Business immigration – update on upcoming changes

By Nicola Smyrl

Partner

22 May 2025

Insights News

Immigration is rarely out of the headlines at the moment.  In May, Sir Keir Starmer announced Labour’s plans to cut levels of immigration in the UK in its long awaited White Paper.  The proposals included in the White Paper were described by the Prime Minister as creating an immigration system which is controlled, selective and fair.

Alongside this, the Government has brought forward new legislation to target illegal working in the UK and increase border security.

In this article, we highlight the main developments in this area which employers should be aware of:

White Paper – future approach to immigration

Earlier this month, the Government published its White Paper on “Restoring Control over the Immigration System”. The main aim of the proposals is to lower net migration to the UK.  However other stated aims include encouraging businesses to contribute to training and recruiting workers from the domestic labour market and reducing the scope for exploitation of migrant workers.

Whilst the White Paper confirms that the government intends to continue to attract the “brightest and best” to the UK, including by introducing faster routes for bringing people to the UK who have the right skills and experience to supercharge UK growth in strategic industries, there will be significant restrictions on employing migrant workers in roles which sit below graduate level.  This will mean that some employers will need to carefully rethink their recruitment strategies and resourcing plans for mid-level roles which are currently eligible for sponsorship under the skilled worker route.

The key provisions of the White Paper that are most likely to impact businesses include:

1. Greater restrictions on skilled worker route

The skilled worker route is the UK’s main work route leading to settlement. Under the new proposals, this route will be subject to much greater restriction than is currently the case, and these are the changes set out in the White Paper which are expected to take effect first.

As a result, it is expected that there will be an increase in applications under this route, so that applications can be considered before new rules come into place.

The most significant changes to the skilled worker route include:

• Eligibility will be restricted to roles at graduate level (currently eligibility is set at A-Level or equivalent).   This will reduce the number of eligible occupations by around 180 occupations.

• Skilled worker minimum salary thresholds will rise as the “going rates” for graduate level occupations are higher. The Migration Advisory Committee (MAC) will also be asked to undertake a thorough review of skilled worker salary requirements, including discounted rates for new entrants and PhD holders.

• Consideration will be given to whether graduate level (and above) occupations should have guaranteed access to the skilled worker route or be subject to a workforce plan.  This is aimed at reducing reliance on migrant workers in certain sectors.

• Salary thresholds will increase for visa holders seeking to bring in dependants.

• The Immigration Salary List, which allows specified occupations a discount from the current salary thresholds, will no longer be in use. It will be replaced with a new Temporary Shortage List (TSL) for occupations below graduate level which are in long-term shortage. Visas granted based on being on the TSL will be time-limited and the main applicant will not be able to bring dependants to the UK.

• Social care visas for carers and senior carers under the skilled worker route will be closed to new applications from abroad. Until 2028, visa extensions and in-country switching for those already in the UK with working rights will be permitted but this will be kept under review.

• The minimum English language requirement will increase and apply to adult dependants as well as main applicants.

2. Changes to Immigration Skills

The ISC, which applies to the skilled worker and senior and specialist worker routes (subject to limited exceptions), will increase by 32%. For medium or large sponsors, it will rise from £1,000 a year to £1,320 a year. For small or charitable sponsors, it will go from £362 to £480 a year. This will increase the costs of engaging migrant workers and may encourage employers to recruit form the domestic labour market where possible.

3. Graduate Visa

The Graduate route is an unsponsored route which allows students to stay in the UK for two years (or three years for PhD students) after graduation. The purpose of the route is for international student graduates to work, or look for work, following the successful completion of an eligible course. The White Paper sets out proposals to reduce the Graduate visa duration to 18 months.   It is possible that this change will affect the number of international students choosing the UK for study and subsequent employment.

4. Settlement and British citizenship

The residence requirements for settlement applications will increase from five to ten years. The residence requirement for citizenship applications will also increase, though it is unclear to what threshold, following a consultation which will take place later this year.

We will monitor the development of these policies and provide more information as it becomes available

Extension of right to work checks

The Border Security, Asylum and Immigration Bill, which is currently going through Parliament, is aimed at increasing border security and reducing illegal immigration to the UK.  The Bill includes plans to extend right to work checks to employers hiring people in the gig economy in an attempt to bolster the prevention of illegal working regime already in place in the UK.

The new rules would require employers and businesses to carry out right to work checks not only for traditional employees, but also for individuals engaged through non-standard contracting arrangements. The change would significantly expand the current framework to cover a broader range of work arrangements, particularly those involving self-employment, zero-hours contracts, through agencies and in other casual or temporary roles.

According to the government’s published impact assessment, this amendment aims to close key loopholes in the existing system that allow irregular and illegal working practices to persist. The right to work scheme was designed with conventional employment in mind and has not kept pace with modern labour market trends. The rise of gig work, casual contracts, and agency-based hiring has enabled some businesses to sidestep compliance by exploiting these flexible models. By extending the statutory obligations, the government seeks to level the playing field, promote fair competition, and reduce the negative socioeconomic effects of illegal working.

The change is likely to have the biggest impact on sectors that rely heavily on a casual workforce such as hospitality, social care and construction.  Affected businesses will need to review their current recruitment and induction processes to ensure that the required checks are being carried out in relation to the relevant workers.

This is an important issue for employers, the Home Office operate significant penalties for non-compliance with the requirement to conduct right to work checks prior to employment. These penalties include fines of up to £60,000 per illegal worker. Further penalties include potential business closures, director disqualifications and, if a criminal offence has occurred, potential prison sentences of up to five years.

Employers should review current approaches to right to work checks and consider what changes will be needed to comply with the new rules in due course. The changes are expected to be in force by 2026/2027 following a consultation process.

If you are affected by any of these proposed changes and would like to discuss how you can prepare your business for the changes, please contact Taylor Walton’s employment team here.

Disclaimer: General Information Provided Only
Please note that the contents of this article are intended solely for general information purposes and should not be considered as legal advice. We cannot be held responsible for any loss resulting from actions or inactions taken based on this article.