April 28th, 2017 / Insight posted in Blog

The Immigration Skills Charge – have you factored this cost into your recruitment process?

In March 2016, the government confirmed plans to introduce the Immigration Skills Charge in a bid to reduce Britain’s reliance on migrant workers.

From April 2017, the Immigration Skills Charge will be applicable to all employers that employ migrants in skilled areas. This will cost employers £1,000 per Tier 2 migrant employee for each valid visa year. As most Tier 2 visas are issued for three years, this will mean that the additional cost of such applications will increase by £3,000. This is in addition to the cost for applying for a certificate of sponsorship (currently £199). For small or charitable organisations, the rate will be reduced from £1,000 to £364. Tier 2 visas allow skilled professionals from outside the European Economic Area to come to the UK for work purposes.

There are exemptions to the charge, including PhD-level occupations, students switching from a Tier 4 student visa to a Tier 2 working visa and the Intra Company Transfer Graduate Trainee category. These exemptions aim to help the UK attract and retain talented students and better qualified migrants in certain areas, maintaining the UK’s reputation for education and research.

Businesses that have to look further afield for their personnel out of necessity, not choice, will now have to factor this cost into their recruitment process. This may not necessarily deter them completely, but could affect their potential growth or expansion.

Now that the government has triggered Article 50, formally notifying the EU of the UK’s intention to withdraw from the European Union, this new Immigration Skills Charge could further dissuade or make it harder for business to employ workers from overseas.

In light of the new Apprenticeship Levy also coming into force from April 2017, will this be the encouragement UK businesses need to consider training a worker on a formal apprenticeship? They will be able to utilise the money they are paying into the Apprentice Levy scheme, compared with paying out more money for recruiting someone from abroad.