This GMS Flash Alert reports on recent steps taken – and to be taken – by the U.K. government to implement changes to the country’s immigration system.
On 3 November 2016, the U.K. government put forth a Statement of Changes to the Immigration Rules before the House of Commons.1 This will implement the first wave of changes recommended to the U.K. government by the Migration Advisory Committee (“MAC”) earlier this year in relation to Tier 2 sponsored migrants – for example minimum salary thresholds and English-language skills.2 The majority of these changes will come into effect on 24 November 2016, and will apply to applications made on or after that date. The next wave is expected to be implemented in April 2017.3
In addition, the period from 21 November 2016 to 1 December 2016, will see further provisions of the Immigration Act 2016 enacted, which are aimed at strengthening the U.K. Secretary of State’s powers to control immigration and combat illegal migration.
The changes to the U.K. Immigration Rules are likely to impact planning and decision-making within the private and public sectors (for example, by HR and Global Mobility, Talent Recruitment, Resourcing, etc.).
The increases to minimum salary thresholds for Tier 2 visa categories will have cost and resourcing implications for employers that rely on recruitment of non-European Economic Area (EEA) nationals to support their U.K. operations. Small- to medium-sized businesses may struggle with the higher staffing costs, while larger organisations may be challenged by the volume of sponsored workers requiring higher salaries going forward.
Other changes, such as new English-language requirements for public sector workers and the need to test the resident labour market before being able to sponsor nurses, will also increase the time it takes to recruit these workers in the United Kingdom.
The Immigration Act 2016 will bring further enforcement powers into effect, underscoring the fact that the prevention of illegal working and exploitation of migrants remains at the forefront of the U.K. government’s plans. Therefore, businesses ought to make sure that their immigration-related compliance processes are adapted effectively to the ongoing developments in the laws.
Although these changes follow the plan announced earlier this year, it could take U.K. businesses some time to digest the changes, and to consider what they will mean for the way they run their U.K. operations, particularly with the additional uncertainty over recruitment within the U.K. due to the U.K. preparing to leave the European Union.
It is likely that some of the changes will have a serious effect on some business models. The offering of international assignments to the U.K. to attract highly skilled employees may become too expensive, as may be the sending of highly skilled migrants to the U.K. for short-term project work.
The fact that the U.K. government is still looking into which allowances will be permitted to meet minimum salary thresholds for Tier 2 (ICT) migrants is likely to be a further concern for U.K. employers.
The changes to enforcement and penalties are the latest expansion of policies which appear aimed at making life harder for illegal migrants and employers of illegal workers.
Such policies result in augmenting the efforts required to achieve compliance for law-abiding employers and staff. Businesses should be aware that this remains high on the political agenda and they must foster the formulation and implementation of effective policies and procedures to avoid inadvertent non-compliance.
For additional information or assistance, please contact your usual KPMG GMS or People Services professional* or one of the following professionals with the KPMG International member firm in the United Kingdom:
tel. +44 (0) 20 7694 4950
tel. +44 (0) 20 7311 1475
tel. +44 (0) 20 7694 3481
* Please note the KPMG International member firm in the United States does not provide immigration services.
The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.
© 2017 KPMG LLP, a UK limited liability partnership, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative, a Swiss entity. All rights reserved.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.