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Education Immigration e-briefing: Tier 2 - thinking ahead

  • United Kingdom
  • Education - Briefings


Institutions who are sponsors under Tier 2 will be giving careful thought at the moment to their request for the new year’s (April 2016 – March 2017) allocation of certificates of sponsorship and looking at next year’s budgets.  When assessing this need sponsors should consider:-

  • are there any sponsored workers who will need to extend their leave in the UK under Tier 2 in this period?
  • what international assignments to the UK are under consideration?
  • where are the current recruitment hot spots and do they bring any challenges in relation to availability of skilled candidates?
  • in light of this need what costs are associated with Tier 2 support for the next financial year?

There is usually a degree of crystal ball gazing in this exercise and sponsors can take some comfort from the fact that additional certificates can be requested during the year if this assessment is not quite right.

This year however employers have a further challenge on the crystal ball gazing front as we await the Government’s response to the recommendations of the Migration Advisory Committee (MAC).  In the Summer of 2015 the Government requested that the MAC advise on a number of potential changes to Tier 2 of the points based system to address concerns about the rising number of migrants in that route and reliance on them to fill shortages. The MAC consulted in the Autumn and have recommended a wide range of changes including:

  • a new charge on employers who recruit from outside the EEA, likely to be at least £1000 per year for each non-EEA worker employed;
  • an increase in the minimum amount that a non-EEA worker must be paid in order to qualify as a skilled worker under the immigration rules to at least £30,000 in most cases;
  • All in-country switches should be subject to the resident labour market test (RLMT) - including those switching from Tier 4.

The recommendations are with the Government and although nothing is certain we expect many, if not all to be implemented, probably in April and October of 2016.

Let’s take a closer look at some of the key recommendations and how they might impact on the Tier 2 landscape:

New Immigration Skills Charge and extension of International Health Surcharge

The MAC has endorsed the Government’s proposal that businesses recruiting from outside the EEA should pay an ‘Immigration Skills Charge’ to discourage reliance on migrant workers and encourage investment in training and up-skilling for UK workers. Only Tier 2 Graduate Trainee and Skills Transfer would be exempt from this charge.

The amount of the charge will be for the Government to decide upon. The MAC suggests an appropriate amount would be £1,000 per year of the visa applied for. So the charge due on a 3-year visa would be £3,000 and on a 5-year visa £5,000.

New legislation will be needed to bring the charge into effect. The first step in that direction has already been taken, with the Immigration Bill currently going through the Parliamentary process. It will be some time before that process is complete, meaning the skills charge is unlikely to take effect before October 2017.

These changes will not limit or prevent the use of Tier 2 directly of course but will most certainly have an impact on the bottom line.  Taking into account annual visa fees increases the direct cost of a 3 year Tier 2 (General) hire with three dependants will increase from £5,023 to £8,023.

Higher salary thresholds

Under the current rules, all Tier 2 (General) employees must be employed in a job with an annual salary of at least £20,800. In addition there are minimum salary requirements for specific occupations: where an occupation-specific threshold is higher than £20,800, the migrant must have a job at that higher rate (either new starter or experienced rates as applicable) to qualify for a visa.

The MAC has recommended that the overall threshold be raised to better reflect the higher qualifications that migrants now need in order to apply under this route. It recommends that it should be set at £30,000, with a lower threshold of £23,000 applying to those classed as ‘new entrants’. The MAC’s view is that there should, however, be no change to the basis on which occupation-specific thresholds are set rejecting the idea of a regional assessment.

Limits on Tier 2 General

Ordinarily an employer wishing to use Tier 2 General must meet the requirements of the RLMT.  There are a number of exceptions to this, primarily where an international student moves from Tier 4 to Tier 2.

The MAC expresses support for this to end and has recommended that all moves in the UK into Tier 2 (General) (unless the role is on the shortage occupation list) should require an RLMT.

If this recommendation is accepted by the Government employers will need to review carefully their graduate recruitment programmes to ensure that they meet the RLMT requirements  through the milk round or advertising options.


We have had a relatively stable couple of years in terms of Tier 2 and given the ongoing focus on migration, not least the Brexit debate, it was perhaps inevitable that we would see the MAC recommend some deep cutting changes. For all employers the impact on the cost of Tier 2 will require a close look at the cost benefit analysis – this is exactly the Government’s objective of course.

We await the Government’s response.

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