I INTRODUCTION TO THE IMMIGRATION FRAMEWORK

i History

Legislation forms the bedrock of the UK’s immigration system – common law (which is a feature of so much UK jurisprudence) has little or no relevance.

However, immigration legislation is of relatively recent origin, as the first relevant statute was the Aliens Act 1905, which permitted aliens (i.e., non-British or non-Commonwealth citizens) to be admitted to the country only through certain specified ports of entry and which also gave immigration officers the power to refuse to admit ‘undesirable aliens’. The definition of undesirability was usually based upon the likely ability of the alien to support and maintain him or herself in this country – which remains a requirement up to the present day.

Upon the outbreak of the First World War in 1914, the Aliens Restriction Act appeared on the Statute Book, which imposed severe restrictions upon aliens and required them, for the first time, to register with the police. This requirement survives to the present day in relation to nationals of certain countries, and whether they are required to register is largely dependent upon the political relationship between the UK and those countries of which they are citizens.

In 1953, for the first time, aliens who came to the UK for purposes of employment were required to be issued with a work permit from the Department for Employment, which took into account the local labour market and, on a broader basis, the country’s economic situation from time to time.

Until 1962, citizens of the British Commonwealth were not subject to immigration control. This changed when the Commonwealth Immigrants Act 1962 came into force, which made a distinction for immigration control purposes between citizens of the UK and the Commonwealth on the one hand and citizens of independent Commonwealth countries on the other. The latter group was subject to immigration control, whereas the former was not. The same theme continued with the enactment of the Commonwealth Immigrants Act 1968, which further restricted the rights of Commonwealth citizens. Holders of UK passports were divided into two categories: those who had at least one parent or grandparent born, adopted or naturalised in the UK (not subject to immigration control), and those who had no ancestral connection with the UK (who became subject to immigration control).

By 1971, the UK system of immigration control was a hotchpotch of legislation, which had been enacted primarily to deal with the potential threat of ‘enemy aliens’, as well as the increasing numbers of people coming to the UK from Commonwealth countries to either live or work.

The first major parliamentary effort to establish a coherent immigration policy that was to apply to all non-UK citizens who sought entry to the UK was the Immigration Act 1971.

Although the 1971 Immigration Act still provides the framework of the UK’s immigration system, it was primarily enabling legislation, and the UK’s immigration process is governed by Immigration Rules that are laid before Parliament from time to time by way of statutory instrument. Very rarely are these Immigration Rules debated – even though they set out the detail of the conditions attached to those coming to the UK for purposes of work, study and for any other reason. The current Rules appear in HC395, which has been amended numerous times since it was implemented in 1994.

The Immigration Act 2016 is the most recent piece of legislation that has strengthened the enforcement of illegal working in the UK. The 2016 Act prevents illegal migrants from accessing essential services and introduces new measures to enforce existing immigration laws and remove illegal migrants.

Increasingly, however, decisions by the senior judiciary play an important role concerning the manner in which legislation is both interpreted and applied. The English High Court has shown itself willing to take on the government in its enforcement of immigration policy where it is felt that the government has acted unconstitutionally. In this regard, probably the most important recent decision has been R (Alvi) v. Secretary of State at the Home Department,2 in which the Supreme Court ruled that the enforcing of ‘policy’ or ‘policy guidance’ issued by the immigration authorities did not have the force of law, and would not until or unless such policy guidance was incorporated within the formal statutory framework.

The UK’s immigration landscape is changing even more. The decision by the British electorate to leave the European Union following the referendum on Thursday 23 June 2016 has created widespread speculation as to how Brexit might affect EU migration to the UK and vice versa. On 29 March 2017, the Prime Minister notified Brussels of the UK’s intention to leave the EU by invoking Article 50 of the Treaty on European Union (TEU). This commenced a two-year process of exit negotiations (unless an extension to the time limit is agreed), which, at the time of writing, is still ongoing. The implications of Brexit on EU migration have been the subject of much speculation. Section V outlines the consequences and the future relationship between the UK and the EU. EU law and in particular its free movement rules permit EEA nationals and their immediate dependants to travel and work within Europe, including the UK, without any express immigration approval being required. As EU law supersedes UK domestic law, the restrictions set out in this chapter applicable to the citizens of non-EEA countries do not apply as they otherwise would. We will refer below to EU regulations, but it is important to note that the ultimate tribunal for determining EU law (for the time being) is the European Court of Justice and not the UK Supreme Court, while the UK remains a member of the EU. It is important to note, in the course of this chapter, that any restrictions in the UK’s immigration framework in respect of EU nationals will depend on whether agreement is reached between the EU and the UK on the free movement of people, and on what terms.

ii Responsibility for immigration control

The Home Office is the government department with ultimate responsibility for administering the immigration system through a division known as UK Visas and Immigration. All immigration and nationality decisions are made by UK Visas and Immigration, both domestically and overseas. Individuals who either wish to enter the UK for employment purposes, or who are deemed eligible to do so, must first obtain visas or entry certificates from UK consulates abroad before coming to this country – unless they fall into an immigration category that permits them to vary their status in-country.

UK Visas and Immigration does not have agency status within the Home Office but sits as an integral part of the Home Office itself, reporting directly to ministers. It largely covers immigration and consular processing, as well as immigration law enforcement. A Strategic Oversight Board has been created for all constituent organisations within the immigration system, which includes immigration policy, the Passport Service and the Border Force. This Board is chaired by the Home Office Permanent Secretary.

Although British consulates are primarily administered by the Foreign and Commonwealth Office, all immigration decisions within those consulates are taken by either Home Office or Foreign and Commonwealth Office officials known as Entry Clearance Officers.

The Home Office has wide-ranging functions, including the administration of government immigration policies, representing the government in the UK’s immigration appeal system and close liaison with the Migration Advisory Committee (MAC), an independent body established by the most recent Labour government to provide, from time to time, recommendations concerning the impact on the UK’s labour market of various work-based immigration routes.

Since May 2010, the emphasis of government policy has been largely directed towards restricting the numbers of overseas migrants seeking entry to the UK to work or study. Government statistics apparently showed that, over the decade to 2010, net migration (i.e., the difference between those exiting the UK and those entering the country) reached 196,000 per year. It was claimed by the then Prime Minister that, of that number, only 27 per cent represented EU migration to the country, although the government became increasingly alarmed that, with post-2008 financial crash austerity measures taking their toll on southern and eastern European countries in particular, EU migration to the UK was rising year on year. The government made a rod for its own back by announcing in November 2010 a flagship policy that it intends to reduce net migration to the tens of thousands. Of course, such a level has not previously been within the government’s control in view of the free movement provisions within the European Union. In the months leading up to the 2016 referendum, Brexit campaigners seized the initiative to draw attention to the fact that EU free movement rules make it harder to limit immigration. As alluded to above, the position may be subject to change following post-Brexit negotiations between the UK and EU. The Prime Minister has repeatedly confirmed that immigration control is a government priority in the ongoing negotiations, although the outcome of the referendum may already have had the desired effect, with net EU migration to September 2017 being 90,000, its lowest level for five years.

A further Home Office responsibility is policing the UK’s borders, with immigration officers at ports of entry alone having the authority over who to admit to the UK and on what terms. Those refused entry have no immediate right of appeal (and in certain instances, have no right of appeal at all) at the time of a refusal to grant entry and must leave the country, usually on the next available flight. One advantage of the increased requirement for those coming to the UK to work and study to be in possession of entry certificates or visas before being permitted to travel to the UK is that fewer arbitrary decisions are now being made at the entry ports.

Finally, the Home Office is responsible for policing the wide-ranging ‘Legal Right to Work’ requirements, introduced by the Asylum, Immigration and Nationality Act 2006. While initially employers have the day-to-day obligation to ensure that each of their employees has legal permission to take up employment, the Home Office will monitor the manner in which individual employers are complying with these duties. Substantial sanctions, including both severe financial penalties and imprisonment, can be imposed upon not only the employer organisation itself, but also on any director or manager of the employer who has circumvented or failed to properly apply the right to work obligations set out within the 2006 legislation.

II INTERNATIONAL TREATY OBLIGATIONS

i Overview

Of greatest relevance (in any event until 29 March 2019) in any examination of UK business or employment options is the Treaty of Rome, which launched the European Union (as it is now known following the Maastricht Treaty), and the subsequent successor treaties that reaffirmed the free movement labour rights and rights of establishment of all citizens of member countries.

The right of EU citizens and their families to move and reside freely within the territory of another Member State has been binding on all Member States following Directive 2004/38/EC, which was implemented on 30 April 2006. This was a consolidating directive that replaced all the earlier directives and regulations relating to entry and residence within the EU.

The implementation of this Directive in UK law is set out in the Immigration (European Economic Area) Regulations 2006, although these Regulations are not fully in accord with the somewhat broader 2004 EU Directive.

The free movement of workers provision is expressly contained within Article 45 of the Treaty on the Functioning of the European Union, which permits citizens of Member States to undertake employment within any other Member State and to move freely within Member States for this purpose. This freedom of movement requires the abolition of any discrimination based on nationality between workers of Member States as far as employment, remuneration and other conditions of work and employment are concerned.

The only limitation on this very broad freedom is where exclusion of a citizen of a Member State is justified on the grounds of public policy, public security or public health. Only rarely are these limitations exercised (e.g., usually where entry of an EU citizen to another Member State could potentially result in major public disorder).

