UK: Highly Skilled Migrants Under The Points Based System - Statement Of Intent

Last Updated: 10 December 2007
Article by Caron Pope, Sarah Keeley and Emily Pope

Major changes are on their way with what is heralded by the Government as " the biggest shake-up of the system in its history". The Statement provides a good body of information on the requirements for each of the Tier 1 categories, together with clarification as to how the points will be allocated in each category and when switching between sub-categories and various Tiers will be permitted.

However, there are inevitably some anomalies and unanswered questions that will need to be addressed, for example:

  • UK Students will only be able to switch into Tier 1 and will no longer have the option of switching in country into work permit employment.

    • Are employers who recruit at graduate entry level happy to have their new recruits issued with a blanket permission to work in the UK under Tier 1, rather than being tied to them under a work permit?
    • The Tier 1 sub-category of Post Study Work will enable UK students to work for up to 2 years in the UK following completion of their study, but will not count towards the qualifying period for settlement. Will this really be such an attractive option for migrants looking to base themselves here?

  • The maintenance test imposed for Tier 1 migrants (apart from investors) applying from overseas would require a migrant with a spouse and 3 dependent children to show funds of at least £6,800, irrespective of where in the world they currently live. We assume that funds provided by way of an advance from the employer will be accepted, but will bank loans also be acceptable? And are employers happy to have to take on this additional financial burden?

Citizens of 17 countries will be exempted from the English language requirement, as English is deemed to be the majority language in these countries. It is interesting to note that South Africa is not included whereas Belize is (where according to one source only 3.9 % of the population speak English as a first language).

Comprehensive guidance will be available before each Tier is rolled out, so there is hope that these concerns will be fully addressed.

The new UK system is based on the Australian points based system. It is interesting to note that feedback from our contacts there is that the system has become increasingly complicated, and that decision-making in some areas has been taken away from the Embassies overseas and returned to Government offices in Australia - the opposite direction to that being taken by our Government.

Exciting and challenging times are ahead as we all come to grips with the new system. We look forward to working with our clients on all phases of the roll out of the PBS to make it as painless as possible.

A detailed summary and further analysis prepared by CMS Cameron McKenna's Immigration Team, together with the full text of the Statement can be found below.

To view the article in full, please see below:


Full Article

Major changes are on their way with what is heralded by the Government as " the biggest shake-up of the immigration system in its history". The Statement provides a good body of information on the requirements for each of the Tier 1 categories, together with clarification as to how the points will be allocated in each category and when switching between sub-categories and various Tiers will be permitted.

However, there are inevitably some anomalies and unanswered questions that will need to be addressed, for example:

  • UK Students will only be able to switch into Tier 1 and will no longer have the option of switching in country into work permit employment.
  • Are employers who recruit at graduate entry level happy to have their new recruits issued with a blanket permission to work in the UK under Tier 1, rather than being tied to them under a work permit?
  • The Tier 1 sub-category of Post Study Work will enable UK students to work for up to 2 years in the UK following completion of their study, but will not count towards the qualifying period for settlement. Will this really be such an attractive option for migrants looking to base themselves here?
  • The maintenance test imposed for Tier 1 migrants (apart from investors) applying from overseas would require a migrant with a spouse and 3 dependent children to show funds of at least £6,800, irrespective of where in the world they currently live. We assume that funds provided by way of an advance from the employer will be accepted, but will bank loans also be acceptable? And are employers happy to have to take on this additional financial burden?
  • Citizens of 17 countries will be exempted from the English language requirement, as English is deemed to be the majority language in these countries. It is interesting to note that South Africa is not included whereas Belize is (where according to one source only 3.9 % of the population speak English as a first language).

Comprehensive guidance will be available before each Tier is rolled out, so there is hope that these concerns will be fully addressed.

The new UK system is based on the Australian points based system. It is interesting to note that feedback from our contacts there is that the system has become increasingly complicated, and that decision-making in some areas has been taken away from the Embassies overseas and returned to Government offices in Australia - the opposite direction to that being taken by our Government.

Exciting and challenging times are ahead as we all come to grips with the new system. We look forward to working with our clients on all phases of the roll out of the PBS to make it as painless as possible.

