small companies and charities. This will significantly increase the cost of international assignments as a 3 year assignment will cost a company an additional £3000.
This charge is likely to operate in a similar way to the health surcharge so that it applies at the initial application stage and the visa extension stage. It is therefore worth considering whether any assignments should be extended before the charge comes into force, and whether new assignments that start before 6 April should be for the maximum period of 5 years to minimise costs.
Closure of short term transfer category
From 6 April 2017 there will no longer be a separate category for short term transfers, and all assignments will be subject to a salary threshold of £41,500. Whilst this will increase the cost of short term assignments it will give employers greater flexibility in extending short term assignments beyond 12 months.
One year experience requirement
One of the MAC proposals which has not been adopted by the Home Office is the suggestion that assignees must have worked outside the UK for 2 years prior to coming to the UK instead of the current 12 month requirement.
Instead, the Home Office will retain the 12 month requirement for all assignees except those earning more than £73,900 who will be able to start assignments without completing any qualifying period.
It is currently common place for assignees to receive allowances such as cost of living allowance and a housing allowance during the course of their assignment. The current system allows these to be taken into consideration when the assignee's salary is calculated for immigration purposes.
The MAC proposed that the Home Office reconsider this and it has indicated that it will do so. No details are known as to how allowances will be treated but any changes will come into force from 6 April 2017. We will provide further information as and when they become available.
The main theme of the changes is that international assignments are due to become more expensive in the next 12 months. It will be important for those involved in employee mobility to consider these changes now to try to identify assignments which can be brought forward or extended now in order to minimise costs.
If you would like further information on any of these changes please contact me.