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How the UK visa system works – the Points Based System (PBS) and expat contractors

For highly skilled workers who are not citizens of the UK or EU, a contracting career can provide them with high earning potential, a flexible lifestyle and the opportunity to be their own boss and take control of their life.

However, the UK tightly controls immigration from countries outside the eurozone and Commonwealth. So potential contractors will need to ensure they have a visa that enables them to live and work legally in the UK.

The UK agency responsible for awarding visas that allow contractors to work in the UK is the UK Border Agency (UKBA). It uses a Points Based System (PBS) to assess contractors’ suitability to be allowed to enter and work in the UK.

The Points Based System – which Tier?

Once you have established that you need a visa, you then need to decide which of five ‘tiers’ and categories are most likely to apply. These tiers were originally designed to allow workers from a wide range of backgrounds to apply for a visa to work and live in the UK, but at the time of writing many of them are closed to new applications.

However, should immigration controls in the UK ease, contractors may find the rules are relaxed. The UK Border Agency’s website should always have the latest immigration information.

The tiers, or categories, include:

  • Tier 1 High-value migrants, of which there are sub-tiers
  • Tier 2 Skilled workers
  • Tier 5 Temporary workers and youth mobility scheme
  • Other categories
  • UK ancestry for Commonwealth citizens.

The tier contractors will typically be eligible for is Tier 1 for ‘high-value migrants’, which applies to contractors who are:

  • “Recognised or have the potential to be recognised as leaders in the fields of science and the arts” (listed as Exceptional talent). To qualify, a UK learned society must endorse the contractor and there are a limited number of endorsements available at any one time
  • An entrepreneur or investor, with a substantial cash sum available to start a new business, take over an existing business or make a substantial financial investment in the UK under Tier 1 (Entrepreneur) or Tier 1 (Investor). The criteria vary slightly between the categories, but the contractor will need to have significant personal assets or funding from a UK seed fund or government grant to qualify.

The Tier 1(General) category has historically been the most appropriate tier for contractors, since the points based system was introduced in 2007, but at the time of writing this tier is closed to new applicants from outside of the UK.

Contractors who are Commonwealth citizens may also be eligible to apply for a visa to live and work in the UK under the UK ancestry route. To be eligible, the contractor must be a Commonwealth citizen, be able to financially support themselves and their family, and be able to prove that one of their grandparents was born in the UK, or on a British-registered ship or aircraft.

Points Based System (PBS) online

If a contractor is planning to apply for a visa under Tier 1, they then need to navigate the Points Based System (PBS). There is an interactive online points-based calculator tool contractors can use to establish whether they are likely to satisfy eligibility criteria and score enough points for their application to be successful.

Before they start, contractors should bear in mind the following eligibility criteria:

  • To apply as an investor, they must have either £1m of their own money held in a regulated financial institution to invest in the UK, or personal assets totalling more than £2m and £1m loaned by a UK financial institution
  • To apply as an entrepreneur, they must have at least £200,000 available to the business they are starting/planning to run, or access to £50,000 from a venture capital firm, government-endorsed seed fund or funding from a government department. A contractor must also have £2,800 in maintenance funds and be able to demonstrate their English language skills.
  • To apply as being an ‘Exceptional talent’, a contractor must meet the criteria to be endorsed by a Designated Competent Body.

If a contractor fails on any of the above criteria for the category under which they are applying, they will not score sufficient points and will not even be able to start the visa application process.

Contractors who are Commonwealth citizens may also be eligible to apply for a visa to live and work in the UK under the UK ancestry route

Documentation

In addition to scoring enough points using the UK Points Based System, contractors applying for a visa from outside the UK and EU will also need to submit supporting documentation, which can include:

  • A passport
  • Certificates of professional and academic qualifications
  • Documents to prove income, such as payslips, tax documents or bank statements
  • Birth and marriage certificates of grandparents, as required by Commonwealth citizens
  • Evidence of English language skills and UK experience
  • Proof of financial assets, as required by Tier 1 applicants.

Full details of documentation required can be found on the UK Visa service website. The site also includes application forms to download and contact details of Visa Application Centres and UK diplomatic missions that can process visa applications. If a contractor can’t supply the relevant original documents, or certified copies in some instances, then the application will be refused.

Contractors without a visa

Contractors who do not have the correct visa and are discovered working on a contract by UK authorities can be removed from the UK. Not only that, but they are also at risk of not being paid for the work they have done, plus being sued by the client for breach of contract.

However, such a situation is unlikely to arise. Because UK contracting is focused on larger companies that are bound by strict laws on the expat contractors they take on, the chances are it will be impossible for expats to find contracts unless they have the right visa and other documentation in place.

Updated: 05 March 2012

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