Wednesday 26th Apr 2017

Recruitment: £1,000 Immigration Skills Charge hits businesses

The introduction of the Immigration Skills Charge has made it more expensive for UK employers to hire skilled workers from outside the European Economic Area (EEA) or Switzerland.

Workers from outside the EEA must be sponsored before they can apply for permission to work in the UK.

Employers must pay the charge for every sponsorship certificate they assign to a skilled worker. The charge is set at £1,000 per worker per year, reduced to £364 for small firms, charities and universities.

The Government’s aim, it says, is to “reduce demand for migrant labour” and to encourage businesses to train UK workers for skilled roles instead.

Immigration law expert Joanne Hennessy, of law firm Pinsent Masons, says: “This will be of particular concern for businesses that rely heavily on migrant workers. These additional costs may well dissuade some multinational businesses from shorter-term transfers into the UK of group employees.

“Set against the backdrop of Brexit, this new charge could become a key aspect of the Government’s immigration policy as the objective to encourage a shift towards employing UK-settled workers gathers pace.

“On the whole, employers sponsor migrants because they have particular skills or experience that they need in their business. So while smaller businesses could feel the pinch, it is probable that lucrative businesses will simply accept this as an additional cost to be absorbed in the recruitment process.”

The new charge has been introduced in line with the recommendations of the Migration Advisory Committee, which provides the Government with independent advice on immigration policy.

There are exemptions to the charge for PhD-level jobs and for international students switching from Tier 4 ‘student’ visas to Tier 2 ‘working’ visas. Intra-company transfer graduate trainees will also be exempt from the charge.

“A levy on EU hires as well would add unnecessary expense and bureaucratic obstacles to hiring the people that companies require to fill the gaps, on top of the unwelcome Immigration Skills Charge for non-EU workers.”

Rob Johnston, Chief Executive of Cumbria Chamber of Commerce, said: “Businesses already report recruitment difficulties, and are struggling to find all the skills they need here at home.

“We have to remember that Brexit will make the UK less attractive to migrants from the rest of the world, as it will no longer be a gateway into the EU.

“Small businesses in particular would be hit by such a cost.

“Companies in the UK already face a plethora of upfront costs, and can’t afford any more. Imposing what is effectively a further tax on UK firms may simply mean that they choose not to recruit or expand as planned.”