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Stevens Machi Solicitors

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New Immigration Charges Unaffordable for Many Businesses

New immigration charges for businesses may lead to a skills gap because many firms will struggle to meet the cost, new research has found.

The survey, which was conducted in partnership by London Chamber of Commerce and Industry and ComRes, found that less than a quarter (21%) of London businesses say that they would be able to afford the new charge that comes into effect next April as part of the Immigration Act 2016.

The charge means employers who sponsor skilled workers from outside of the European Economic Area will have to pay £1,000 per employee per year, with a reduced rate of £364 for small or charitable organisations.

It is designed to cut down on the number of businesses taking on migrant workers and incentivise training British staff to fill those jobs. However, the LCCI survey found that only 36% of London businesses say they will be encouraged to train or hire British workers instead of hiring non-EEA nationals.

Meanwhile, a third (33%) say they will need to cut costs elsewhere in order to pay the charge and employ workers on Tier 2 visas. In addition, 45% of business decision makers say that the charge will lead to skills gaps in the business if they have not been able to hire British workers or cut costs elsewhere.

"While we obviously recognise the aim behind this act, we are concerned that the charge will hit many of those for whom it was not actually intended,” explained Chief Executive of London Chamber of Commerce and Industry, Colin Stanbridge.

"These charges will have a significant effect on businesses and may force some to cease trading either because they can no longer afford to or they can no longer find the skills," he added.

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