The U.K. has long served as one of Europe’s most historic and vital financial hubs, drawing competitive businesses and highly skilled workers from all over the world.
If your company has plans to hire foreign workers—whether you already have an entity in the U.K. or your international expansion plans include establishing one—it’s important to be familiar with the rules regarding work permits, especially if you plan on hiring European residents, as Brexit has brought about many changes.
Let’s explore the ins and outs of work permits in the U.K.
1. Brexit has significantly impacted work visas
Brexit fully took effect on January 1, 2021. With the exit from the European Union, the United Kingdom has implemented set its own standards for hiring foreign workers, particularly those from the EU.
Here are some important considerations for hiring in the U.K.:
- Brexit effectively ended the free movement rights that EU nationals once enjoyed. Previously, EU nationals could relocate and find employment in any of the EU member states, including the U.K. Now, EU workers can no longer move to and work in the U.K. unhindered.
- EU citizens are no different than any other foreign workers when applying for U.K. employment. They will need to undergo the same visa application process and pay the same fees as non-EU migrants.
- EU nationals that were employed in the U.K. before Brexit had to apply for settled status or pre-settled status to maintain their rights to live and work in the country.
This new system was designed to treat EU and non-EU immigrants equally, prioritizing merit rather than status as a citizen within the European Union.
The new point system
At present, non-U.K. citizens must apply and be approved for a work permit in the U.K. before arrival (people from Ireland are excluded from this requirement). According to the government’s new scoring system, you’ll need at least 70 points, which can be amassed in two primary categories:
Mandatory criteria: All workers seeking their permit must meet these non-negotiable criteria, in addition to passing a criminality check:
- A job offer from a licensed sponsor: 20 points
- A job at an appropriate skill level (RQF3 level or higher): 20 points
- English language proficiency at the required level (B1): 10 points
Tradeable: After obtaining the requisite 50 points, applicants are required to obtain an additional 20 points, which can be achieved through a variety of avenues:
- Minimum salary of £23,039: 0 points
- Salary of £23,040–£25,599: 10 points
- Salary of £25,600 or more: 20 points
- Job in an occupation experiencing a shortage: 20 points
- Ph.D. in a subject relevant to the job: 10 points
- Ph.D. in a STEM subject relevant to the job: 20 points
Although a job offer is typically a requirement, there are some cases where highly skilled workers can apply for a self-employed work visa if they plan to start or purchase a business.
2. Employers must obtain a sponsorship license to hire
The majority of foreign work applicants are now expected to have a job offer prior to applying. And for businesses, once you have made an offer, you’ll need to acquire an Employer Sponsorship License.
How do you apply for a sponsorship license?
You can now apply by completing the online application and sending in the following:
- Scans of your submission sheet and supporting documents (if the documents aren’t in English or Welsh, they must include a certified translation)
- License fees, which range from £536 to £1,476 depending on the type of license and the size of your organization
In most cases, the government will process your application within two months. However, if you need an expedited decision, you may be able to pay £500 to receive an answer within 10 business days.
3. There are four primary types of work permits/visas
To properly comply with existing U.K. immigration and labor laws, employers should know about the various types of work visas available for skilled foreign workers.
This type of work visa is typically meant for short-term work trips. It applies to visitors who aren’t part of the European Economic Area (EEA) or Switzerland but are traveling to the U.K. for business-related purposes.
This U.K. visa typically takes 15 to 21 days to obtain and requires:
- An application and fees paid by the certified employer
- Biometric details
- A passport photo
Once confirmed, this temporary business permit allows the worker to stay for up to six months, after which they’ll need to submit a long-term business visa application to remain in the country.
With this visa, the foreign worker’s business activities are restricted. They aren’t allowed to engage in work activities or collect a salary; however, they can engage in conferences, meetings, negotiations or research projects.
Skilled Worker visa (Formerly Tier 2 visa)
This employer-sponsored visa is for highly skilled employees outside of the EEA or Switzerland and is likely what most businesses will apply for. This allows an employee to stay in the U.K. for five years and 14 days.
A Tier 2 visa usually takes 21 days to obtain and allows the recipient to engage in business activities and receive a salary, so long as those activities are described in the Certificate of Sponsorship. Additionally, employees may not own more than 10% of the company unless they earn £160,000 or more.
Tier 2 (intra company transfer)
Do you have employees who already work for your multinational business
, but will now be transferred to the U.K. branch?
If so, there are two types of intracompany transfer visas:
- Long-term staff: This U.K. work visa is for employees who have been with the company for at least a year. It can last up to three years with an optional two-year extension. Once that five-year period is over, the employee must take a “cool-off period” of one year. That said, there are exceptions that allow high-earning employees to stay up to nine years on a long-term staff visa, but they must earn at least £120,000 a year.
- Graduate trainee: This U.K. visa is for employees who have been with the company for at least three months and plan on spending less than a year participating in a graduate training program. Companies are limited to five of these visas per sponsor per year, and the applicant must be training for a managerial or specialist role.
Entrepreneur permit (tier 1 entrepreneur visa)
Self-employed individuals who seek to start a business, relocate to the U.K., or purchase an existing business can apply for an entrepreneur permit. To do so, they must prove that they have one of the following:
- £50,000 in investment funds in a regulated financial institution
- Access to £200,000
- £200,000 invested in a pre-existing U.K. business
In addition, the applicant is required to provide the following documentation:
- An official statement of available investment funds
- A business plan
- Passport and passport photo
- Proof of English proficiency
- Bank statement of savings
- Biometric information
- Medical test results
- A criminal record certificate
4. Employers don’t need work permits for highly skilled global talent
One of the benefits of doing business in the U.K. is that it’s ranked as the eighth most business-friendly country in the world. Starting in 2021, highly skilled workers in academia or research, arts and culture, or digital technology who were able to satisfy the required level of points could potentially enter the U.K. without a job offer if they were endorsed by a recognized U.K. body. If you’re interviewing this type of candidate, your business wouldn’t need to be a licensed visa sponsor.
5. The U.K. approves fewer than 200,000 work visas each year
It’s important to remember that not every foreign worker who applies for a work permit will receive one. Each year, more applicants will apply than be granted entry.
When interviewing and hiring foreign workers, keep in mind that a candidate who has the requisite experience, education and skills will have a much higher chance of being granted entry and joining your company.
Historically, the number of approved visas has been increasing each year and almost reached 200,000 in 2019, but since the pandemic’s beginning, we’ve seen a decrease in these numbers to approximately 125,000 in 2020 and 123,000 in 2021.
A compliant alternative for hiring foreign workers
Hiring foreign talent to work for your business in the U.K. requires you to have a license and the potential employee to apply and qualify for a permit according to the point system. This can be a lengthy and intricate process.
However, there’s an alternative to attracting the best international talent for your U.K. business that doesn’t require work permits: hiring them to work remotely for you in their home country. This is possible, even if you don’t have an entity in the country, when you partner with a U.K. employer of record.
An employer of record (EOR) acts as your new hire’s legal employer in their home country. The EOR has in-country HR experts who help ensure that workers are hired and paid in accordance with all labor laws. Partnering with an EOR gives your U.K. business more options for hiring foreign workers because you can meet the talent where they are and don’t have to worry about satisfying work permit requirements.
Learn more about how to compliantly hire foreign workers by speaking with a global solutions advisor today.