From 1 January 2021, the freedom of people to move between the UK and EU countries will end and the UK will introduce a new immigration system that will treat all applicants equally, regardless of what country they come from (except Irish citizens who are exempt from immigration rules, due to the pre-existing Common Travel Area arrangements).

From this date, all non-British/Irish nationals will require a valid immigration status/visa to live, work, and study in the UK.

This will not apply to EEA (European Economic Area) or Swiss citizens you already employ, who lived in the UK prior to 2021, and who have been accepted to the EU Settlement Scheme (EUSS). EEA citizens must apply to the EUSS by the 30th June 2021 to preserve their right to live and work in the UK from 2021, unless they have ‘reasonable grounds’ to apply late

The Government have created an Employer Toolkit to help Employers support EU citizens to apply to stay in the UK.

In a survey by campaign group the3million, at the end of October 2020, only 14% of companies said they were clear on the new rules from 31st December 2020. So here we look at the details you need to know.

Please note: The government is continually refining the immigration system and rules. The information in this Guide is correct as of December2024.

This article includes:

• Sponsor licences
• Details of the EU Settlement Scheme (EUSS)
• Settled Status for EEA nationals living in the UK before 31st December 2020
• How do employers get a sponsor licence?
• More information on Skilled workers
• How much are visas and the immigration health charge?
• More information on Intra-company transfers
• Low Skilled Workers
• Frontier Workers
• Other immigration routes into the UK
• Visas that allow the holder to work in the UK without a sponsor
• Checking new employees right to work

Sponsor licences and visa documents

From 1st January, employers will need a sponsor licence to employ anyone new they wish to recruit from outside the UK (excluding Irish citizens). All Job Seekers/workers from outside the UK (excluding Irish citizens) will need a valid visa before they can travel to the UK, if they intend to live, work, or study in the UK.

Employers will be subject to a Civil Penalty if they are found to be employing illegal workers. The starting point for the calculation of the civil penalty is £60,000 from the beginning of 2024.

In March 2021 (updated October 2024), the Government published a guide for sponsors, about the documents they need to keep, which you can see here.

The previous and current Governments intended that physical documents (proving the right to work and live in the UK, such as the biometric resident permit) would no longer be valid after 31st December 2024, and would be replaced by eVisas. EVisas have been issued for several years now - including to those living in the UK under the EU Settlement Scheme. However, in early December 2024 the Labour Government postponed the shift to the full eVisa system after concerns that some UK residents had failed to gain access to the new digital immigration system, and may not be allowed to return back to the UK if they go abroad over Christmas/New Year. So, the Immigration and Citizenship Minister, Seema Malhotra announced that physical documents would be accepted as valid permission to travel until 31st March 2025 (this date will be kept under review).

Details of the EU Settlement Schemes (EUSS)

Employers can view EU workers’ right to work in the UK status, issued under the EU Settlement Scheme here.

The Government issued guidance on making late applications to the EU Settlement Scheme at the beginning of April 2021.

Pre-Settled Status for EEA nationals living in the UK before 31st December 2020

This is valid for five years but will lapse if the individual is absent from the UK for two consecutive years,, and will lapse if the individual does not reapply for settled status after 5 years (which means individuals would lose their right to work, rent property or access services in the UK; and could face deportation).

However, in December 2022, the High Court ruled that the requirements of the EU 'pre-settled' status scheme, for individuals to re-apply to get 'settled' status after 5 years, is unlawful because it requires them to re-apply to upgrade their settlement status. The Government initially said they would appeal this decision, however, in February 2023 it decided not to and the guidance for the EUSS will need to be amended in line with this ruling.   In August 2023 the Government announced that from September 2023 anyone who holds pre-settled status will receive an automatic two-year extension without needing to make a further application.

In addition, from 2024 anyone who has lived continuously in the UK with Pre-Settled Status for more than 5 years, will automatically convert to Settled Status.

Settled Status for EEA nationals living in the UK before 31st December 2020

This is available if people spent a continuous period of five years in the UK (with no more than six months absence in any 12 month period; there are a few exceptions where longer absences are allowed).

How do employers get a sponsor licence?

Step one: You need to check your business is eligible.

To get a licence, you cannot have unspent criminal convictions for immigration offences or certain other crimes, such as fraud or money laundering.