Who will Tier 1 apply to?

Tier 1 is the ‘Highly Skilled Tier’ for individuals deemed to contribute to the UK’s productivity and growth. This will replace the current HSMP (Highly Skilled Migrant Programme), Investor, International Graduates Schemes (IGS), Fresh talent: Working in Scotland Scheme (FtWiSS), Business Person, Innovator, Sole Representative, Self-Employed Lawyer and Writer, Composer and Artist routes.

The HSMP and Investor routes will remain largely unchanged. The Business Person category will be altered slightly to become the ‘Entrepreneur’ sub-category, and IGS and FtWiss will become the Post-Study Work sub-category.

75 points will be required to obtain approval under Tier 1 and there will also be English language and maintenance requirements (apart for investors).

Heads up on issues and areas of interest

Students and graduate programmes – UK students will no longer be able to switch in-country to become work permit holders (Tier 2), but will instead either need to leave the UK and apply at a British Diplomatic post in their country of nationality/ permanent residence or will have to gain approval under Tier 1 (e.g. Post-Graduate Study sub-category). This could make graduate programmes more complex to manage for employers.

Post-Study Work – will extend the current IGS from one year to two, allowing new graduates in the UK to take employment with any employer. However, time spent in this category will not count towards settlement (indefinite leave to remain).

Working holiday-makers (and those who employ them) – at present working holiday-makers are able to switch into the Highly Skilled Migrant Programme without leaving the UK. However, under PBS this will not be possible i.e. working holiday-makers will have to apply from their country of nationality/ permanent residence for approval under Tier 1. This will result in inconvenience and added cost.

Innovator, Sole Representative, Self-Employed Lawyer and Writer, Composer and Artist routes will cease to have an equivalent, with individuals already in these categories expected to either extend their stay before the existing categories are removed or to qualify under a new Tier 1 category.

English language requirement - with the exception of those able to invest at least £1m into the UK, English language ability will be essential. Applicants must either have a qualification equivalent to the Council of Europe’s Level C1 (approximately GCSE Grade C), or a degree taught in English, or prove they come from an approved list of majority English-speaking countries1.

Maintenance requirement – the applicant will need to gain 10 points in this category for themselves and for each family member. 10 points will be awarded to the main applicant if they have start-up funds of £400 plus other funds of £2,400. Dependants must have either two thirds of the funds of the main applicant (first dependant) or one third of the funds (subsequent dependants). Investors will be exempt from this requirement and those switching in the UK to Post-Study Work from Tier 4 (students) will need to show £800. For migrants coming from low-income countries this may be problematic.

Indefinite leave to remain (ILR) - time already spent in HSMP, Investor, Business Person, Innovator, Sole Representative, Self-Employed Lawyer and Writer, Composer and Artist categories will count towards the threshold for applying for ILR (settlement) under Tier 1.

At present, anyone who has leave as a HSMP but then switches into the work permit category cannot amalgamate time spent for the purposes of ILR - it is necessary to spend 5 years as a work permit holder before becoming eligible for ILR. Under the new system time spent under Tiers 1 and 2 can be amalgamated.

Transitional arrangements - Sole Representatives, Self-Employed Lawyers, Writers, Composers and Artists, and Innovators can apply for an extension before the categories are removed and if successful will be granted enough leave to take them to the threshold for applying for settlement. This may be interesting for the Foreign Lawyer category, who are currently granted 12 months at a time as it appears that they will be able to obtain an extension of up to 4 years if required.

All Tier 1 applications, whether in the UK or from outside will be a one-step process. Initial grant will be for 3 years and then extendable by 2 years (with the exception of Post-Study Work which will be for 2 years and will be non-extendable).

Tier 1 General Category (currently HSMP)

This will incorporate the HSMP (as amended in 2006). 75 points are required to qualify and points will be awarded for:

  • Qualifications (up to 50 points)

  • Previous Earnings (up to 45 points)
  • Age (up to 20 points)
  • UK experience (UK studies or UK work experience) (5 points)

Entrepreneurs

This will combine the existing Business Persons and Innovators routes. Entrepreneurs will not be allowed to seek employment in the UK – they must take over, join or establish a UK business.