Although Article 45 does not make any reference to people seeking work (as opposed to those who have already secured employment), by inference, freedom of movement is extended to all persons who wish to enter another Member State to find work. The European Court of Justice has previously held that if a person entered another Member State to find work, but failed to do so within six months, it was not unreasonable to remove that individual. Having said that, a jobseeker is a ‘qualified person’ under the 2006 UK Regulations, and even after a six-month period, if the individual can establish that he or she is still seeking employment, they cannot be removed.

The same rights of free movement to EU employees are also granted to the self-employed, the self-sufficient and students, and in the UK such persons are entitled to be regarded as permanent residents (i.e., settled in the UK) after five years’ residence.

Directive 2004/38 grants parallel rights to the EU national’s third-country family members – although usually their entitlement to continue living in the UK after either the breakdown of their relationship to the EU national (if a spouse), or following the departure of the EU national to another state can only be exercised in rare circumstances.

Until 1 May 2004, all new countries joining the EU were granted unrestricted access to the UK labour market. However, with effect from 1 May 2004, eight of the 10 countries that joined the EU on that date were subject to restrictions relating to the ability of their citizens to secure and undertake employment. The 10 countries that joined the EU on 1 May 2004 are Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia. Of these 10 countries, only the citizens of Cyprus and Malta were entitled to full exercise of free employment rights in the UK, whereas citizens of the remaining eight countries (the A8 countries) were subject to a registration process. The requirement to register before being able to take employment was removed for the A8 countries by the UK government in April 2011.

In January 2007, Bulgaria and Romania became EU Member States. Citizens of these countries were accorded even less access to the UK labour market than was the case with the eight countries three years earlier. They had no free access to the UK’s labour market, and to the extent that they could work (with the benefit of work permits and subject to a registration process), the jobs they could undertake were limited to listed categories. It can therefore be seen that since 2004, the previous willingness of the UK government to freely open its labour markets to citizens of Member States has become more restricted. This degree of derogation from standard EU principles of free movement is permitted by the Treaty of Accession, and Bulgarians and Romanians only became entitled to the full free movement provisions of the EU on 1 January 2014.

However, further restrictions to free movement rights were created by the British government in advance of Croatia officially becoming a member of the EU on 1 July 2013. Under the European Union (Croatia Accession) Act, a number of arrangements were announced that gave Croatian nationals access to the UK labour market, but continued to subject them to employment restrictions under our current Immigration Rules in exactly the same manner as that applicable to third-country workers. Croatian nationals are only entitled to obtain permission to work in skilled occupations and, as they are subject to the provisions of the Immigration Act 1971, their ability to enter or remain in the UK for work purposes is, and will remain, subject to meeting the requirements of the points-based system (PBS) (see below). From 1 July 2013, Croatian citizens are free to enter and remain in the UK for up to three months, but are not free to work. Companies who wish to hire Croatian workers are obliged to do so subject to the operation of the PBS and, even where they qualify for such employment, they are not be eligible to commence work until an Accession Worker Registration Card (AWC) has been issued by the Home Office. Applications for these cards can now be approved in one day at the Home Office Premium Service Centres around the UK. Home Office permission, however, is still required to assign a certificate of sponsorship before a Croatian citizen can apply for permission to stay in the UK in a working capacity. These restrictions are likely to be lifted before the end of 2018.

ii EU association agreements

Since the early days of the EU, association agreements have been entered into with a number of non-EU countries. Since these treaties were signed, many of the countries to which they have applied have become full members of the EU, including the Czech Republic, Hungary and Poland.

Of those agreements still in place, the most important is the Agreement Establishing an Association between the Republic of Turkey and the European Economic Community (the Ankara Agreement), which has been in place since 1963. Under the Ankara Agreement, Turkish citizens can enter the UK for the purposes of establishing themselves in business either as a sole trader, in partnership or in a UK-registered company.

Turkish citizens who wish to be established in the UK must show that they can fund their proposed UK business enterprise, that the money they are investing is their own and that their share of profits of the business will be sufficient to maintain and accommodate them and any dependants without recourse to employment (other than their work for the business itself).

Additionally, they must establish that they have a controlling interest in the company, will be actively involved in its promotion and management, and that the assets of the business will be owned either by the company or the commercial vehicle that is the subject of the investment.

Unlike the UK’s domestic ‘business entrepreneur’ provisions, there is no minimum amount of funds required to be invested by Turkish nationals under the Ankara Agreement. It merely needs to be sufficient to capitalise the business and to enable it to generate profits in due course.

Although the operation of the Ankara Agreement is of substantial benefit to entrepreneurs or business people who wish to establish a commercial operation in the UK, it is limited to that category alone and does not apply to or give any automatic employment rights. Turkish citizens’ family members will similarly be eligible to be granted dependants’ visas for the same length of stay as that permitted to the primary applicant.

iii The General Agreement on Trade in Services and other free trade agreements

For many years, the UK has permitted contractual service suppliers and independent professionals to enter the UK for work purposes under the General Agreement on Trade in Services or other similar trade agreements. These will include the EU–CARIFORUM Economic Partnership Agreement, the EU–Andean Multiparty Trade Agreement and the EU–Chile Free Trade Agreement. However, this immigration category has been restricted and a successful applicant is only permitted to stay in the UK for a maximum of six months in any rolling 12-month period.

Effectively this means that, following the initial length of approval of six months, an applicant under these agreements must remain outside the UK for six months before being permitted to re-enter for a new six-month period. Inevitably, this category has become less attractive in view of the short and intermittent periods of work and residence that are permitted.

iv Diplomats and private servants in diplomatic households

Presently, overseas government employees and private servants in diplomatic households are granted leave to enter the UK for up to two years. Overseas government employees themselves can thereafter extend their permission to stay in the UK for up to 12 months at a time, until they have spent a maximum of six years in the country, at which time they will be required to leave. No change is envisaged to their situation in the foreseeable future, but major changes took place for domestic workers in diplomatic households after 6 April 2012. They will now be granted leave to reside and work in the UK, initially for 24 months, and this will be extendable up to a maximum period of five years. While they have previously been permitted to apply for settlement, after five years’ continuous stay in the country, this entitlement has now been removed.

Iii EMPLOYER SPONSORSHIP

i Recent history

Over the past half century, a variety of routes became available to those who wished to enter the UK for working purposes, or to establish or join a commercial enterprise. By 2005, the government claimed that there were nearly 80 such routes available, which were based upon a number of disparate provisions, both within and outside the Immigration Rules. Although the majority of overseas migrants coming to the UK as employees held work permits, numerous other discretionary routes were available outside the Immigration Rules, including personal domestic servants, employees in diplomatic households, academic visitors and foreign lawyers.

The work permit system was relatively straightforward and required a prospective UK employer to submit a work permit application form to Work Permits (UK), which was considered by Home Office officials within the parameters existing at that time. By the early part of the past decade, the majority of those to whom work permits had been issued were required to obtain entry clearance from a UK consulate in their home country or place of residence before being permitted to enter the UK to take up employment.

In February 2005, the (then) Prime Minister, Tony Blair, announced that the government wished to dramatically alter the immigration landscape by sweeping away many of the various employment-based immigration routes, reducing them to five categories or ‘tiers’. Persons who fell into any of the five tiers would have their applications determined by an objective PBS linked to salary, academic qualifications and skill levels. This structure was intended to remove any element of discretion concerning who was, and who was not, permitted to enter the UK for work purposes.

This dramatic change was coupled with an intention to make employers themselves responsible for assigning work approvals (to be known as certificates of sponsorship), based upon the objective application of the number of points achieved by a particular overseas migrant. For compliance checks to be more easily be carried out by the Home Office, any employer wishing to employ overseas migrants pursuant to certificates of sponsorship is required to hold a sponsor’s licence permitting it to do so. A complex series of passwords and user IDs are provided to each employer sponsor and all relevant information about an overseas migrant is held in a central government computer bank called the Sponsor Management System.

In view of the radical nature of these changes, they took over three years to be implemented. By November 2008, the PBS with its five tiers had been rolled out and since then the most radical changes to the employment categories of the UK immigration process have been operational.

ii PBS – the current regime

Although some employment routes do not fall within the PBS and the five tiers, the vast majority do, as set out below:

  1.  Tier 1 – for investors, entrepreneurs, those with ‘exceptional talent’ and graduate entrepreneurs;
  2.  Tier 2 – applicable to highly skilled employees performing graduate level roles, divided into subcategories of intra-company transfers (ICTs), ‘new recruits’ and the highly paid;
  3.  Tier 3 – unskilled jobs (Tier 3 has never been implemented, probably because of the availability of unskilled labour from the EU, although this may change after the UK leaves the EU);
  4.  Tier 4 – students; and
  5.  Tier 5 – myriad different categories, including those permitted to come to the UK under youth mobility schemes (primarily replacing the old working holidaymaker route available to young Commonwealth citizens), government-approved exchanges, those wishing to undertake internships and those of high ability in the arts, sports and entertainment sectors.

