Migration Advisory Committee rules: Why making firms pay £1,000 for new hires is anti-business

Jonathan Beech
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Hiring from abroad will be harder from 6 April (Source: Getty)

After four months of waiting, recommended changes to the immigration rules relating to skilled workers from outside Europe have been announced by the Migration Advisory Committee (MAC). Should the changes be written into law, they will apply from 6 April this year.

The recommendations are the biggest changes to sponsored employees since 2010, yet businesses hardly have time to plan.

It was clear from the outset that financial penalties were to be introduced for the majority of sponsored workers but the extent of this could be extremely damaging to UK business with little or no time to prepare.

Apply for a sponsored worker visa from 6 April, and you could be faced with a bill for an extra £1,000 per year of your intended stay under a so-called immigration skills charge. This is before any of the increased visa fees or healthcare surcharges are taken into account.

Read more: The UK is one of the top 10 countries for attracting skilled migrants

Oh, and this is payable up-front, so a five year visa will cost £5,000.

The category of skilled workers most hit will be the so-called Intra Company Transfer (ICT) route. This allows multinational companies to transfer key personnel from their overseas branches to the UK for temporary periods.

Typically these employees are paid far more than local employees of similar experience, and have to be employed by the company overseas for at least 12 months. With little warning, before 6th April, ICTs will now need to have two years of overseas employment with the company before being eligible to enter the UK.

With only 10 weeks left until the changes many hundreds or more of work transfers, planned and contracted in advance, will be cancelled, proving extremely costly for organisations that have trained individuals for specific contracts.

Furthermore it has been recommended that the government introduce a new category for IT companies called the third-party contracting route. This category will mean minimum qualifying salaries rise from £24,800 (the current Short Term staff limit) to £41,500 for all workers. It is anticipated 47 per cent of workers will be adversely affected. In the months/years to come, IT companies will be limited to the number of sponsored workers they can employ.

The attractiveness of the UK to overseas students will be shattered further by news that on graduating and finding a skilled job vacancy within the UK they will need to go through a Resident Labour Market Test, where the vacancy is advertised to give settled workers the chance to respond.

In essence the test is a good idea and protects the UK labour market, but those overseas students with excellent minds – especially within the sciences could be shut out.

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