UK Business to Be Hit by Visa Change Consequences

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The future of UK business may be in decline, especially in the short term. Aside from the detrimental effect the country has experienced since leaving the EU, the government have now introduced a new visa ruling for Tier 2 visa changes. The consequence of this change will now mean that the majority of non EU migrants in the UK, who are on a tier 2 visa, will now need to earn £35,000 or more in order to qualify for settlement in Britain. This means that anyone from outside of the EU who entered the UK as of April 2011 via this visa, may now face deportation.

A dramatic change, it has already caused ripples across the country, sparking major outcry from industry leaders. Currently, large amounts of UK businesses rely on foreign talent or skill workers and following this decision, they will now find it difficult to secure the necessary staff to fill the demands of their profession. Furthermore, it has also raised the question of whether this alteration will cause a negative outlook on Britain and its attractiveness for non-UK entrepreneurs to start up business there.

The Visa Changes

Tier 2 visas are given by companies to non-EU workers.

The visa is designed for:

To hire workers from foreign shores where it is deemed that the position can’t be filled by a local worker.
It gives skilled workers the opportunity to settle in UK and obtain work permits after carrying out a period of 5 years of residency.

The individuals who fulfil the five-year period – which will be extended to six as of this year under the new ruling – must either meet the minimum requirements for indefinite leave to remain (ILR) or they will have to leave the country for at least a year before they can reapply to gain access to the UK. The updated ILR requirements now include the £35,000 minimum salary requirement, minimum residence, and company sponsor. Not all of the positions under the new visa scheme will be effected as a result of the change however. The jobs that will be exempt for the ruling are those that fall under the shortage occupation list – programming, engineering, social work, electronics and medicine.

The Effects

One of the main concerns is the obvious one. This salary requirement is high, which means it is going to cause major problems for the start-ups of the country. Concerns have been raised that businesses who are unable to meet this wage will loss staff and the business they need. Thousands of business rely on skilled foreign workers in order to operate and this ruling will mean that they’ll be forced to terminate contracts of their sponsors because they can’t afford to pay them that much. The effect of this is that, it will leave companies with no other option other than to hire inexperienced local staff, causing immediate productivity loss and time loss due to having to train. If they then can’t keep up with quality or orders, business will be lost, which will be detrimental for start-up progression.

As mentioned, another huge concern is the fact that the UK will be seen as unattractive place for new companies who would need tier 2 sponsored employees to function. It will now be more lucrative for business to set up elsewhere, as they can get the staff and it will generally be more profitable, tax friendly and overall more beneficial to them.

The country is already experiencing a lack of skilled workers in several skilled profession jobs such as manufacturing, and with these added changes, the move is predicted to cause British business further problems. If you think for example about the hospitality and food industries, they employ thousands of non-eu staff to maintain or run their business. A lot of these staff will be nowhere near earning £35,000 and for staff such as waiters, companies won’t be able to pay them that much. Ultimately meaning, a huge loss of staff and empty job positions, that Brits don’t typically want to do. The ramifications of that alone could be huge.

This full effects and development of this change will be brought to the surface over the next few months but the negative impact it could have, is a huge one.

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