Points Based Immigration System


The free movement of people within the EU to the UK will ended on 31 December 2020 and from 1 January 2021 a new points based immigration system was introduced, which will treat EU and non-EU citizens equally in terms of working in the UK.   This article explains how the new system.

What is the Points Based Immigration System?

The points-based immigration system is a scheme in which job applicants from outside of the UK, are awarded points based on certain characteristics, for example, their qualifications, salary level and if the role in which they are applying for is in shortage.

Under the new system, there will be several visa routes in which overseas nationals could come to the UK to work that is dependent upon the nature of the work they intend to undertake.  These are discussed in detail further on in this article.

To recruit from outside of the UK, an Employer must hold a sponsor licence.


Sponsor Licence

To recruit from outside the UK from 1 January 2021, Employers will be required to hold a sponsor licence for which there are several rules that govern how they are issued and used.


Eligibility for becoming a sponsor

For an organisation to be eligible, you cannot have any unspent criminal convictions for immigration offences or certain other types of offences such as fraud.  Furthermore, if an organisation has a history of failing to carry out sponsorship duties, then this will also prevent them from becoming a sponsor. 


Sponsor Roles

Employers will be required to assign the sponsorship process to key roles within the business.  Depending on the size and nature of the business, the sponsorship process can either be assigned to the same role/person or shared out amongst different roles/members of staff.  The key roles required will be:


Authorising Officer


This is a senior and competent person responsible for the actions of employees who use the sponsorship management system

Key Contact


This is an employer’s main contact with the UK Visa and Immigration (UKVI)

Level 1 User


This is somebody who is responsible for all day to day management of the licence using the sponsorship management system
Level 2 User This is an optional role that an employer can be assigned to using the sponsorship management system but with a more restricted access.


The person(s) assigned responsibility of the sponsorship process must not have any of the following:

  • Unspent conviction
  • Received a fine in the last 12 months by UK Visa and Immigration (UKVI)
  • Have been reported to UKVI
  • Based outside of the UK for most of the time
  • Be a contractor or consultant
  • Be subject to a bankruptcy restriction order or be undertaking a debt relief restriction order or undertaking
  • Have a history of non-compliance with sponsor requirements
  • Be a key person at a sponsor that had its licence removed in the last 12 months
  • Failed to pay VAT or other excise duty. 


Employer’s Responsibilities 

It is also a requirement of becoming a sponsor that Employers must:

  • Check that their foreign workers have the necessary skills, qualifications, or professional accreditations to undertake the job
  • Keep copies of documents showing the persons skills, qualifications and professional accreditations must be kept
  • Certificates of sponsorships must only be given to workers when the job is defined as one that qualifies for sponsorship
  • Tell UK Visa and Immigration if your worker is not complying with the conditions of their visa.

Where an employer fails to adhere to these conditions, then their licence may either be suspended, downgraded, or removed. 


Monitoring Employees

Employers are required to have appropriate systems in place which allows them to monitor foreign workers specifically in relations to:

  • Their immigration status
  • To keep copies of the relevant documentation
  • Tracking and recording their attendance
  • Keeping contact details up to date
  • Reporting problems to the UKVI. 

All documents relating to a migrant worker must be kept throughout the sponsor period and until either one year has passed from the date in which it ends or the day on which a compliance officer has examined and approved them, if less than one year after the sponsor has ended.

Change to Business Circumstances 

An employer is required to notify UKVI within 20 working days of any significant change to business circumstances, which is defined as:

  • A business stops trading or becomes insolvent
  • A business substantially changes the nature of their business
  • A business is involved in a merger or takeover
  • There is a change to the business’ address
  • There is a change to the allocated roles for dealing with work visas. 


Sponsoring under 18s

If an employer sponsors a young person, under the age of 18 then additional responsibilities are placed on the recruiting employer.   The employer must make sure that those under the age of 18 have suitable care arrangements for their travel, arrival and living arrangements whilst in the UK.

A letter from the parents is also required which gives their consent to the care arrangements and you must also obtain a disclosure and barring service check on those workers who will need it.

A breach of these requirements will lead to the UKVI removing the licence. 


Types of Sponsor Licence

Depending on the type of recruitment an employer wishes to undertake will determine the type of license that is applied for.  Both can be applied for where appropriate for the business. 

Tier 2 Licence 

This licence is required if you are recruiting skilled workers with long term, possibly permanent job offers.

Tier 5 Licence 

This licence is required if you are recruiting skilled workers on a short-term temporary basis. 


Associated Fees 

At present when recruiting from outside of the EU, UK Employers must pay to become a sponsor, and non-EU applicants are required to pay for their visa application.  From 1 January 2021, these rules will be extended to include those you recruit from within the EU.


Sponsored Licence:

Current fees an employer must pay if to be awarded a sponsor licence:

Type of licence Small businesses/charities Medium to Large Businesses
Tier 2 £536.00 £1,476.00
Tier 5 £536.00 £536.00
Tier 2 and Tier 5 £536.00 £1,476.00

The definition of a small business is if the annual turnover is less than £10.2 million and you have less than 50 employees.


Immigration Skills Charge 

In addition to paying fees for having a sponsor licence, there is also an immigration skill charge that employers must pay when recruiting from outside of the UK.

