Following the recent announcement by the UK Border Agency concerning changes to Tiers 1 and 2 of the Points Based System, UK Work Permits Ltd is now in a position to summarise the key points. The changes highlighted below will be implemented on 6th April 2010. Among the most important points are the following. Tier 1 (General) applicants will now be able to gain points for Bachelor’s degree level qualifications, but will need to have achieved higher earnings in order to claim the same number of points for earnings. Overseas staff transferred to the UK through the Intra-Company Transfer route will no longer be able to qualify for Indefinite Leave to Remain. The ICT route will however be split into three subcategories, offering greater flexibility to employers. The main changes to each Tier are as follows:

Tier 1 General

  • UK equivalent Bachelor’s Degrees will now attract 30 points under the qualifications section. Currently only masters degrees (or higher) are awarded points.
  • The earnings assessment has been revised radically. The changes will mean that potential applicants will need to have earned considerably more in order to gain the same points as they would be awarded under the current rules. No points will be awarded for earnings below £25,000 (the minimum level of earnings to gain points currently is £16,000).
  • Those who have earned over £150,000 p.a. (or overseas adjusted equivalent) will now be awarded 75 points for earnings, enough to qualify without relying on any formal qualifications.
  • Initial leave under Tier 1 General will now be granted for 2 years (rather than 3). An earlier extension point will involve individuals demonstrating suitable UK earnings, so that the UK Border Agency can more effectively monitor and verify the success of the programme.
  • Appropriate adjustments and transitional arrangements will be put in place for extensions in the future, as well as for individuals currently in the UK under Tier 1 (General) or the Highly Skilled Migrant Programme.
  • Tier 1 will not be open to those wishing to operate as professional sportspeople or coaches.

Examples of how the changes may affect individuals.

  • An individual who is 28 years old and has obtained a masters degree in the UK, would need to demonstrate previous earnings of over £30,000 p.a. (or overseas equivalent after the income multiplier is applied) in order to qualify.
  • An individual who is 40 years old and holds a bachelors degree from outside of the UK (and no UK experience) would now need to demonstrate previous earnings of over £75,000 p.a. (or overseas equivalent after the income multiplier is applied) in order to qualify.
  • An individual who is 35 years old and holds a bachelors degree from outside of the UK (and no UK experience) would now need to demonstrate previous earnings of over £65,000 p.a. (or overseas equivalent after the income multiplier is applied) in order to qualify.
  • An individual of any age and with no formal qualifications may be eligible if they can demonstrate earnings of at least £150,000 p.a. (or overseas equivalent after the income multiplier is applied).

There are also adjustments being made to cover doctors and dentists in training.

Tier 2

Tier 2 (General)

  • In line with the changes to Tier 1, the points thresholds for potential earnings will be raised. No points will be awarded for potential earnings of less than £20,000 (the current lowest threshold is £17,000). The threshold for obtaining 20 points has been raised to £28,000, and 25 points will now be awarded for potential earnings of over £32,000.
  • A Masters degree will now attract 15 points (increased from 10 points).
  • The points awarded for sponsorship through the Intra Company Transfer route will be reduced to 25 points (currently 30).
  • There will be a mandatory minimum of £20,000 in relation to prospective earnings in order to qualify under Tier 2, unless qualifying via a shortage occupation or the transitional arrangements.
  • The process for extensions will be simplified. 50 points will automatically be awarded in relation to sponsorship, providing the salary meets the previously set salary and the current appropriate rate.
  • The UK Border Agency will continue to monitor the use of allowances and overseas payments with regards to claiming points for earnings. Rules on these may be revised in the future.

Change of Employment

  • No application will be required if a migrant worker is staying with the same employer but changing to another job within the same Standard Occupational Code (SOC) classification unless:
    • There is a reduction in salary (below that shown on the Certificate of Sponsorship) – unless due to company-wide reductions, or maternity or adoption leave.
    • The migrant goes from a shortage occupation role, to a non-shortage occupation role.
  • A Change of employment application will be needed where the migrant worker is remaining with the same sponsor but changing to a role covered by a different SOC classification.

Intra-Company Transfers

  • The Intra-Company Transfer route will be split up into 3 sub-categories:

Intra-Company Transfers: Established Staff

  • Same purpose as existing ICT route.
  • Maximum duration is to be the same as with Tier 2 General (3 years with further extensions possible).
  • This route will now not lead to settlement (ILR) in the UK (except for those granted leave in this category under the current rules and seeking extensions).
  • 12 months minimum experience needed with the overseas branch.
  • Minimum skill level: N/SVQ 3.
  • Switching to Tier 2 (General) will only be permitted if the migrant worker is going to be working for a different sponsor.

Intra-Company Transfers: Graduate Trainees

  • Designed for recent graduate recruits to transfer to the UK as part of a structured graduate training programme.
  • 3 months minimum prior employment with the company overseas.
  • Maximum stay: 12 months (will not lead to settlement).
  • Only applies to a published list of graduate occupations.
  • Maximum of 5 places per sponsor per year.

Intra-Company Transfers: Skills Transfers

  • No experience required with company overseas – can apply to fresh overseas recruits.
  • Designed to allow the individual to acquire or impart specific knowledge or skills, for example to familiarise themselves with the company’s structure and practices by visiting the head office in the UK.
  • Maximum stay: 6 months (will not lead to settlement).
  • Only applies to a published list of graduate occupations.

Other Future Potential Changes

  • A new status of “Highly Trusted Sponsor” will be implemented for Tier 2. This will allow businesses able to meet the relevant criteria with a more streamlined approach.
  • The government is currently considering a certification regime in relation to the Resident Labour Market test.
  • The UK Border Agency may begin to work with HM Revenue and Customs in order to investigate potential abuses of the tax system and immigration system.
  • The earnings multipliers used for Tier 1 (General) applications are likely to be revised in the near future to bring overseas earnings more fairly in line with UK earnings.
  • The government may review the current policy of allowing Tier 1 (Post Study Work) visas to be available to international students who have obtained any degree level qualification from any UK university.
  • Further action may follow research being carried out on the success of individuals who take the Post Study Work route, and whether this route is a significant factor in international students deciding to take courses in the UK.
  • Research and analysis is to take place regarding the Tier 1 (Entrepreneur route) – action may follow on from this.

For advice on how you or your organisation may be affected by these changes, please contact us now on 0845 226 4030 or info@uk-wp.com and speak to one of our consultants.