Proposed Changes of Tier 2

We are clear that the immigration system can play a strong part in supporting growth, filling skills gaps in our labour market and meeting the needs of businesses. Our response aims to balance both the needs of employers and our commitment to support and up-skill the resident labour market. The changes we are making are as follows:

For Tier 2 (General)

• We will increase the Tier 2 (General) minimum salary threshold to £25,000 in autumn 2016, and £30,000 in April 2017 for experienced workers, whilst maintaining the current threshold of £20,800 for new entrants
• We will weight overseas graduates more heavily in the Tier 2 (General) limit and enable graduates to switch roles within a company once they have secured a permanent role at the end of their training programme.
• We will waive the Resident Labour Market Test and give extra weighting within the Tier 2 (General) limit where the allocation of places is associated with the relocation of a high-value business to the UK or, potentially, supports an inward investment.
• Nurses, medical radiographers, paramedics and teachers in mathematics, physics, chemistry, computer science and Mandarin, will be exempt from the new salary threshold until 2019.
• Nurses will remain on the Shortage Occupation List but employers will need to carry out a Resident Labour Market Test before recruiting a non-EEA nurse.
• We will not implement the MAC’s recommendations that students switching from Tier 4 to Tier 2 should be included in the annual limit and be subject to the Resident Labour Market Test. We recognise the importance of maintaining our excellent offer for international students looking to undertake skilled work in the UK after their studies.

For Tier 2 (Intra-Company Transfer (ICT))

• We will simplify the visa system for both applicants and sponsors by requiring all intra-company transferees (except graduate trainees) to qualify under a single route with a minimum salary threshold of £41,500. By April 2017, we will have closed the Skills Transfer and Short Term visa categories to new applications.
• There will continue to be a separate ICT category for graduate trainees, with a lower salary threshold of £23,000 and an increased limit of 20 places per company per year, rather than 5 places as at present.
• We will lower the high earners’ threshold from £155,300 to £120,000 for transferees looking to stay in the UK for between 5 and 9 years.
• We will remove the one year experience requirement for transferees paid over £73,900.
• We will require all transferees to pay the Immigration Health Surcharge and review the use of allowances.
• We will not implement the MAC’s recommendations that ICTs should be required to have worked for their company for two years, rather than 12 months, or that transferees working on third party contracts should be restricted to a separate category.

Across both Tier 2 routes

• The Immigration Skills Charge will be levied on Tier 2 employers at a rate of £1,000 per person per year from April 2017. A reduced rate of £364 per person per year will apply to small and charitable sponsors. PhD roles, Tier 2 (Intra-Company Transfer) Graduate Trainees, and Tier 4 to Tier 2 switchers will be exempt.
• The transitional arrangements for workers sponsored at NQF levels 3 and 4 will be closed over the next two years.
• The Immigration Rules for work categories will be simplified, making them easier for sponsors and applicants to understand.

In setting these new rules, we have consulted widely and taken into account the views of employers. To give sponsors time to prepare, we are not making changes immediately and will introduce our reforms in two stages – in autumn 2016 and April 2017.