UK: Changes to Tier 1 and Tier 2 of the Points Based System

Last Updated: 11 May 2010
Article by Rahul Batra

After launching the Points-Based System (PBS) just two years ago, the UK Border Agency (UKBA) has implemented another set of changes which have taken effect from 6 April 2010. The changes relate to Tier 1 and Tier 2 of the PBS, and concern skilled people wishing to work in the UK.


Tier 1 is for highly skilled migrants who want to come to the UK to pursue employment. The 75 points threshold remains the same, as do the English language and maintenance requirements. However, there are a number of changes to the points' allocation. Changes include qualifications being awarded 30-45 points (including a UK recognised Bachelors degree) and previous earnings attracting 0-75 points on several brackets between £25,000 and £150,000.

  • Applicants with very high previous earnings will be able to satisfy the points-based test without any formal qualifications.
  • Extension applications are subjected to the same points table, with small variations for age and UK experience.
  • Leave is now granted for 2 years initially and can be extended for a further 3 years.

Transitional arrangements are in place for migrants who are already in the UK under Tier 1 (General) with leave granted before 6 April 2010 or HSMP. These migrants will not be subject to the new points table.

By raising the income thresholds, it is evident that the Government wants to target only those individuals who have high earnings in their respective countries. The UK Border Agency intends to review the multipliers for calculating overseas earnings for highly skilled workers in the future but no further information is available.


Tier 2 is for migrants with a job offer in the UK and includes intra company transfers. Once again the 50 points threshold remains the same, as do the English language and maintenance requirements, but there have been some changes to sponsorship and prospective earnings.

  • Intra-company transfers will now be allocated 25 points, 5 points less than those migrants who obtain a job which passes the Resident Labour Market test. The extra 5 points is to reiterate that British workers should be getting first choice for the job.
  • Prospective earnings have increased from 20 points for £24,000 and above, to 25 points for £32,000 and above. Earnings below £20,000 now attract 0 points.
  • Extensions for Tier 2 applications have been made easier whereby 50 points will be awarded to all applications provided the migrant is working for the same sponsor in the same job.
  • Changes in employment within the company will be allowed without having to make a new application provided the job remains within the Standard Occupation Code. Movement within companies will be easy for migrants provided they can satisfy few criteria. If certain criteria cannot be met, such as the new job falls outside of the SOC code then a new application has to be made but against the same criteria as the initial application.
  • Only if migrants are changing sponsors will they then be subject to the new points table.

The biggest change to Tier 2 (ICT) is the introduction of sub-categories. There are 3 categories within which intra-company transferees can fall into, these include: 

  1. Established Staff
  2. Graduate Trainee
  3. Skills Transfer


The plethora of changes brought about by the UKBA brings with it uncertainties and an element of confusion e.g. it is not clear from the guidance as to what constitutes a graduate. Many IT companies hiring individuals under the Intra-Company transfer route may face serious issues as most individuals will not be able to claim points for prospective earnings. Such companies have a policy of giving allowances, rent-free housing etc and these changes have created grave issues in bringing migrants to the UK.

It is important to note that the UK Border Agency will look at the gross salary figure stated on a Certificate of Sponsorship to check if the salary is at the appropriate rate for the job as per the relevant code of practice. The figure quoted must not be inflated in anticipation of any tax relief, such as relief on expenditure related to the employment, or tax which would be incurred by the employment of a resident worker but which is not incurred in respect of the migrant. Employers stand a risk of losing their licences and it is suggested that employers take note of this. We are happy to assist HR professionals and companies in designing their policies which fully meet the UKBA criteria.


The UK Border Agency is considering introducing a certification regime for Resident Labour Market Test for those employers identified as high risk. No further information has been released in this aspect and we will update clients as and when it is available.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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