Increase in Cost of Hiring Tier 2 Migrants
In April 2017 the rules on immigration for general migrants known as Tier 2 were amended. For businesses, the main issue was the introduction of the immigration skills charge. This charge is levied against businesses and is different depending on the size of your business.
For many businesses this charge will present an added cost pressure that will reduce their margin, the government has been roundly criticised by the business community for adding the charge which some companies see as a hidden tax on employing immigrants.
The costs for the skills charge is £1,000 per Tier 2 migrant per year for large and medium businesses an £364 per year per migrant for small businesses which are defined as having a turnover of less than £10.2m or fewer than 50 employees.
The charge is levied at the time of Certificate of Sponsorship is assigned and is for a period of one year, there are a few exceptions to the rule and these are related to specific circumstances, so it may be worth checking in advance whether you qualify for this exemption.
The British government is desperate to reduce migration and to make domestic workers more attractive to business, whether this will actually happen as a result of these charges is unknown but companies are ever increasingly looking at ways to take cost out of the business and these charges may actually make some difference.
The main problem with hiring domestic workers in the UK appears to be poor levels of skills with these staff. Traditionally companies have had to bring in skilled migration to cover skills gaps in the UK, this was enhanced significantly when the EU area expanded in 2004 and several countries citizens were eligible to move to the UK to work.
Brexit has thrown a high level of uncertainty into the mix as far as future migration to the UK is concerned. These new charges that are being levied seem counterproductive to the UK's long-term needs and are likely to be changed significantly in the next few years. But the current predicament around the government's approach to migration seems totally at odds to what the business community appear to actually need.
While negotiations are ongoing it appears that at the very least the future of migration will be kicked into the long grass, almost all concerned now concede that the UK will need a significant transitional period of leaving the EU to facilitate the huge amount of changes that will need to take place.
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