Step two: Choose the type of licence you want to apply for.

The most common licences are a 'Worker' licence and a 'Temporary Worker' licence - you can apply for a licence covering either tier or both.

• A 'Worker' licence allows you to sponsor people in different types of skilled employment for varying lengths of time.  The most common licences are a Skilled Worker Visa and a Health Care Worker Visa.
• A 'Temporary Worker' licence allows you to sponsor people on a temporary basis (including for voluntary work and job-shadowing).  This includes a Creative Workers visa (for up to 2 years stay), a Graduate Trainee visa, a Secondment Worker visa, and Seasonal Worker visas (see later).

Step three: Decide who will manage the sponsorship within your business, and who will use the sponsorship management system (SMS).

Step four: Apply and pay a sponsorship fee.

UK Visa and Immigration may need to visit your business before your application is confirmed.

Fees are between £536 and £1,476 depending on the type and size of your business. You can read current information here. 

It’s estimated that sponsoring an individual skilled worker (without dependents) for five years can cost between £6-8k (including fees for the licence, sponsorship certificate, visa application, immigration skills charge [Employers may need to pay between £364 - £1,000 per skilled worker for the first 12 months], the immigration health charge [for visas over six months], and any legal advice you need to take).

Step five: What happens after you apply.

You’ll be given a licence rating if your application is successful. You’ll get an A-rated licence if your application is approved which lets you start assigning certificates of sponsorship to job seekers.

It can take up to 8 weeks to receive a Sponsor Licence.

Your A-rated licence may be downgraded to a B-rating at a later stage if you do not continue to meet your sponsor duties.

If this happens, you will not be able to issue new certificates of sponsorship until you’ve made improvements and upgraded back to an A-rating (after paying a fee). You’ll still be able to issue certificates to workers you already employ who want to extend, or who are switching from a Work Permit.

You must assign a certificate of sponsorship to each foreign worker you employ, which will cost you £239 per employee (or £25 for a temporary worker). This is an electronic record, not a physical document. Each certificate has its own number, which a worker can use to apply for a visa.

How much is  the immigration health charge (that workers, or their employers, must pay)?

Immigration health charges, often paid for by the worker, are £1,035 per year from 16th January 2024.  

Intra-company transfers (now called Global Business Mobility visa)

If you want to transfer a worker from a part of your business overseas to work for you in the UK, they can apply for the Global Business Mobility  route. Applicants will need to be existing workers who will undertake roles that meet the skills and salary thresholds.

Permission for workers transferred to the UK on the Global Business Mobility  route is temporary. Workers can be assigned to the UK multiple times, but they cannot stay in the UK for more than five years in any six-year period.

Global Business Mobility routes are for (details here):

• Graduate Trainess
• Senior or Specialist Workers
• Secondment Workers
• Service Suppliers

Low Skilled Workers

There will be no visa route for low skilled roles, i.e. these below the RQF3 skill level (A level equivalent), which are usually roles in agriculture, retail, manufacturing, and haulage, for example.

There will be sector specific seasonal visa programmes such as the Seasonal  Workers programme (which will give time limited visas within a quota system).

Frontier Workers

If you are an EU, EEA or Swiss Citizen who is employed or self-employed in the UK, but you are not primarily resident in the UK, then you are a Frontier Worker.   'Not primarily resident' means that you have been in the UK for less than 180 days in the 12 months prior to making an application for frontier worker status, or, you have returned to your country of residence at least once in the last 6 months, or twice in the last 12 months before making an application (unless there are exceptional reasons).

On 10th December 2020 the Government launched the Frontier Worker Permit Scheme. Individuals who were employed or self-employed in the UK as a frontier worker before the end of December 2020 may be eligible for a frontier worker permit which will enable them to continue to do this.  You can use your permit to enter the UK as a frontier worker and show your right to work, rent and access benefits and services, including NHS healthcare, if you meet the relevant eligibility requirements.

There is no fee to apply for the permit, and you do not have to pay the immigration health surcharge.  The permit will last for 5 years if you are an employed worker, and for 2 years if you are self-employed.  The permit will not provide leave to enter or remain in the UK.

