Increase in immigration costs

The UK government has announced increases in immigration costs that will impact employers, as well as visa applicants and their families. Visa application fees and the Immigration Health Surcharge fee (IHS) are being raised to help fund public sector pay increases.

New visa fees will come into effect from 4 October 2023. Fees and the increase in costs are set out here.

The IHS will be introduced from 16 January 2024. It will increase from £624 to £1,035 for each year of the visa for adults. (NB: not everyone has to pay the IHS. You can learn more here.

These increases could have a considerable impact on businesses that hire from abroad, especially start-ups and SMEs. Advice to cope with the increases includes:

• Encouraging workers planning to apply for a UK visa to try to accelerate their application, so they can take advantage of current lower fees before the changes take effect.
• Budgeting for increased recruitment costs.
• Taking a consistent approach to which visa costs the business will cover on behalf of workers (e.g. just the candidate’s costs or costs for the candidate’s family members too? Keep in mind that sponsors must pay the Immigration Skills Charge – it’s unlawful to require the applicant to pay for this as it’s a tax on sponsors).
• Thinking about using clawback agreements which require the worker to pay back a proportion of visa costs covered by their employer if they leave employment within a certain period. Clawback agreements must be drafted by a lawyer to ensure they’re enforceable – speak to an expert if you’re interested in this option.
• Being aware that workers may struggle with personal cash flow during their application and may request support from their employer, for example through employee loans or salary advances. Make sure to seek tax advice if you would like to offer this type of assistance.

Changes to the EU Settlement Scheme (EUSS)

Automatic extension and conversion of Pre-Settled Status

New rules will take effect from September 2023 which will see those in the UK with Pre-Settled Status under the EUSS have their status automatically extended by two years before it expires. They won’t need to apply to the Home Office for an extension.

From 2024, the Home Office intends to convert the status of eligible residents automatically from Pre-Settled Status to Settled Status (also known as “Settlement”, “Permanent Residency” or having “Indefinite Leave to Remain”).

These changes follow a High Court ruling that determined those with Pre-Settled Status:

• must not lose their residence rights simply by not making a second application to the EUSS; and
• are entitled to live in the UK permanently once they’ve continuously lived here for five years.

Employers should ensure they're aware of this change when dealing with right to work checks. Staff undergoing right to work checks should be advised to generate a share code before the expiry of their pre-settled status, rather than to make another application to the EUSS.

It’s currently not clear whether the Home Office will grant someone a two-year extension as a one-off, or if repeated extensions will be given. We’ll be monitoring developments so keep an eye out for updates.

Reasons for making a late EUSS application will affect validity of application

Whether a EUSS applicant has good reason for making a late application will affect whether their application will go to a full assessment. If their reasons are not accepted, the application will not proceed. Employers should be aware that it may now take longer for an applicant's right to work to be established. Depending on time pressures (e.g. start dates), alternative routes to getting immigration permission may be preferable.

This change could also affect employers if a current employee has their EUSS application found invalid. The employee may have to apply for alternative immigration permission or even leave the UK, and they may not be allowed to work while any alternative application is considered.

Expiry date of biometric residence permits

The government plans to replace biometric residence permits (BRPs) with eVisas from 1 January 2025. The government has said updates will be provided during 2024.

In the meantime, employers should be aware that BRPs may currently be issued with expiry dates of 31 December 2024 even if the individual's relevant immigration permission is due to expire after that date.

Additional visa schemes and immigration routes

Scale-up visa

The Scale-up visa is intended to help fast-growing businesses bring in the highly skilled individuals they need. To be eligible, businesses must have seen 20% annual growth in staffing or turnover over the last three years.

Launching in Spring 2022, eligible businesses must have a minimum of 10 employees at the start of the three-year period and must have seen 20% annualised growth in staffing or turnover over the last three year

Youth mobility scheme

The youth mobility visa scheme enables eligible workers to live and work in the UK for up to two years (in some cases, three). This scheme is more flexible and accessible than others – the applicant doesn't need to be sponsored, have a job, or meet any skill or salary thresholds.

Visa applicants must be aged 18 to 30 (in some cases, 18 to 35) and be a citizen of an eligible territory, such as Australia, New Zealand, or Canada. You can see a full list of eligibility requirements here.

While you don’t need to be a sponsor to hire a person holding a youth mobility visa, you do still need to perform a right to work check. Learn more about making pre-employment checks in our full guide.

Intra-company transfer route

If you want to transfer employees from an overseas branch of your company to the UK, you can use the Intra-company transfer route. This route permits people to come to the UK but for no more than five years in any six-year period, though workers can be assigned multiple times.

These workers will still need to be sponsored and will have to have 12 months experience in the company. They will also need to be paid at least £41,500 or the ‘going rate’. However, those earning over £73,900 need not to have worked overseas for 12 months and can stay up to 9 years in any 10 year period.

You can read more here.

General information

For employer-specific information, you can read gov.uk’s publication here, including a podcast, a simple introduction for employers, and a useful infographic on becoming a sponsor of skilled migrant workers.

Snapshot of the main changes that the new system brings for employers...

1. A reduction of the current skills-level requirement down from the current degree level or higher to A-level/equivalent or higher
2. the minimum salary threshold dropped from £30k to £25.6k
3. widened the list to a broader range of roles for which employers can recruit
4. at the moment there is a limit per month on the number of Tier 2 workers (skilled, long term workers) that can be engaged – that has been removed so recruitment does not have to be halted where the need arises