In any of the above categories, only those who secure the requisite number of points are eligible to seek entry to the UK for the purposes of employment or study. Of the employment-based routes, the following are the most prevalent and the most widely used by UK companies who need to employ migrant labour.

iii Self-sponsoring categories
Tier 1 (General)

This form of residence permit (now a biometric residence permit (BRP)) enabled applicants to sponsor themselves by permitting them either to take up employment or to be self-employed in the UK. This category ceased to exist for new entrants on 6 April 2011 and those already in the UK under this category were permitted to continue living and working here. Those who became eligible were able to apply for settlement once they had lived in the UK in this category for a minimum of five years. They had to have done so by 6 April 2018, when the final indefinite-leave-to-remain (i.e., permanent residence (ILR)) applications were accepted by UKVI. Therefore, to all intents and purposes, the Tier 1 (General) category has now ceased to exist.

iv Employment categories
Tier 2

These applications are sponsored by employers who either wish to transfer their overseas employees to the UK or to hire a new recruit. This category is divided into two primary types: Tier 2 (General) for new hires and highly paid individuals and Tier 2 (ICT). These categories are themselves subdivided as follows:

Tier 2 (ICT)

The Tier 2 (ICT) category supports inward investment and trade by allowing multinational employers to transfer key company personnel from overseas to their UK branch. This subcategory is for those overseas employees who have worked for a parent or subsidiary company overseas for a minimum of 12 months before being transferred to the UK. It used to be further divided into ‘short-term staff’ and ‘long-term staff’, but, in April 2017, the government closed the short-term route to new entrants.

Within the Tier 2 (ICT) category, the role must be graduate level, which will normally require the overseas migrant to be educated at least to bachelor’s degree level. Any overseas migrant who is to earn less than £41,500 annually in the ICT category is not eligible for a certificate of sponsorship. If they are to return to the UK under Tier 2, such overseas migrants must return to their employer overseas for a further 12 months before re-qualifying for entry in this category. A Tier 2 (ICT) migrant earning between £41,500 and £119,999 per year is initially permitted to enter the UK for up to five years. Those earning £120,000 or more are permitted to stay for a maximum of nine years.

However, Tier 2 (ICT) migrants who entered the UK in this category under the Immigration Rules in force after 6 April 2010 are not permitted to obtain ILR, irrespective of their new salary levels. This requirement is intended to discourage overseas migrants coming here purportedly to fill temporary labour shortages but whose real intention is to settle permanently in the country.

This restriction was further tightened in April 2011 when rules were introduced that required Tier 2 (ICT) overseas migrants to leave the UK after they had lived and worked in this category for five years (or nine years for those earning in excess of £120,000 a year). The basic premise remains the same, however, as even these highly paid executives will be required to leave the UK at the end of this extended period, unless they switch to Tier 2 (General) status in the meantime.

Tier 2 (ICT) migrants are exempt from the requirement of having to establish their English language ability but are required to pay the Immigration Health Surcharge for themselves and their dependants. Their employers must pay the Immigration Skills Charge (introduced from April 2017) at £1,000 per year of visa validity (£364 for small company sponsors).

There is a requirement for Tier 2 (ICT) migrants for the individual to have been employed by an overseas entity for a minimum of 12 months. This requirement is waived where the individual earns in excess of £73,900 per annum; if the employee is being transferred as a graduate trainee, the requirement is a minimum of three months’ employment.

Tier 2 (Graduate Trainee)

This category is for graduate trainees within, usually, a multinational company, who have been employed abroad for at least three months and who are being transferred to the UK parent, branch or subsidiary of the same organisation as a part of a structured graduate training programme. The programme must define the progression towards a managerial or specialist role and will require the UK employer to provide a detailed training programme that meets the requirements of this subcategory.

The role must also be graduate level, and the maximum period of stay is 12 months. Similarly to other subdivisions of the ICT category, the graduate trainee is not permitted to switch categories to another role within Tier 2.

Tier 2 (General)

Unrestricted certificates of sponsorship

This subcategory was introduced on 6 April 2011. No one who falls within this category is subject to the annual immigration cap of 20,700 certificates of sponsorship (also introduced on 6 April 2011), which otherwise applies to Tier 2 (General) migrants. Those who fall within the unrestricted category are:

  1.  an overseas migrant who is currently in the UK working with the benefit of a Tier 2 (General) certificate of sponsorship, where employers wish to extend the stay of that employee;
  2.  where the overseas migrant is currently employed in the UK under Tier 2 (General) and now wishes to change employer – subject to resident labour market testing;
  3.  where a certificate of sponsorship is required for a migrant who is in the UK in another immigration category and who wishes to switch in-country into Tier 2 (General) where this is permitted under the Immigration Rules, except dependants of Tier 4 migrants; or
  4.  where an overseas migrant (whether within the UK or abroad) intends to take up a UK role where the annual salary for the job amounts to £159,600 or more (such an individual is also exempt from the requirements of resident labour market testing).

Those who have recently graduated from a UK university can switch from Tier 4 into the Tier 2 (General) category of stay without the prospective employer having to conduct a labour market search. (This is in substitution for the now closed Tier 1 (Post Study Work) route, although, at the point of entry, the major distinction is that the graduate must be sponsored by a UK employer before being permitted to remain in the country).

Restricted certificates of sponsorship

This ‘restricted’ category applies to all migrants wishing to take up Tier 2 (General) employment in the UK who do not fall into the unrestricted category. Unlike every other certificate of sponsorship, the sponsoring employer is unable to assign a certificate of sponsorship to that individual without prior approval from the Home Office. The employer must make representations to a Home Office panel, which sits monthly, and that panel will decide whether or not to give approval to the assignment of a particular certificate of sponsorship. Upon the assumption that all other criteria are met, including minimum salary and skills levels for the job and the satisfactory outcome of a labour market search, it is inevitably salary levels that may finally determine whether a particular overseas migrant will be awarded a certificate of sponsorship.

As the annual limit of 20,700 is applied on a monthly basis, realistically it is only those with the highest salary level (or those in occupations where there is a skills shortage) whose applications will be approved. Accordingly, an inbuilt bias exists in favour of commercial sectors that traditionally pay high salaries, such as financial services, law and accountancy, and will be to the detriment of the manufacturing sector, or those regions with relatively high levels of unemployment and low prevailing salaries.

Applications for a restricted certificate of sponsorship are submitted by employers via the Home Office’s computer system and the outcome of each application will be notified within a matter of days of each monthly panel meeting.

The monthly cap was not reached until mid 2015, primarily because of the lengthy and complex process required before a sponsor is permitted to assign a certificate of sponsorship. The monthly cap was then reached again in December 2017 and in all subsequent months, with the effect that any roles with salaries below £50,000 per annum were rejected. The cap has not been reduced since its inception, and whether it will be reduced in the future will undoubtedly be subject to the headway being made by the government in reducing net migration figures.

There are certain common themes and requirements applicable to all Tier 2 migrants. In addition to securing sufficient points for salary levels and academic skills levels, with the exception of Tier 2 (ICT) every overseas migrant must establish English language proficiency. The salary to be paid to any Tier 2 migrant must also be no less than the prevailing salary applicable to that role, as specified within the Home Office’s Standard Occupation Classification (SOC) codes. These were revised and simplified in April 2014 and are likely to be reviewed annually.

The April 2014 revisions to the SOC codes were wide-ranging. The number of SOC codes was substantially reduced and for most (although not all) the prevailing salary rates were increased. They were further increased in 2017, which was confirmed in HC1078. The list of shortage occupations was reduced, primarily by removing a number of healthcare professionals from the previous list, with the exception of nurses, who were reinstated to the list in early 2016. All jobs must meet the academic qualification RQF6, which applies to graduate level roles.

Overseas migrants must satisfy the Home Office that, for a minimum period of three months prior to applying for their visas, they have access to minimum cash amounts (known as maintenance) held by them in a regulated banking institution. In the case of certificate of sponsorship holders, the minimum sum is £945, and for each dependant (i.e., spouse and any children under the age of 18) this figure increases by £630. In the case of A-rated sponsors (i.e., employers), the relevant maintenance levels for both the employee and dependants can be ‘guaranteed’ by that employer, the effect of which is that the overseas migrant does not personally have to provide evidence of minimum cash savings. B-rated sponsors, however, are not permitted to give such a guarantee, and any overseas migrant wishing to be employed by a B-rated sponsor must evidence the minimum cash savings amounts. Employers of Tier 2 migrants are no longer required to write a separate letter to confirm that they will guarantee maintenance for those dependants, in circumstances where the dependant is applying for his or her visa at the same time as the primary applicant.

Resident labour market test

The majority of overseas migrants seeking to enter the UK labour force as Tier 2 (General) migrants must satisfy the resident labour market test (RLMT). Essentially an employer will need to advertise the job being offered if it is not on the shortage occupation list. Employers are required to place two adverts each running for 28 days either continually or in two stages. If advertised in two stages, each advert still needs to run for a total of 28 days and neither stage can be less than seven days. The purpose of the RLMT is to ensure that there are no suitable workers already living permanently in the UK. In practice, the process of advertising has involved all such roles being advertised on both the Universal Job Match website and a second form of approved media outlet, typically Total Jobs or Indeed. HC1078 widened the websites that may be used for graduate recruitment from a specified list of four to any freely available, prominent graduate recruitment website.

The main exceptions to the RLMT are those who will earn £159,600 per year or more, recent graduates from UK universities or those whose occupation falls within the shortage occupation list. As of April 2012, those occupations that carry a salary in excess of £72,500 per year (increased to £73,900 from 8 April 2017 onwards), as well as those in designated PhD-level occupations, are also exempt from having their jobs advertised on Universal Job Match. However, such jobs must still be advertised on two appropriate advertising media acceptable to the Home Office.