Up to 75 points will be awarded to entrepreneurs who:

  • have access to £200,000 (25 points);
  • these funds are held in a regulated financial institution (25 points);
  • the funds are disposable in the UK (25 points).

Investors

Investors are not required to work in the UK, although they may do so if they enter the UK under the new sub-category. Investors who entered under the old rules will continue to be prohibited from taking employment (although they can continue to be self-employed).

75 points will be awarded to an investor who either:

  • Holds at least £1 million in a regulated financial institution, which is disposable in the UK; or
  • Owns personal assets exceeding £2 million after liabilities, AND holds money in a regulated financial institution, disposable in the UK, which amounts to at least £1 million.

Investors are exempt from the English Language and maintenance requirements.

Extending a period of leave in the UK

Tier 1 General Category

This will incorporate the HSMP (as amended in 2006). 75 points are required to qualify and points will be awarded for:

  • Qualifications (up to 50 points)
  • Previous Earnings (of which a proportion must have been earned in the UK) (up to 45 points)
  • Age (up to 20 points)
  • UK experience (UK studies or UK work experience) (5 points)

Entrepreneurs

Extension applications must satisfy different tests to out-of-country applications. Up to 75 points will be awarded for applicants who meet criteria relating to how much they have invested in businesses in the UK, whether they have taken over, joined or established a business and whether they have effectively created jobs for others. Specifically the Entrepreneur must show that s/he:

  • Has invested at least £200,000 in cash directly into one or more businesses in the UK (20 points);
  • Within 3 months of entering the category, has either:

    • registered as self-employed with HMRC; or
    • registered a new business in which s/he is a director; or
    • registered as a director of an existing business. (20 points)

  • Is engaged in business activity at the time of the application for further leave. (15 points)

  • Where new businesses have been established, an aggregate of 2 new full time equivalent paid posts had been created for at least 2 persons settled in the United Kingdom across the businesses for at least 12 months each; or
  • Where existing businesses were taken over or joined , the services and investment must have resulted in the creation of at least 2 new full time equivalent jobs across the businesses for at least 12 months each. (15 points)

Investors

  • Up to 75 points will be awarded to investors for continuing to satisfy the investment requirements (investing in UK Government Bonds, shares or loans to active UK companies, making their investments within three months of entering the category and maintaining their levels of investment). Specifically:
  • Has money of their own under his control in the UK amounting to no less than £1 million; or (30 points)
  • Owns personal assets which, taking into account any liabilities to which they are subject, have a value exceeding £2 million; and
  • has money under their control in the UK amounting to no less than £1 million, which may include money loaned to them provided that it was loaned by a financial institution regulated by the Financial Services Authority. (30 points)
  • Invested not less than £750,000 of his capital in the UK by way of UK Government Bonds, share capital or loan capital in active and trading UK registered companies (other than those principally engaged in property investment and excluding investment by the applicant by way of deposits with a bank, building society or other enterprise whose normal course of business includes the acceptance of deposits). (30 points)
  • Made that investment within 3 months of gaining permission to enter the category and maintained the investment for the full period of Leave. (15 points)
  • Transitional Arrangements

    Whilst those with existing leave will be able to stay in the UK until their leave expires, the Government acknowledges some migrants who are already in the UK may lose out when the PBS comes in, if when they come to extend their leave, they no longer meet the criteria.

    The following transitional arrangements have been made for the main categories below:

    HSMP transitional arrangements put in place in November 2006 will continue to apply under the Highly Skilled General category.

    Sole Representatives, Self-Employed Lawyers, Writers, Composers and Artists, and Innovators can apply for an extension before the categories are removed and, if successful, will be granted enough leave to take them to the threshold for applying for settlement.

    Investors and Business people will not require transitional arrangements because the Tier 1 extension tests will be broadly the same as at present.

    As the Statement confirms, this Tier is due to rolled out in the first quarter of 2008 (within 100 days) with detailed guidance to follow. We will continue to keep you updated.

    Please click here to see the full Statement of Intent.

    Footnote

    1. Antigua and Barbuda, the Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Guyana, Jamaica, New Zealand, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, Trinidad and Tobago, USA.

    This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

    Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

    The original publication date for this article was 07/12/2007.

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