Immigration Act 2016 – Skills Charge

What is changing?

Part 8 of the Immigration Act 2016 introduces an Immigration Skills Charge (via the Immigration Skills Charge Regulations 2017) from 6 April 2017 on UK employers recruiting skilled migrant labour from outside the EEA through the Tier 2 visa route. The stated aim of the charge is to incentivise employers to invest in training and upskilling the resident workforce, thus reducing reliance on migrant workers.

The new provisions

Employers will pay £1,000 per Tier 2 migrant sponsored per year, with a reduced rate of £364 per migrant per year for small and charitable sponsors.

For occupations skilled to PhD level, students switching from Tier 4 to Tier 2, and the Intra Company Transfer Graduate Trainee category, the tier 2 sponsor will not be required to pay the immigration skills charge. The charge will contribute to funding training in the UK.

Skilled worker

A skilled worker is defined as a worker who is required to be sponsored in a job that is skilled to level 4 or above of the Regulated Qualifications Framework, as applied by the immigration rules from 6 April 2017; is remunerated appropriately in accordance with the immigration rules; and who either (i) has been the subject of a resident labour market test as defined by the immigration rules (unless an exemption from the obligation to undertake that test applies) or (ii) will be applying for leave as an intra-company transfer. (An intra-company transfer involves the transfer of an established employee of a multi-national company who is temporarily transferred from outside the EEA to the UK branch of their organisation to undertake a skilled job which cannot be carried out by a new recruit.) The effect of the definition is to apply the immigration skills charge to sponsors of those seeking entry and stay in the UK under the provisions currently set out in the Tier 2 (General) and Tier 2 (Intra Company Transfer) categories of the immigration rules, subject to certain exemptions and transitional provisions.

The certificate of sponsorship

A sponsor will be liable to pay the charge at the point that it assigns a certificate of sponsorship to a skilled worker. The certificate of sponsorship itself is an integral part of the visa application process. In order to employ a skilled worker from outside the European Economic Area, an employer must first be licensed as a sponsor by the Home Office. A sponsor licence enables an employer to assign certificates of sponsorship online. The certificates set out the details of the individual being sponsored and the job they are being sponsored to do. The certificate of sponsorship is a precursor to an application by the worker for entry clearance or leave to remain. Sponsorship provides evidence that the migrant will fill a genuine vacancy that can’t be filled with a suitably qualified or skilled settled worker. It also requires employers to accept certain duties expected when sponsoring a migrant worker, for example ensuring that the employee continues to be employed in an appropriate role and paid an appropriate salary, and reporting any significant changes in their circumstances.

The skills charge is just one of the changes in the new Immigration Rules which are being introduced on 6 April 2017 and which will affect most UK visa categories. Further information about other changes is found at

A summary of other relevant provisions of the Immigration Act 2016 is available for Emplaw Online subscribers here