The fee will be charged when employing foreign nationals through the skilled worker and intra company transfer routes.  It is understood that the fee will be £1,000 per skilled worker for the first 12 months with an additional £500 charge for each subsequent six-month period.  Charities and small businesses will be able to pay discounted rates.


Visa Application Fee

All job applicants will be required to pay a fee to apply to work in the UK.  


Labour Market Test

Under the old visa scheme, an employer was required to complete the resident labour market test, which effectively demonstrated to UK Visa and Immigration that there was no “settled” worker available for the role from within the UK and that was why they needed to recruit from outside the UK.  This has been abolished as part of the immigration reform. 


Avoiding Discrimination

All employers have a legal duty to prevent illegal working in the UK by carrying out document checks before employing someone.  Carrying out right to work checks only on people believed not to be British because for example, of their colour or ethnicity, then this would be discriminatory.

To ensure discrimination does not occur, then all job applicants must be treated fairly and in the same way at each stage of the recruitment process, including the right to work checks.

You can read the Government’s Code of Practice on avoiding unlawful discrimination while preventing illegal working here.


Transition period between free movement and using a points-based system

In order to transition to the new points based immigration system, employers will be given six months to continue to accept passports and national identity cards of EU nationals in the usual way as evidence of their right to work in the UK.  They have until 30 June 2021 to be able to use current forms of evidence.

EU nationals may opt to provide their evidence through the Government’s online right to work checking service rather than providing original paper documents as part of a manual check.  When using this method, the employee will need to provide a share code either directly themselves, or via the online service which will then send a notification email to the employer.

An employer should give employees every opportunity to demonstrate their right to work but should not discriminate based on whether an individual is able and/or willing to demonstrate their right to work using the online checking service. To do so may result in you breaching the law.

So whilst employers may choose to encourage the use of the online check and may support the applicant in doing so (for instance, by providing access to hardware and the internet), then an employer is not permitted to mandate online checks.

Where an individual does not wish to demonstrate their right to work using the online service, an Employer must conduct the check manually.

Given that this transition period ends 30 June 2021, it means that from 1 July 2021, an applicant will need to have either a visa or settled/pre settled status to have the legal right to work in the UK moving forward.


How does this work alongside the EU Settlement Scheme?

EU, EEA and Swiss nationals and those who are a family member of an eligible person of Northern Ireland who currently work for a UK based organisation can apply to stay in the UK after Brexit under the EU settlement Scheme.

Provided they have entered the UK by 31 December 2020, they will be permitted to live and work in the UK after Brexit.  A grace period has been given to EU nationals to allow them until 30 June 2021 to apply to the settlement scheme.

For those employees who have indefinite leave to enter or remain, they can continue to live in the UK without applying to the EU Settlement Scheme.  However, if they spend more than 2 years in a row outside the UK then they lose their settled status.  They can avoid this by applying for the EU Settlement Scheme and if granted, they will get settled status meaning that they can spend up to 5 years in a row outside the UK without losing their settled status.

Furthermore, if an employee has lived in the UK before 1973, they will have been given indefinite leave to remain status. In which case, they do not need to apply for the EU Settlement status.

The deadline for applying for the settlement scheme is 30 June 2021 however the employee must already be in the UK by the 31 December 2020.  It will be the EU nationals own responsibility to apply, meaning that if you already employ them or they are going through your recruitment processes, you are not able to require them to do it.

If your employee is granted a settlement status then they will be given either settled status or pre-settled status based upon how long they have lived in the UK at the point of applying and the rights gained will differ depending on which status is granted. However, regardless of the type of status granted, the individual will be able to work in the UK as well as access public funds such as benefits and pensions, where eligible.


UK based employee’s business travel within Europe

As a result of the ending of free movement, it means that from 1 January 2021, British citizens traveling to the EU will require a visa.  However, the EU has confirmed that they would add the UK to their list of visa exempt countries, meaning that British citizens would not require a visa for up to 90 days within any 180-day period.  However, this is conditional on the UK granting visa free travel to EU nationals.  Furthermore, for short business trips and longer visits to the EU are matters for negotiation as part of the UK-EU trade deal.

In terms of passports, these would need to be valid for at least 6 months.


Further Information

For further guidance and immigration advice, we recommend:


Legal Considerations

All employers are required to confirm that all new recruits are entitled to work in the UK before they commence employment, by requesting the sight of an approved document. Failure to do this is a criminal offence under the Immigration, Asylum and Nationality Act 2006. The checks should be carried out for every prospective employee prior to starting work, irrespective of the job or position.

The Immigration (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2014 increased the maximum civil penalty for each illegal worker.

The Immigration Act 2014 introduces a non-refundable charge for the National Health Service for temporary migrants. This will be payable when migrants apply for their UK entry visa or extend their existing UK visa, and will enable the worker to access the NHS free of charge in the same way as a UK resident. Employers should bear this additional cost in mind when recruiting temporary migrant workers. Note that this may also be applied to students.

As from 6 October 2016, the Immigration (Variation of Leave) Order 2016 will mean that an overseas domestic worker who has reasonable grounds to believe he/she is a victim of modern slavery, may have his/her limited leave to enter the United Kingdom extended until 28 days after a competent authority has notified the individual of its decision as to whether or not he/she is such a victim.




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