There will be a waiver of the RLMT and an exemption from the Tier 2 (General) limit for posts that support the relocation of a high-value business to the UK or a significant inward investment project. The qualifying criteria for this is the sponsor must have registered with Companies House no more than three years ago and have its headquarters and principal place of business outside the UK. The project will require inward investment of new capital expenditure of £27 million or the creation of at least 21 new UK jobs.

To qualify for a Tier 2 certificate of sponsorship (whether ICT, unrestricted or general), an overseas migrant must secure 50 points under the attributes provisions (i.e., the basis on which the certificate of sponsorship is assigned, salary levels), in addition to 10 points for English language proficiency (not applicable to ICTs) and 10 points for meeting the maintenance requirements. Points are no longer awarded for academic qualifications, because of the revision of the SOC codes, which only permit certificates of sponsorship to be assigned for graduate-level roles that meet the RQF6 standard. The jobs that meet this requirement are all set out within the SOC codes set out in Appendix J of the Immigration Rules.

Set out below is the current points table applicable to overseas migrants hoping to qualify for a Tier 2 job. This table is likely to be revised annually, primarily in relation to prevailing or minimum salary levels. In this regard, it should be noted that the only salary levels permitted to be taken into account are those that are guaranteed to be paid, and not those that vary, such as discretionary or performance-based bonuses.

Tier 2 (General) and Tier 2 (ICT): revised points

Sponsorship

Points

Job offer in a shortage occupation

30

Transitional arrangements (in-country only)

50

Job offer that passes a resident labour market test

30

Switching from a Tier 4 study category (in-country)

30

ICT

30

Extension in the same job at the same (or higher) salary (resident labour market test not required) (in-country)

50

Annual salary of £159,600 or more

30

Prospective earnings

Points

£30,000 and above (Tier 2 (General)) from autumn 2017

20

£20,800 and above (Tier 2 (General) new entrants only, or medical radiographers; nurses; secondary education teaching professionals of maths, physics, chemistry, computer science and mandarin; paramedics)

20

£41,500 and above (ICT)

20

£23,000 and above (Tier 2 (ICT – Graduate Trainee))

20

English language

Points

Migrants must be able to prove their English language ability (Tier 2 (General))

10

Maintenance

Points

Migrants must show evidence of having held at least £945 in a bank account for three months leading up to the date of application, or that their A-rated sponsor has confirmed that they will maintain and accommodate the migrant for the first month of employment in the UK (more is required if migrants have dependants)

10

Unlike Tier 2 (ICT), overseas migrants employed in the UK with the benefit of a Tier 2 (General) certificate of sponsorship (whether ‘restricted’ or ‘unrestricted’) are permitted to apply for ILR once they have lived in the UK and worked in a Tier 2 category for five years. They will, however, be required to establish at that time that they still meet all the criteria applicable for continuing approval of their Tier 2 employment, including confirmation from their employer that they are still required for the job. This requirement was introduced on 6 April 2011.

With effect from April 2016, the Immigration Health Surcharge has been extended to those persons who were previously exempt, namely Tier 2 (ICT) migrants as well as nationals of Australia and New Zealand, who were also previously exempt. Additionally, those prospective migrants who are coming from certain countries where TB continues to be a major health risk (such as China, Russia, Hong Kong, India, the Philippines and Sri Lanka) are required to obtain from an approved medical practitioner a certificate to confirm that they are not suffering from TB.

However, further restrictions have been imposed upon Tier 2 (General) migrants applying for ILR after 6 April 2012. In particular, from April 2016, all ILR applicants must meet a minimum pay threshold of either £35,000 per annum, or the prevailing wage for their particular jobs, whichever is higher. This figure increased to £35,500 per year for those applying for ILR on or after 6 April 2018 and will increase to £35,800 per year for those applying for ILR on or after 6 April 2019. From April 2020 this salary will increase to £36,200 per year. The only exception to the financial threshold will be for those overseas migrants doing a job on the shortage occupation list, those in specified PhD-level jobs and ministers of religion.

Additionally, although a Tier 2 (General) migrant is eligible to apply for ILR after five years in the country, the maximum permitted period of stay under this category is six years. From April 2014, Tier 2 (General) migrants can obtain a maximum initial period of entry of five years. The effect of this is that if Tier 2 (General) migrants have not applied for ILR during their six-year period of stay, they will have to leave the country and will not be permitted to return here to work until at least 12 months have elapsed following their departure (unless they are ‘high earners’, with an annual salary in excess of £159,000).

Broadly, Tier 2 (ICT) migrants or Tier 2 (General) migrants who leave the UK once their visa has expired, are subject to the 12-month ‘cooling-off’ period. The effect of this is that such individuals will not be able to apply to return to the UK in a Tier 2 category until after 12 months has elapsed either from the date of expiry of their visa or from the time they left the UK, if earlier. This situation may arise where a migrant’s employment has been terminated before visa expiry and the Home Office has then curtailed his or her leave to stay in view of the employment coming to an end.

However, there has been a recent relaxation in the cooling-off period in that any individual who has been working in the UK pursuant to a certificate of sponsorship assigned for three months or less, is no longer subject to the restriction of 12 months before being able to return here to work.

A final point on procedural matters is that if Tier 2 migrants are in the UK and fail to apply to renew their stay before visa expiry, there is a 14-day ‘grace period’ given to them so that there will be no adverse effect on their immigration history provided that they do apply to renew their status (in country) within that 14-day period, with persuasive reasons for the delay.

One welcome change, however, is the clarification of permitted absences from the UK by an overseas migrant when applying for ILR, introduced in December 2012. Essentially, a migrant is permitted to spend as many as 180 days in each year out of the UK during the prescribed five-year period without continuity of stay being broken. The effect of this is that, provided that the overseas migrant does not spend more than 900 days out of the UK during the five years leading to eligibility for ILR, and provided that these absences do not exceed 180 days in a year and are all work-related, approved annual leave or for compassionate purposes, ILR can still be approved. The reason for this change was to correct inconsistencies in approach by Home Office caseworkers when considering ILR applications and whether discretion on length of absences should be exercised or not. From January 2018, the 180-day absence limit is now within any 12-month period rather than a given year. The same also applies to PBS dependants if applying after January 2018. This was a previously unannounced change.

These changes are part of the government’s continuing wish to separate the historical link between temporary employment and permanent residence. Whether or not any additional changes in this regard will occur is subject to ongoing consultation.

From April 2017, the requirement to provide a criminal-record certificate was extended to include Tier 2 (General) entry clearance applicants coming to work in the education, health and social care sectors, partners of the main applicants as above and partners applying overseas to join an existing Tier 2 (General) migrant working in one of those sectors. Certificates must be provided for any country in which the applicant has resided for 12 months or more (whether continuous or in total) in the past 10 years prior to their application, while aged 18 or over. Certificates from the applicant’s most recent country of residence will normally only be considered valid if they have been issued no earlier than six months before the application date. Certificates from countries prior to the applicant’s most recent country of residence must normally cover the entire period of residency (up to 10 years prior the application date) but will otherwise be considered valid indefinitely.

Tier 5

This route has been subdivided into three primary categories and its purpose is to enable individuals to enter the UK for short periods to take up temporary work before returning to their home country. No immigration cap has been imposed upon the Tier 5 route; in most instances, it would be futile to do so, in view of the temporary nature of the roles that overseas migrants will fill. The three categories are as follows.

Youth mobility worker

This largely mirrors the (now defunct) working holidaymaker scheme, which permitted young Commonwealth citizens to enter the UK for up to two years for the purposes of temporary employment and taking an extended holiday. The requirements under the new scheme remain much the same, as it enables applicants under the age of 30 from certain countries to enter and work in the UK for two years. However, the requirement that such individuals also ‘take a holiday’ no longer applies. The countries that benefit from this scheme are currently limited to Australia, Canada, Japan, Monaco, New Zealand, South Korea and Taiwan.

Temporary worker

This category was created to enable overseas migrants to take up temporary employment, such as an internship or a graduate training programme. Applicants need to be issued with a certificate of sponsorship by an ‘overarching body’ that has previously been approved by the Home Office. There are currently approximately 50 registered overarching bodies permitted to assign certificates of sponsorship to suitably qualified applicants, all of which must be independent from the employers with whom the overseas migrants will work or undertake their internship programme.

Government authorised exchanges (GAEs) also fall into this broad category. However, the maximum period of stay permitted to applicants coming for a work experience programme under Tier 5 (GAE) is 12 months. Work experience programmes that fall within this category will be work experience and internships run by the Bar Council, BUNAC, the Commonwealth Exchange Programme, Fulbright UK/US Teacher Exchange Programme and Tier 5 intern schemes generally.

However, when applicants are seeking entry for GAE research and training programmes they will continue to be permitted to stay in the country for up to 24 months. Programmes that benefit from the longer period stay include Chatham House overseas visiting fellowships, Commonwealth scholarship and fellowship plans, sponsored researchers, UK–India education and research initiatives and the US–UK Education Commission (also known as the US–UK Fulbright Commission).