People who start working in the UK for the first time after 1st January 2021 will not be eligible for a Frontier Worker permit, and you will need to apply to work in the UK under the new points-based immigration system.

The government guidance is here.

Other immigration routes into the UK

A full list of worker routes can be read in the points-based system introduction for employers document.

Visiting the UK after 1st January 2021 for non British/Irish nationals

Visitors (including EU/EEA nationals) are able to come to the UK for 180 days at any one time to attend meetings, interviews, conferences, gather information for their work, give and receive training, holiday, and do some short-term studies, without needing a visa. You  can see the  visitor rules here.

Visitors should not undertake any work or long-term study using this route as only limited business or work activities are allowed (as above). Therefore, this visitor route cannot be used for work placements or internships.

Visitors from certain countries – e.g. China, India, South Africa – need to get a ‘visitor visa’ before they arrive in the UK.

UK Ancestry

UK ancestry applies to Commonwealth citizens with a grandparent born in the UK who intend to come to the UK to work.

Students

Students must be sponsored by a Higher Education Institute or School who hold a sponsor licence to study in the UK. EEA nationals will be included in this category if they arrive in the UK from 1st January 2021.

Graduate route

The Graduate Visa will be available to international students who have completed a degree in the UK from 1st July 2021. This will enable international students to remain in the UK and work at any skill level for two years after they have completed their studies. It will be an un-sponsored route.

International students who complete a PhD from summer 2021 can stay in the UK for three years after study to live and work. 

Visas that allow the holder to work in the UK without a sponsor

Global Talent

The Global Talent route (which has replaced the Tier 1 system) is designed to attract recognised global leaders and promising individuals in academia, research, , the arts and digital technology.

This will be extended to EEA nationals from 1st January 2021. Individuals will be granted permission to work without restriction if they’re endorsed by a specialist endorsing body and have adequate English language skills. An employer will not need to be a Home Office licensed visa sponsor to employ a migrant under the Global Talent route.

Youth Mobility Scheme

The Youth Mobility Scheme will enable around 20,000 young people (aged 18 to 30 years old) to come to the UK to work and travel each year. At the moment young people from Australia, Canada, Hong Kong, New Zealand and other countries use this scheme which allows unrestricted work. This will apply to EEA nationals on a reciprocal basis with their individual EU country after January 2021.

High Potential Individual Visa

On 30th May 2022 this new visa route opened.  This is for graduates of certain top overseas universities (Harvard, MIT, Kyoto University for example), who want to work or look for work in the UK after completion of their degree.  Applicants for the visa must have completed a bachelor’s degree or PHD from a recognised university in the last 5 years.  The individual needs to make their own visa application, an Employer will not need to sponsor the individual.  Those individuals with a bachelor’s degree will get a 2 year visa; those with a PhD will get a 3 year visa. At the end of the 2 or 3 years individuals can apply for another vis to continue their employment in the UK.

Checking new employees right to work

You’ll still need to check that all new employees have a right to work in the UK before they start work.

After 1st July 2021, employers must ask new EEA employees for proof of their immigration status – which will either be under the EU Settlement Scheme or via the new immigration system.  

The Government updated their Right to Work Checks, an Employers Guide on 13th November 2024.

EEA nationals who have applied for their immigration status under the EU Settlement Scheme (EUSS) will not have a physical document to prove their status. Their status will need to be verified online by the employer.

If an employee has a time limited right to work in the UK, Employers must carry out a further check around the time of the expiry of the employees current visa.  If an employee needs to extend their working visa and has made an application to extend this, they will continue to have the right to work in the UK until a decision on their application is made - but Employers should ask to see a copy of their application etc.

Freelancers

Freelancers from outside the UK, including those from the EU that have not obtained pre-settled or settled status, will be unable to offer freelance services personally in the UK, unless they have a relevant work permit and an employer to sponsor them.  They can continue to work for UK companies of course, but only if they do not physically do the work in the UK.

Our Crunch advisors are only able to answer accountancy related questions. If you have an employment question, please either leave a comment below or phone the Acas Helpline on 0300 123 110.

‍If you are an employer and need ongoing professional help with any staff/freelance issues, talk to Lesley at The HR Kiosk – a Human Resources Consultancy for small creative businesses. Our fees are low to reflect the pressures on small businesses and you can hire us for as much time as you need.