January 2021 New Immigration Rules: what do employers need to know?

The end of the transition period maintaining the status quo for EU nationals after the UK’s exit from the EU is fast approaching.

Once “freedom of movement” ends at the end of this year, a new set of Immigration Rules will be put in place which will apply to all non-UK nationals*.

What has been announced so far?

A new policy document issued by the Home Office in July builds on the planned changes to the Immigration Rules that were announced in February 2020. Employers can read our previous article here.

For employers, the overall message is clear. The Home Office has effectively rolled back most of the restrictions placed on work visas since April 2011 and it will be much easier to sponsor non-UK nationals as new hires from January 2021.

We anticipate that the streamlined digital application system introduced for the EU Settlement Scheme is likely to be used and enhanced for EU nationals applying for a work visa. For those UK employers without a sponsor licence, they will need to apply for one in order to sponsor non-UK nationals.

Whilst we await the government’s publication of a Statement of Intent to confirm the implementation of these policies, we have highlighted some of the key takeaways for employers.

*References in this article to non-UK nationals do not include Irish nationals as they do not require permission to live or work in the UK.

What are the key themes?

EU nationals

Whilst the new Immigration Rules are designed to apply to all non-UK nationals based on the skillsets they bring to the UK, there continues to be a preferential treatment for EU nationals as described below.

In most cases, EU nationals will not be required to attend an appointment at an overseas visa application centre to enrol their fingerprints. Instead, they can use an “app” to enrol their digital photograph from their smartphones and are not required to enrol their fingerprints.

As a result, EU nationals are not affected by the closure of visa application centres due to COVID-19. There will be no delays for them due to appointment availability.

EU nationals who apply under the new Immigration Rules will receive a digital immigration status, which can be accessed securely online. Non-EU nationals will continue to be issued with biometric residence permit cards (‘BRP’), which are susceptible to delay in production, theft and loss.

Skilled worker route

A new “Skilled Worker” route will replace the Tier 2 (General) route. It is expected that the changes will enhance UK employers’ ability to recruit skilled workers.

The Skilled Worker route has many advantages for employers seeking to recruit talent from abroad:

  • There will be no annual cap on the number of work visas.
  • The resident labour market test will be eliminated.
  • The skills threshold will be lowered from RQF 6 (degree level) to RQF 3 (A-level).
  • Tradeable attributes will be introduced, to compensate for low salary with PhD in a relevant field or a shortage occupation job.

From a practical perspective, however, we foresee an issue with sponsoring employees in skilled jobs where it may be cost prohibitive.

Employers may be reluctant to pay an additional £3,000 – £5,000 to hire a non-UK national, regardless of the relaxation of the requirements to obtain a work visa.

Intra-Company Transfer route

The “Intra-Company Transfer” route will undergo a fundamental change. It will allow international assignees to switch their immigration status to the “Skilled Worker” route, which leads to settlement.

We await further guidance on whether any time spent under the Intra-Company Transfer route can be counted towards the five-year residence requirement for settlement.

Overall, this is great news for employers who are often asked to localise their expats. It will introduce greater flexibility into employers’ mobility strategy.

The Home Office also intends to adjust the “cooling off” period to limit its application when sponsoring “Intra-Company Transfer” migrants. We look forward to specific examples on how the rules on cooling-off period will be relaxed.

Unlike the “Skilled Worker” route, the “Intra-Company Transfer” route maintains the RQF 6 (degree level) skill level and has a minimum salary requirement of £41,500 per year or the “going rate” for the role, whichever is higher.

What should employers be doing?

Whilst the proposed changes to the Immigration Rule are generally positive, employers will face an adjustment period before the Home Office can deliver their service efficiently with as few mistakes as possible.

To try to minimise errors and delays as far as possible, employers are advised to:

  • Keep track of the development and the implementation of the new Immigration Rules
  • Make any necessary preparations in advance
  • Maintain flexibility in order to identify and mitigate their people risks


Key takeaway: You should aim to obtain a sponsor licence as soon as you can. It can be an effective tool to expand your business by allowing you to sponsor non-UK nationals from 1 Jan 2021. Many EU nationals will require a work visa if they do not qualify under the EU Settlement Scheme. This will have a huge impact if you are thinking of sourcing your employees from the EU.


The resurgence of COVID-19 in the second half of 2020 has presented employers with additional compliance issues. They need to navigate their way through the new Immigration Rules and COVID-19 issues at the same time.

As countries grapple with the containment of the virus, we anticipate that some employees may find themselves in a country where they are not normally resident. Working remotely can potentially raise significant issues in immigration, employment and tax. We discussed these issues in a recent webinar.

To discuss how the New Immigration Rules will affect your business, contact Yuichi Sekine.

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