Creative and sporting individuals

This enables artists, entertainers or sportspeople to enter the UK to perform at a particular event, which may not necessarily be a ‘one-off’ situation, as it also includes actors taking part in theatrical productions that may last for a considerable period. In the case of sportspeople, they must be internationally established at the highest level and their presence in the UK must be regarded as making a significant contribution to a sports event or series of events. In each instance, the employer, or even a management company, agency or promoter, can assign the certificate of sponsorship. Where the artist or sportsperson intends to stay in the UK for less than three months, that individual is exempted from obtaining a visa or entry certificate before coming here, unless that individual is a visa national (i.e., the citizen of a country for which a visa must be secured before entry to the UK is permitted for any purpose).

v Sponsor obligations

Since the introduction of the Immigration, Asylum and Nationality Act 2006, employers have been subject to an increasing range of obligations, including the requirement to ensure that an overseas migrant has correct work authorisation (through the legal right to work checks), in addition to compliance with numerous sponsorship duties. Along with the 2006 Act, civil penalties were introduced for employers, with fines of up to £20,000 for each unlawfully employed worker, and unlimited fines and up to two years’ imprisonment for knowingly employing illegal workers.

Employers are required to check eligibility to work in the UK for each new overseas migrant before employment commences, and for those with limited entitlement to remain in this country (i.e., everyone except for UK citizens, EEA citizens and those who are settled here), annual checks were required on their continuing ability to work here. However, the right to work checks have been relaxed in that once the migrant has complied with the requirements to establish a right to work in the UK, there is no longer any requirement to check their immigration status annually and this can be deferred to either their visa expiry date or a date that their employment comes to an end if earlier. That will reduce the regulatory burden on employers, particularly large employers, who find it difficult to deal with annual checks for a substantial and mobile workforce.

Once a UK employer has been issued with a sponsor’s licence, the Home Office has the power to suspend, downgrade or even revoke the licence. This could have catastrophic consequences for any overseas migrant working in a Tier 2 capacity for that employer; for example, if the sponsor’s licence is revoked with immediate effect, that employer is unable to continue lawfully employing that individual. The employee will then have 60 days to seek alternative employment with a different sponsor, failing which he or she will be required to leave the country, together with any family members (and may be subject to the cooling-off period).

The Home Office has not identified all the circumstances in which it will suspend, withdraw or downgrade a sponsor’s licence, but when considering appropriate action, it will consider the seriousness of the sponsor’s failures; whether the sponsor’s acts or omissions are part of a consistent or sustained record of non-compliance; and whether the sponsor has taken any remedial action to minimise those failures. Suspension of a sponsor’s licence will prevent that employer from assigning any new certificates of sponsorship, and if the employer attempts to assign a new certificate of sponsorship, it is likely that its sponsor’s licence will be revoked.

The Home Office will revoke a sponsor’s licence for a variety of reasons, including where it stops trading for any reason (including insolvency); where it has been issued with a civil penalty for employing one or more illegal workers, and the fine imposed for at least one of those workers is the maximum amount; or where a civil penalty has been imposed and has not been paid within 28 days.

A sponsor’s licence will normally be revoked in circumstances where the employer is convicted for any offence introduced by a variety of immigration statutes, including the Immigration Act 1971, the Immigration Act 1988, the Nationality Immigration and Asylum Act 2002, and the Immigration, Asylum and Nationality Act 2006. Licences will also be revoked for any offence relating to trafficking for sexual exploitation or any other offence that shows that a sponsor poses a risk to immigration control.

vi Non-PBS employment categories

Very few of the previous employment-based immigration routes have survived the introduction of the PBS. However, the most important that have done so are as follows.

Personal domestic servants in private households

Although this route for entry to the UK has been in existence for many years, it was only in September 2002 that it formally became part of the UK’s Immigration Rules. Providing that the appropriate criteria are met, overseas domestic workers in a private household could accompany their employer to the UK for an initial period of one year, which would then be extended annually (if the criteria were still met), until they became eligible for ILR after five years’ continuous employment in this category. With effect from 6 April 2012, the maximum permitted stay for such an individual is six months for new applicants and only then in circumstances where the overseas employer is coming to the UK as a visitor. No extensions beyond six months are now permitted, and this route to settlement has been extinguished. Prior to April 2012, a domestic worker in a private household could bring his or her dependants to the UK, who themselves were permitted to take up employment. Under the new regime, domestic workers are no longer permitted to be joined by their dependants.

Commonwealth citizens with UK ancestry

This is the final remaining immigration benefit reserved only for Commonwealth citizens, and it remains in place because of much diplomatic lobbying by, primarily, the governments of Australia, Canada and New Zealand.

The requirements that the applicant must meet are that he or she is a Commonwealth citizen, has at least one UK-born grandparent and intends either to take employment or seek employment upon arrival in the UK.

This route is not available to those who have no wish to work but merely have a UK-born grandparent. The applicant must either have a job, or must intend to find one, before the entry certificate will be issued.

The application is submitted to a British consulate in the applicant’s home country or country of residence and, if approved, the visa will be valid for five years. Upon the expiry of that five-year period, the applicant and immediate family members (spouse and children under 18 years of age) are eligible for ILR.

Representatives of overseas businesses

The purpose of this category is to enable a senior executive of an overseas company or firm to come to the UK to establish a wholly owned subsidiary or register a UK branch for that overseas parent company. There must be no existing branch, subsidiary or other representative in the UK, although if the UK entity merely has a legal existence, but does not employ staff or transact any commercial activities, the sole representative route may still be available.

The prospective representative (not the company) must apply for entry clearance to the local British consulate in his or her country of normal residence, and supporting material will include:

  1.  a full description of the parent company’s activities;
  2.  a UK job description and proposed UK salary levels;
  3.  evidence that the sole representative will be an employee of the parent company in the UK with full authority to take operational decisions on its behalf; and
  4.  evidence that the sole representative is not a majority shareholder in the parent company.

If the visa is granted, it will be approved for two years initially, during which period the representative is expected to establish a UK commercial presence for the overseas company and to work full time in its interests. Providing these criteria are met, this status can be extended for three further years, following which the sole representative (and his or her immediate family) will be eligible to apply for ILR.

This route is also open to employees of an overseas newspaper, news agency or broadcasting organisation being posted on a long-term assignment as a representative of their overseas employer. Those qualifying under the subcategory for employees of overseas news or media organisations will also be granted two years’ leave, during which they may only work for the employer in question. There is also an English language requirement for media employees.

‘Permitted paid engagements’ visitor category

The UK’s Immigration Rules have only rarely permitted ‘short-term working’ activities, and never where the individual receives remuneration or a fee for their services.

However, with effect from April 2012, a new visitor category was established to deal with prearranged specific activities where the overseas visitor is permitted to enter the country as a visitor and to receive a fee. This route is restricted to those coming for one month or less and no formal sponsorship from any UK employer or institution is required. The permitted activities for a visitor in this category of stay are:

  1.  giving a lecture, examining students and participating in or chairing selection panels;
  2.  overseas designated air pilot examiners assessing UK pilots to ensure they meet national air regulatory requirements of those countries;
  3.  providing advocacy in a particular area of law (as a qualified lawyer) in a court or in a tribunal hearing, arbitration or other form of alternative dispute resolution in the UK;
  4.  professional artists, entertainers or sportspersons carrying out an activity relating to their main profession (e.g., artists exhibiting and selling their work);
  5.  authors engaged in book signings;
  6.  entertainers giving a one-off or short series of performances; and
  7.  sportspersons providing, for example, guest media commentaries in their chosen field.

A visa will be required for visa nationals, although not for any other individual who would not normally require a visa to secure entry to the UK. However, non-visa nationals must still be able to satisfy an immigration officer at a UK port of entry that their activities clearly fall within the parameters of the new visitor category.

Business visitors

There are currently 15 routes for visitors who wish to enter the United Kingdom. These can be confusing, particularly the frequently narrow distinction between ‘working’ and ‘entering for business purposes’. The former requires express permission to work in the UK whereas the latter does not. From late April 2015 permission to enter the UK as a visitor may be granted in the following reduced categories:

  1.  visitor (standard), which consolidates the existing visitor categories of general, business, child, sport, entertainer, visitors for private medical treatment, approved destination status visitors, prospective entrepreneur and visitors undertaking clinical attachments;
  2.  visitor for marriage and civil partnership;
  3.  visitor for permitted paid engagements; and
  4.  transit visitor.

Additionally, the student visitor route has changed to ‘a short-term study’ route and this applies in conjunction with a new category of child student visitor as well as a revised route for parents of children at school in the UK. Prior rules that permitted the parent to have permission to remain in the UK to look after a child or children under the age of 12 who are attending a private school have been substantially changed. This is now limited to the parents of Tier 4 (child) students, which will accordingly exclude those whose children are studying at an independent school but have permission to stay here other than pursuant to Tier 4. The parent to whom this applies must be the sole carer in the UK.

NHS surcharge

A major increase in the cost of recruiting non-EEA labour was introduced in April 2015. The NHS surcharge (as it has become known) is set at £200 a year for temporary migrants (with a primary applicant or their dependents or both) and £150 a year for students. Dependants will be charged the same amount as a primary applicant and it must be paid for the entire period of leave being requested at the time that these applications are being applied for. It was announced in February 2018 that these fees will be doubled but, at the time of writing, no implementation date had been confirmed.

The NHS surcharge was implemented for ICT migrants from 6 April 2017. In simple terms, a single applicant who applies for a visa to work in Tier 2 status for five years has to pay an additional £1,000 at the point of visa application.

