HR and tax alert

United Kingdom

Executive summaryThe UK Border Agency (UKBA) has made further amendments to the UK immigration system, which came into effect on 6 April 2012. The changes affect the following categories: ► Tiers 1, 2, 4 and 5 of the Points-Based

System ► Visitors ► Domestic Workers The UKBA has also issued a “Premium Sponsor” category for employers, who will be given special privileges such as fast track services with the UKBA. The fee for this service will be £25,000 for companies who paid the higher fee for their license and £8,000 for companies who paid the reduced fee for their license. New rules for visitors The new visitor rules will enable a limited group of professionals to come to the UK for one month or less to carry out an engagement that relates to their particular skill or expertise. They are allowed to be paid for the activity performed. Examples of permitted activities include participation in, or chair of, selection panels; designated air-pilot examiners from overseas to assess UK-based pilots; qualified lawyers to provide advocacy in a particular area of law for the purposes of court or tribunal hearings; and professional artists, entertainers and sports-persons carrying out activities relating to their main profession at the request of a UK-based arts or sports organization.

UK Border Agency introduces significant changes to the UK immigration system from 6 April 2012

Tier 1 (Exceptional Talent) This category applies to talented individuals from the fields of science, humanities, engineering and the arts who want to work in the UK. The UK Government has confirmed that there will be an annual limit of 1000 places for the Tier 1 (Exceptional Talent) route for 2012/13 and 2013/14. Tier 1 (Post Study Worker) This category is closed from 6 April 2012 and the UKBA will not accept any new applications. From 6 April 2012, existing Tier 1 (Post Study Work) migrants looking to switch into Tier 2 (General) no longer have to meet the six-month employment requirement with their UK sponsor in order for the sponsor to be exempt from undertaking the Resident Labor Market Test (RLMT). New Tier 1 (Graduate Entrepreneur) The Tier 1 (Graduate Entrepreneur) category will be introduced for graduates who have been identified by Higher Education Institutions (HEIs) as having developed world class innovative ideas or entrepreneurial skills to extend their stay in the UK. Graduates must hold a Bachelor degree, Masters degree or PhD. There will be a limit of 1000 places that will be divided equally between HEIs. Leave to remain in this category will initially be granted for 12 months and can be extended for a further period of 12 months. At the end of the migrant’s second year, they may be eligible to switch into the Tier 1 (Entrepreneur) category. Time spent in this category does not count towards

