How the UK’s Visa Policy Shifts Impact Businesses

How the UK's Visa Policy Shifts Impact Businesses

The current UK government’s stance on immigration has taken a firm turn, extending its policies to unexpected fronts. In addition to imposing stricter regulations on skilled workers and the families of care workers, the recent announcement suggests that family members of British citizens will also encounter hurdles in obtaining visas, with increased wage requirements.

While adjustments have been made, such as a reduction in the family wage cap after public outcry, the overarching trend of tightening immigration policies may carry unintended consequences for the economy. These limitations, coupled with an atmosphere perceived as less welcoming to migrants, could deter talented individuals from entering the country and even prompt some to consider emigration.

The New Visa Regulations

Home Secretary James Cleverly outlined three new visa measures as part of a broader plan:

  1. Foreign care workers are no longer allowed to bring family members to the UK by default unless meeting criteria under another visa category.
  2. The salary threshold for skilled worker visas to increase by nearly 50%, rising from £26,200 to £38,700.
  3. Most exceptions for sectors facing skill shortages are to be abolished, leaving health and care visas as the sole beneficiaries of a 20% discount.

Family Visa Changes:

Of particular concern domestically are the changes to family visa rules. Present regulations mandate that any British citizen seeking to bring family members to reside in the UK must demonstrate the ability to financially support them.

This necessitates a gross income of £18,600, equivalent to the minimum wage for 18 to 20-year-olds in full-time employment. This threshold escalates with each child, increasing by £3,800 for the first child and £2,400 for subsequent children, with consideration also given to cash savings exceeding £16,000.

Salary Threshold Changes:

Initially, the salary requirement for family visas was poised to more than double to £38,700, mirroring the threshold for skilled worker visas and surpassing the current average median salary in the UK. However, a reversal has seen this figure lowered to £29,000. Nevertheless, the £38,700 cap remains a future possibility, and the earnings of a spouse remain unaccounted for unless they hold a job in the UK. Furthermore, there are no indications of future cap increases for children accompanying their families to the UK.

The salary thresholds for both visa categories have remained stagnant since 2012, necessitating adjustments that far surpass the rate of inflation. For context, the national minimum wage is set to rise to £11.44 per hour for individuals aged 21 and over from April 2024, translating to a gross salary of £23,795. Although the London Living Wage stands at £13.15 per hour, equating to a gross salary of £27,352, this scheme is elective rather than a mandatory minimum wage.

Potential Impact on Businesses

Preceding this decision was a modification to student visas, restricting dependents to government-sponsored students and postgraduates who can independently support themselves financially. These changes are part of a broader suite of immigration-related policies seemingly tailored to garner votes ahead of the forthcoming General Election, mandated to occur by January 2025.

The recent alterations to visa regulations may cause a shortage of care workers and prompt British nationals to relocate abroad. The heightened salary threshold for visas may preclude foreign hires across numerous sectors. This decision appears tailored for short-term gains and may result in a lose-lose scenario for businesses.

However, there is a silver lining for employers amidst these visa changes. Sponsor licenses will no longer necessitate renewal every four years but will instead be automatically extended for ten years, reducing both administrative burden and costs for employers.

Potential government change in the upcoming year may result in further amendments to the visa and immigration regulations, including the family visa rule. The hope is for a visa system that prioritises talented workers and entrepreneurs over political gains.