The NHS surcharge is paid by all non-EEA nationals who apply to come to the UK either to work, study or join family for a limited period of more than six months and will also be paid by the same individuals who are already in the UK and apply to extend their stay, to include Australians and New Zealanders who were previously exempt.

The exemptions to the requirement to pay the surcharge are:

  1.  tourists who enter the UK on a tourist visa will not pay the surcharge although they will remain directly chargeable for hospital treatment should they need to utilise the services of the NHS while in the UK. However, the NHS will charge each such individual 150 per cent of the cost of the treatment and therefore private travel and health insurance should be taken out;
  2.  asylum applicants;
  3.  victims of human trafficking;
  4.  dependants of a member of the armed forces;
  5.  those applying for permission to enter the UK in connection with an EU obligation, such as an association agreement;
  6.  those applying for ILR; and
  7.  those applying for a visa to the Isle of Man or Channel Islands.

Although there is certain logic to imposing this surcharge, it is an additional burden imposed on large employers (in particular) who operate in the global marketplace and who recruit hundreds, if not thousands of non-EEA migrants.

Additionally, applicants for visas who will stay in the UK for more than six months must secure TB certificates if applying from certain countries where TB is an ongoing health risk.

Immigration skills charge

An additional charge is now payable by employers who employ migrant workers in skilled roles under the Tier 2 sponsorship scheme on or after April 2017. The skills charge is set at £1,000 per employee per year, and at a reduced rate of £364 for small or charitable organisations.

Companies that have less than 50 employees, or turnover of less than £6.5 million and where their balance sheet is no more than £3.26 million or they are charitable organisations will pay a lower skills charge of £364.

The skills charge was announced alongside a number of changes to the Immigration Rules following the MAC’s report of January 2016 advising the government on how to ‘significantly reduce the level of economic migration from outside the EU’. In addition, it is anticipated that the skills charge will affect ICT applications in April 2017.

The skills charge will not apply to a sponsor of a non-EEA national who was sponsored in Tier 2 before April 2016. Furthermore, it will only be imposed on main applicants so it will not affect dependant family members. In practice, the skills charge increases the cost of a five-year Tier 2 sponsorship by £5,000. Essentially it is designed to reduce demand on the scheme and result in additional opportunities for resident workers.

Right to rent

With effect from February 2016, private landlords are required, pursuant to the Immigration Act 2014, to conduct immigration status checks on their tenants. Financial penalties of up to £3,000 can be imposed on landlords who fail to undertake the immigration checks or who rent property to a person whose immigration status (or lack of one) means that they do not have a ‘right to rent’. In the first six months of operation, the Home Office Landlords Checking Service right to rent aid was used over 11,000 times and the helpline took over 800 calls to support landlords, agents and tenants in implementing the scheme. A similar checking system for employers has been in force since 2008 and these immigration status checks must be conducted before entering into a residential tenancy agreement with any adult who is to occupy the premises as their main or only home. However, these existing right-to-rent provisions were strengthened under the Immigration Act 2016 to enable landlords to evict illegal migrant tenants more easily, and in some circumstances without a court order. In practice, landlords will obtain a notice issued by the Home Office that confirms the tenant is disqualified from renting in the UK as a result of their immigration status. On receipt of this, the landlord will be expected to take action to ensure that the illegal migrant leaves the property.

Wider enforcement measures with respect to banks and building societies have made it even more difficult for illegal migrants to live and work in the UK. Measures in the 2016 Act provided the Home Office with an escalating range of options, including where a current account holder is confirmed to be unlawfully present in the UK. This provision was implemented in January 2018, requiring banks and building societies to check the immigration status of personal bank account holders in the UK and inform the Home Office where legal right of residence is not found. The Home Office will then conduct its own checks and may apply to the courts for an order instructing the bank or building society to freeze the individual’s accounts. This further enables the Home Office to prosecute individuals for the criminal offence of working illegally and recovering wages as proceeds of crime. While the Home Office states that (at this stage) only details of illegal migrants who are liable for removal or deportation from the UK or who have absconded from immigration control will be checked (against a list provided by anti-fraud organisation Cifas), the reality is that this system has not been adequately checked before being implemented and concerns of potential errors causing immense difficulties for, in fact, legal migrants, have not been addressed.

The purpose of this new provision is to prevent those who do not have permission to be in the UK from renting accommodation, and to further integrate immigration control within key areas of society by transferring the burden of immigration checks onto landlords and banks.

Citizens of EEA countries

Following the substantial expansion of the EU in 2004, citizens of these accession countries were permitted to work in the UK but subject to quite tight restrictions. These were further tightened following the accession of Bulgaria and Romania to the EU in 2009. However, since January 2014, there have been no restrictions imposed upon any citizens of EU or EEA Member States, with the exception of Croatia.

iV INVESTORS, SKILLED MIGRANTS AND ENTREPRENEURS

Immigration routes for those who fall into this category are now exclusively governed by Tier 1 (PBS) and, since 6 April 2011, are now more strictly prescribed.

Between 2008 and 6 April 2011, the Tier 1 (General) route was available to highly skilled individuals seeking to enter the UK on an employed or self-employed basis. Points were attributed on the basis of historical earnings and academic qualifications. This was a highly popular category, as it covered a wide range of skilled and high-earning individuals, including self-employed partners in law firms, accountancy practices, financial services sector limited liability partnerships (LLPs) and numerous other professional firms. However, following a controversial government study undertaken in June 2010 (which apparently found that 29 per cent of Tier 1 (General) migrants were performing unskilled work, and 46 per cent were in employment that could not be classified as either skilled or unskilled), this route was initially subject to an arbitrary interim cap, and then closed entirely.

In the absence of the Tier 1 (General) category, it is impossible for self-employed professionals who would not ordinarily be investing substantial sums into a UK business to secure any form of approval to work in the UK. Tier 2 is not normally available to the self-employed; it is intended for employees only. However, there is an exception for members of an LLP in circumstances where, although they may be regarded as ‘self-employed’ for tax purposes, their status is more akin to employees. In these circumstances, such individuals can be assigned a Tier 2 certificate of sponsorship that relieves some of the pressure on many professions that favour an LLP as a corporate vehicle, such as law firms, accountants, architects and numerous entities within the financial services sector.

The four available routes to the self-employed are now limited to persons in the categories of ‘investors’, ‘entrepreneurs’, ‘persons of exceptional talent’ and ‘graduate entrepreneurs’, as set out below.

i Tier 1 (Investors)

The UK government is currently making a concerted effort to attract more high-net-worth individuals to invest in the UK. Under provisions introduced on 6 April 2011, the route has been made more attractive by enabling investors to achieve ILR more quickly (subject to their investment levels) and to spend longer periods outside the UK than was previously permitted, without losing eligibility to apply for ILR.

The financial entry threshold is the investment of £2 million into the UK economy. This must be invested into UK government bonds, or the shares or loan capital of actively trading UK companies. (Note that property companies and property investment companies are not permitted investment vehicles.)

In December 2012, new Immigration Rules were introduced that permit the Home Office to curtail the leave of a Tier 1 (Investor) migrant to remain in the UK if the required investment level has not been maintained. However, with effect from April 2015, the requirement to ‘top up’ the investment to ensure that it maintains its initial value is no longer required provided that the same investment remains in place. If a Tier 1 (Investor), for example sells stocks that are reducing in value, and buys new and more profitable investments, the ‘topping-up’ requirement still applies. Furthermore, loans or investments by applicants that are held in offshore custody are explicitly forbidden, as the purpose of this immigration category is that all investments must remain under an applicant’s control and must genuinely benefit the UK.

The applicant applies for entry clearance from a British consulate in his or her country of usual residence and, unlike any other PBS applicant, the English language or maintenance requirements do not need to be met.

Investors may spend up to 180 days a year outside the UK during the five-year period leading to eligibility for settlement, in substitution of the previous annual limit of 90 days (and subject to the new 180-day absence limit within any 12-month period).

To qualify for ILR, the total sum of £2 million must remain invested by the applicant for the full five-year period before becoming eligible for settlement. This period reduces exponentially, depending upon the total value of the investment made. In particular, those investing £5 million or more into the UK may apply for ILR after three years and those who invest £10 million or more are eligible after two years.

Applicants for a Tier 1 (Investor) visa (in addition to applicants in the Tier 1 (Entrepreneur) category) will be required to submit a police clearance certificate with their application from any country where they have lived for 12 months or more in the previous 10 years. This also applies to any dependants aged 18 or over. This requirement does not apply to those who are switching into or extending in the Tier 1 (Investor) or Tier 1 (Entrepreneur) categories from within the UK.

Processing times for obtaining a certificate vary significantly from country to country and will be greater if the individual applicant is no longer resident in that country. For example, there is an overseas turnaround in the United States of up to 12 weeks, whereas in Hong Kong it can normally be secured within a week. There is, however, a concession for applicants where it is not reasonably practicable to obtain a certificate from a particular country – although evidence of this would need to be provided with the visa application.

However, the UK is in a highly competitive market as many other European Union countries have introduced their own investor schemes that promise both permanent residence and citizenship to those who invest significantly less than the sums required by the UK.