April 2012

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settlement and funds required to switch into Tier 1 (Entrepreneur) will be lowered to £50,000 for those registered as self-employed or as a director. Tier 2 (Skilled Workers) Tier 4 (General) (students) migrants can apply to switch into Tier 2 (General) without their employer needing to meet the RLMT. Applicants must have lawfully completed and passed a UK degree, Post Graduate Certificate in Education or Professional Graduate Diploma of Education, or completed a minimum of 12 months study in the UK towards a PhD. New periods of stay for skilled workers There will be a number of amendments to the periods of leave to remain granted to Tier 2 migrants. A maximum period of 6 years in total as a Tier 2 (General, Minister of Religion or Sportsperson) migrant is being introduced (this also applies to those who entered from 6 April 2011) and will be subject to a 12 month cooling-off period once their Tier 2 leave expires. For example, if a Tier 2 Migrant was in the UK for the last 12 months with permission to work and their leave expired on 1 January 2012, they would not be allowed to return until they had spent 12 months outside the UK. The UKBA has also simplified their formula for determining the period granted when considering Further Leave to Remain (FLR) applications that are covered under the transitional arrangements (e.g. work permit holders). From 6 April 2012 a standard 3 years plus 14 days will granted. The standardized 3 year plus 14 days will also be applied to those with leave to remain on Tier 2 (General, Minister of Religion and Sportsperson), or the length of sponsorship if shorter. New settlement provisions for skilled workers With effect from April 2016, Tier 2 (General and Sportsperson) migrants who apply for Indefinite Leave to Remain (ILR) will need to demonstrate they are being paid either a gross salary of £35,000 per annum, or the appropriate rate for their job as stated on the Code of Practice, whichever is higher (with exemptions for those in PhD level and shortage occupation categories). This change will also apply a new minimum pay threshold to these categories. Tier 4 (Students) Tier 4 of the Points-Based System caters for international students who wish to study in the UK. Upon completion of their degree, many students seek sponsorship to work for a UK employer under Tier 2 (General) of the Points-Based System. A number of changes will be made to this category. However, one change that will be of significance to UK employers is the restriction on Tier 4 migrants with regards to undertaking work placements. The Government will be reducing the period of time that can be spent on a work placement from one half to one third of the course. This means that students will have to spend a greater proportion of time undertaking formal study. However, this change only applies to courses below degree level. For degree level or above, the current limit will be retained, under which half of the total course time may be spent on work placement. Tier 5 (Temporary Workers) Tier 5 of the Points-Based System caters for youth mobility and temporary workers coming primarily for non-economic purposes and consists of two categories: Tier 5 (Youth Mobility Scheme) and Tier 5 (Temporary Workers). The UKBA will allow Tier 4 (General) migrants to ‘switch’ into the Tier 5 (Temporary Worker) category, if applying under the Government Authorized Exchange (GAE) scheme to undertake a period of professional training or work experience, as long as it is required to obtain a professional qualification or professional registration in the same professional field as their qualification. Changes are being made to the GAE sub-category which relates to intern, work experience and youth exchange programmes to limit the length of time granted to a maximum of 12 months. Other categories such as research and fellowship will continue to attract permission to stay of up to 24 months. A change is being made to permit sportspersons who enter under the Tier 5 Creative and Sporting sub-category to undertake some guest sports broadcasting work where they are not filling a permanent position. Changes in all tiers of the Points Based System Maintenance funds To reflect the increase in the cost of living and studying in the UK, the UKBA will be increasing the funds applicants will need to provide as evidence of meeting the maintenance requirement. For the Tier 4 and Tier 5 Youth Mobility Scheme, the changes came into effect on 6 April 2012. For Tier 1, Tier 2 and temporary workers under Tier 5 the changes will come into effect on 14 June 2012. The UKBA have also provided clarity on the policy regarding A-rated sponsors who certify maintenance for dependants, stating the certification must be for the first month of the dependant's presence in the UK, rather than the first month of the Tier 2 migrant's employment. Mandatory curtailment of leave The UKBA are committed to curtailing a migrant’s stay in the UK if the employer does not inform them that the person has failed to start or has ceased their work or study with their sponsor. The rules will also set out the limited exceptions to mandatory curtailment. They will normally be given 60 days to make an application to vary their leave (permission to remain in the UK) or change their Sponsor. Premium Sponsor scheme for Tier 2 and Tier 5 A-rated Sponsors who pay the appropriate fee will have a range of optional premium service benefits. The UKBA has stated that the fees will be £25,000 per annum and some of the benefits are listed below: ► A designated Senior Account Manager and License Manager for each sponsor ► Access to the Premium Sponsor support team from 8am - 6pm, 7 days a week ► A simpler application process for the international worker ► Reducing time a worker is without their passport ► Guaranteed access to Public Enquiry Office appointments ► Guaranteed access to premium services overseas, including priority visas and VIP lounges (where available) ► An improved checking and update service ► Updates to licenses made promptly and accurately ► Pre-paid access to automated biometric checking service online ► Attendance at stakeholder events to discuss issues of shared interest.

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Overseas Domestic Worker in Private Households This category enables people coming to the UK to bring their foreign domestic staff, for example nannies, chauffeurs and cooks. The following changes are being made: ► Entry will be limited to a maximum period of 6 months, with no extensions beyond that

time ► Applicants will only be able to enter the UK where they are accompanying their employer

who arrives in the UK at the same time as a visitor or who has come to the UK in that capacity

► Applicants cannot change employer whilst in the UK ► Applicants will not be able to apply for settlement in the UK ► Applicants will not be able to bring dependants to the UK. Next steps It is necessary for organizations to ensure that they carefully assess how these changes will affect their current migrant population and planned recruitment and mobility in the coming year. They should also anticipate and prepare the changes to the settlement rules for Tier 2 migrants, which will come into effect in 2016.

Sue Kukadia Tel: + 44 (0) 20 795 11548 email: skukadia@uk.ey.com Marcia Longdon Tel: + 44 (0) 20 795 19938 email: mlongdon@uk.ey.com

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