A number of countries within the European Union, including Austria, Hungary, Portugal, Spain, Cyprus and most notably Malta, have all introduced schemes to encourage high-net-worth individuals to invest sums into those respective countries, which would then lead either to permanent residency or (in Malta’s case) immediate citizenship. As these figures have been set relatively low (€650,000 in Malta’s case) this is likely to have a significant effect on ‘higher-value’ countries, such as the UK, who wish to keep investment levels at a higher figure. However, if it is possible for a non-EU citizen to invest sums of considerably less in, for example, Malta, than the UK is currently demanding, it would make little sense for such an individual to invest a substantially higher amount in the UK and then have to wait for five or six years before being able to secure British citizenship. In Malta, he or she would acquire Maltese citizenship immediately and that would confer full EU rights on that individual. This is also a relevant consideration with the UK’s impending departure from the EU.

ii Tier 1 (Entrepreneur)

Major changes have also been introduced to this category, which, even outside the PBS, has been part of the immigration landscape for nearly 20 years. The primary purpose of the Tier 1 (Entrepreneur) route is to enable an applicant to set up a new business, join an existing business, or become a director in either a new or existing business in the UK. The minimum requirement to be granted entry clearance as a Tier 1 (Entrepreneur) is that the applicant has a sum of £200,000 held in a regulated financial institution that is freely disposable in the UK. In early 2017, a change was introduced to require the prospective entrepreneur to have held £200,000 in his or her name for a three-month period prior to the application. The maintenance and English language requirements must be met, the NHS surcharge paid and a police clearance certificate obtained.

Applications are submitted to the appropriate British consulate. As far as maintenance is concerned, the applicant must have held a minimum of £3,100 in a bank account for a minimum of three months prior to the entry clearance application being submitted (over and above the threshold sum of £200,000), and this figure increases by £1,800 for each dependant.

However, it was considered by the Home Office that merely requiring financial criteria to be met left this route open to abuse. Accordingly, with effect from 31 January 2013, Immigration Rules were introduced that included a ‘genuine entrepreneur’ test (as a form of assessment of an applicant’s credibility), the option to interview an applicant should there be concern about his or her credibility, and a requirement that the investment of funds must be available on an ongoing basis rather than solely at the time of application. A new power has also been implemented that will enable a Tier 1 entrepreneur’s visa (or leave to remain in the UK) to be curtailed if, at any time during his or her initial period of stay (normally three years), non-compliance is established. The effect of these changes is that many more supporting documents will be required at the time a Tier 1 (Entrepreneur) application is submitted. Applicants are now required to produce not only a business plan but any other material (such as prior financial statements of an existing business, letters from accountants and evidence of an applicant’s business track record) to enable UK entry clearance officers to assess the genuine nature of the application and the likelihood of the business succeeding in the UK.

Within six months of entering the UK, the entrepreneur must become a director of the UK enterprise into which the £200,000 sum is being invested, or must register as self-employed with Her Majesty’s Revenue & Customs. If the registration does not take place within the relevant six months, the Home Office can curtail the leave of a Tier 1 (Entrepreneur) to remain in the UK. The visa is issued for an initial period of three years, which can then be extended for a further two years, before the entrepreneur and family become eligible for ILR.

The initial financial threshold has also been made more flexible. As an alternative to investing £200,000, an applicant in this category can have access to £50,000 held in a regulated financial institution that has been funded by a Financial Services Authority-registered venture capital firm, a UK government department or an entrepreneurial seeding competition recognised by UK Trade and Investment.

Entrepreneurs are also permitted to be absent from the UK for up to 180 days in any 12-month period.

As a further incentive to prospective entrepreneurs, they may apply for accelerated settlement after three years if their investment has either created 10 full time or equivalent jobs for resident workers for at least 12 months; or the company or firm into which the investment has been made has generated a total turnover of at least £5 million over a three-year period.

A new ‘prospective entrepreneur’ visit visa has been introduced outside the PBS to enable business entrepreneurs to enter the UK for the purposes of securing financial backing, the intention being that any such individual will be permitted to switch in-country to long-term residence in the UK as a Tier 1 (Entrepreneur) without having to file the entry clearance application abroad.

Minor changes were introduced in HC1078 to the Tier 1 (Entrepreneur) category to clarify evidential requirements and to correct minor drafting errors in the Immigration Rules. There has been an amendment to provide a clearer definition of invested funds, a removal of references to HMRC documentation, which has been discontinued in light of self-assessment of self-employed earnings and clarification to the evidential requirements for applicants who have invested in a Limited Liability Partnership. Further, the specified evidence required to demonstrate that an entrepreneur’s employee has settled status in the UK has been revised to satisfy the requirement for the applicant to create jobs for settled workers.

iii Tier 1 (Exceptional Talent)

On 6 April 2011, the government introduced a new route for ‘exceptionally talented migrants in the fields of science, arts and humanities’ who wish to both work and eventually reside permanently in the UK. This was subject to an annual cap of 1,000 in its first year of operation, to be reviewed after 12 months (it has never been changed).

The exceptional-talent route is open to those who are internationally recognised as world leaders in their field and to those migrants who show ‘exceptional promise’ and who are likely to become internationally recognised.

Migrants under the Tier 1 (Exceptional Talent) category will not need sponsorship from a UK employer or organisation, but will require endorsement by a designated ‘competent body’ that is acknowledged to be expert within its own particular field.

This category has been broadened in an effort to further develop the digital industry in the UK. There are two stages to obtaining entry clearance under this subcategory, the first step being to apply to Tech City for an endorsement and the second is to use that endorsement to support a visa application for entry clearance. Companies that wish to employ an individual holding a visa under this category will not need a sponsorship licence and nor will they need to sponsor the individual. The application may be made by any individual keen to develop their work from inside the UK.

Before Tech City issues an endorsement, it will review the credentials of the candidate against its own set criteria. Candidates must either have a proven track record of advancement in the digital technology sector or have contributed to the development of the sector from additional work undertaken outside their primary role.

There is no single definition of ‘exceptional talent’ and the role of the competent body will be to set the criteria that will apply to those who may qualify for endorsement. A list of competent bodies is available on the Home Office website.

For its initial year of operation, this immigration route was only available to those applying from outside the UK and, to qualify for ILR, exceptionally talented migrants must reside in the UK for a five-year period and be economically active in their field of expertise.

It is highly likely that this route will meet the same fate as that which befell the largely defunct ‘innovator’ category, which was first introduced to benefit similar types of individuals in 2000. Over the past decade, only a handful of innovator applications have been submitted and it is unlikely that the exceptional-talent route will be considered more attractive.

iv Tier 1 (Graduate Entrepreneur)

This is an entirely new category, introduced in April 2012, for graduates from a UK university or higher education institution who either have or want to develop an existing viable business proposition. The individuals must have been identified by their college as having entrepreneurial skills, although its effect has been muted because time spent in this category will not lead to settlement in the UK and the total period of leave granted cannot be more than 24 months.

There is now a limit of 2,000 visas available in this category per year, which are split as follows: 1,000 MBA graduates, 100 elite global graduate entrepreneurs and 900 in any category from UK institutions of higher education. These limits will continue until changed, rather than requiring to be renewed each year. The 100 visas available to ‘elite global graduate entrepreneurs’ do not require graduation from a UK university. Provided that suitable applicants have been identified by UK Trade and Investment, they can have graduated from anywhere in the world. Previously, this immigration route prevented the successful applicant from working more than 20 hours each week, although this restriction has now been removed.

The initial period of stay is 12 months, which can then be extended for an additional year. However, such extension will not be possible if the relevant UK educational institute loses its status as an endorsing institution or its highly trusted status under Tier 4 (PBS), ceases to be an A-rated sponsor under Tiers 2 or 5, or withdraws its endorsement.

V OUTLOOK AND CONCLUSIONS

i Overview of UK domestic immigration routes

Following the sea change in the UK’s immigration process introduced by the PBS in 2008, it was hoped that subsequent changes would be introduced over time, primarily to help improve the operation of the new system and to enable it to function more smoothly. Unfortunately, this has not proved to be the case and during the past 10 years the UK’s immigration process has been rather uneven.

The changes of government in May 2010 and 2016, bringing with them a raft of new policy initiatives, have made matters substantially more challenging for the business community.

A major policy of the current government and its predecessors has been to substantially reduce net migration numbers to the UK. The routes that have borne the brunt of this policy have been the economic immigration routes, primarily those that apply to employees or the self-employed and to students.

According to figures published by the government, the number of people from outside the EEA and Switzerland given entry to the UK as students and family members increased by nearly 80 per cent from 272,000 in 1999 to 489,000 in 2009. It appears that in 2009, the student route (including dependants) accounted for approximately 76 per cent of the total net migration into the UK. However, the number of student and non-EEA family visas issued has substantially decreased to less than 250,000 in the year to March 2017.

In the course of the past few years, the student route has been tightened dramatically and the effect these proposals will have on the many UK educational institutions that rely on international student candidates is a matter of considerable debate. Historically, the UK has been the global destination of choice for many thousands of higher education students (second only to the United States). Whether a serious reduction in the numbers of students coming to this country will adversely affect the estimated £5 billion annual contribution that students make to the UK economy remains to be seen.

Faith in the UK as a country that welcomes overseas students was severely shaken during 2012 when London Metropolitan University had its Tier 4 sponsorship revoked. The effect of this was to require over 1,000 foreign students who had been studying here in Tier 4 visa status to find alternative courses at other UK universities within a matter of months, or to leave the UK. It appears that most of those students did manage to find other educational establishments to accommodate them, but the message that such draconian action sent worldwide (irrespective of whether the action was objectively justified or not) is that the UK does not provide a safe harbour for overseas students who would like to graduate from a UK university. Although a new sponsor licence was granted to London Metropolitan University for a probationary period with effect from 9 April 2013, minimal publicity was given to this announcement by the Home Office, in contrast to the scale of both the publicity and protest accorded to the revocation of the sponsor licence in August 2012. This suggests that the damage has already been done.

It appears that there have been some adverse financial consequences of the restrictions imposed upon overseas students coming to the UK. Since 2010, there has been a steady decline in the number of non-EEA students applying to universities in the UK, which will undoubtedly cost the country significant sums over the coming years. It appears that Australia, the United States and Canada are having substantially increased applications from overseas students, whereas applications to the UK are in decline. While high tuition fees may be one of the reasons for this, inevitably immigration restrictions have been primarily responsible and, more recently, the UK’s impending departure from the EU will also have had an effect.

The changes made to the employment-based immigration routes have been equally dramatic. Tier 1 (General) – which provided a major route for the self-employed – has been closed since April 2011. The effect of this is to bar many high-earning partners in law firms, accountancy firms, investment and asset management firms, etc. from having an immigration route to this country.

The Tier 2 category for employees has similarly been restricted to a major extent and in certain instances has been made much less attractive. An annual immigration cap is in place for new recruits from overseas, irrespective of the outcome of any labour market search for the roles to be filled. This ignores the accepted fact that the UK has not been producing a sufficient number of qualified persons, particularly in the areas of science, mathematics and engineering, to meet the increasing needs of UK industry.

The introduction of the NHS surcharge increased the cost of recruiting labour from outside the EEA and the Immigration Skills Charge (introduced in April 2017) further increased the costs burden on employers. At £1,000 per year for large sponsors, this can increase the cost by £5,000 for a five-year visa. These additional costs are intended to deter employers from sponsoring overseas nationals unnecessarily, in an attempt to encourage more recruitment from the resident labour force. However, there are few businesses that would seek to incur the high costs of overseas recruitment, government fees and relocation costs if such labour is readily available from within the UK. A family of four coming to the UK in the Tier 2 categories for a five-year period can add £10,000 to the cost of most overseas hires. If a business cannot afford these costs, but cannot find the skills it needs from within the UK, this undoubtedly causes difficulties for the growth of the business.

While the Tier 2 (ICT) route has been exempted from the immigration cap, this option has also become much less attractive. Applicants must earn a minimum of £41,500 and are permitted to remain here for a maximum of five years if they earn under £120,000, following which they must then return overseas and cannot return for 12 months. No Tier 2 (ICT) migrant will be permitted to apply for ILR at any time, which inevitably makes it more difficult for UK employers to attract suitably qualified overseas staff to come to the UK on assignment.

Further restrictions have been imposed upon migrants’ ability to apply for ILR; most Tier 2 (General) migrants are required to earn a minimum of £35,500 (with effect from April 2018) and to apply for ILR within six years to avoid being required to leave the UK. This is part of the UK government’s wish to clearly separate temporary working categories from the ability of overseas migrants to reside permanently in this country. Further consultation is to take place to enable additional requirements to be introduced to separate more distinctly the ‘temporary’ and ‘permanent’ categories.

English language competency has been introduced in most immigration categories and now even includes spouses of British citizens who seek entry to the UK. This can be particularly problematic for many nationalities who are unable to find acceptable English language test centres within a reasonable radius of where they live. In many countries, there is a substantial waiting list (this is a particular problem in Latin America).

A criminality test has been introduced for all overseas migrants, who will have to prove that they are free of unspent convictions (under the Rehabilitation of Offenders Act 1974) when applying for ILR. Those who cannot establish this will have to leave the UK if they have no other legitimate basis to stay here. As an example, any person convicted of an offence, no matter how minor, who receives a non-custodial sentence will have to wait for a minimum of 12 months after the conviction before being eligible to apply for ILR. For more serious offences this increases in tranches up to a bar of 15 years for those who have been sentenced to a term of imprisonment of four years or more.

ii Brexit
The relationship between the UK and the EU

The future of the UK’s relationship with the rest of the EU has been a topic of much discussion. Fundamentally, the relationship between the UK and the EU has changed as a result of the Prime Minister’s withdrawal notice of March 2017 and the ongoing negotiations with Brussels on the precise terms of withdrawal from the EU will inevitably result in further change.

EU citizens have been able to live and work legally in the UK without having to meet any of the criteria detailed above that non-EU nationals currently have to comply with, such as having a skilled job or qualifying family relationships. Examples of other benefits EU citizens have gained include visa-free travel to the UK and cooperation on asylum. The levels of EU migrant integration have come so far that the UK’s departure will have profound legal, economic, social and political implications irrespective of what type of agreement is eventually reached after Article 50 TEU was activated. The UK and the EU have two years to agree a divorce deal, following which an agreed transition period will allow implementation of a new legal framework in the UK and (hopefully) a new trading relationship between the two parties. At the time of writing, this is expected to be the case until December 2020 and the bloc’s treaties will apply in full until then.

While the future of the UK’s immigration policy remains uncertain beyond December 2020, with little indication of what it may look like, phase one of the negotiations agreed protections for EU citizens living in the UK (and UK citizens living in other EU Member States) until the end of the transition period. However, as stated repeatedly in joint reports from the UK and EU, ‘nothing is agreed until everything is agreed’. Therefore, until the negotiations are concluded, there is still much speculation as to how the future will look.

Four freedoms

It appears that the government will not seek to retain membership of the single market and will not continue to accept the ‘four freedoms’ of goods, capital, services and people.

An Association Agreement with the EU has effectively been ruled out. This type of arrangement would have allowed the UK to retain full access to the single market, similar to that of Iceland, Liechtenstein or Norway. These non-EU countries as a consequence of membership of the European Free Trade Association, have implemented free movement provisions with the EU. It requires work and residence rights for EU citizens to remain in place in the UK, something that the government has repeatedly stated it cannot allow.

It looks increasingly likely that the agreement reached between the EU and the UK will not involve the free movement of people between the EU and the UK. Therefore, the UK will become free to impose selection criteria on EU citizens. This is not welcome news for the business community, as many employers would undoubtedly face difficulty with retaining their workforce. In such a scenario, the selection criteria are likely to be the same as the current points-based system for non-EU citizens, discussed in much detail in the proceeding sections of this chapter. This may require migrants to demonstrate that they have a skilled job, a spouse or partner in the UK or a place to study with a registered university or college.

The UK should expect reciprocal treatment if selection criteria are imposed. Member States may change their policies towards British citizens residing abroad, who would be affected by an end to free movement in the absence of EU-wide agreements. If British citizens had to meet EU countries’ default immigration criteria, the rules and policies would inevitably vary from country to country. Bilateral immigration agreements with specific EU countries might be possible but these would take many years to be negotiated and finalised.

Residence rights for EEA nationals

There has been an increase in EU nationals who have exercised treaty rights by working, studying or being self-sufficient in the UK for at least five years applying for permanent residence in the UK, with more than 90,000 applications received in 2016 alone. Despite Home Office attempts to curb the number of applicants, EU nationals continue to apply for and be granted permanent residence, particularly those who are also eligible for British citizenship. The individual desire for certainty is powerful.

For those EU nationals (and their family members) who do not yet qualify for permanent residence, having not lived in the UK for five years, the outcome of the phase one negotiations may provide some relief from the anxiety they are experiencing. What has been agreed between the UK and the EU, according to the joint report published on 8 December 2017, is that those individuals currently residing in the UK prior to the UK’s departure from the EU (29 March 2019) will continue to have the right to reside here. They will be required to register for a new residence permit, effectively bringing EU nationals under domestic UK immigration laws. When they have completed five years’ residence in the UK, they will qualify for a new ‘settled’ status, which will mirror the 2004/38 Directive rights.

Those EU nationals arriving after 29 March 2019 will have the right to reside in the UK under the Directive rights but will also need to apply for a registration card within three months of arrival. This right will continue until the end of the transition period, following which they will need to satisfy UK immigration laws. For those EU nationals who already hold permanent residence, they will be required to apply for the new settled status as soon as the application system is open – expected to be in September 2018 or thereabouts.

Of course, this may all change as the negotiations continue as ‘nothing is agreed until everything is agreed’ and the process for these new applications has not yet been published.

Despite the negative sentiments directed towards the UK as a result of the historic decision to leave the EU, the government remains hopeful that the country will continue to attract the brightest and the best to work or study in Britain. Whether this will be the case in practice remains to be seen.

Although the UK’s economic outlook has improved from a year ago, the downward pressure on immigration continues. This is likely to continue following the UK’s withdrawal from the EU. As it is uncertain what immigration policy will be after Brexit, its effects on the economy cannot be predicted with any degree of certainty. The less attractive the UK becomes as a place to conduct international business, the greater will be the adverse effect upon the UK economy. While the effect of this may not become apparent in the short term, many academic and economic commentators continue to express concerns about the UK economy in the foreseeable future, whose downward trend is only likely to be accelerated once the UK formally withdraws from the EU.

1 Chris Magrath and Ben Sheldrick are partners at Magrath Sheldrick LLP.

2 R (on the application of Alvi) v. Secretary of State for the Home Department [2012] UKSC 33.