Preparing for EU Exit: The EU Settlement Scheme and preparing for the post-Brexit immigration system

Immigration EU Exit

The UK's immigration system is changing – from 1 January 2021 an entirely new immigration regime will come into effect.

This feature, which follows our webinar with A&L Goodbody, looks at the EU Settlement Scheme and the new immigration arrangements for 2021, setting out what businesses should do to prepare for the changes.

Current arrangements

At present EU nationals, from any member state, can freely move to other member states in order to work or study. When Britain exited the EU on 31 January 2020, the UK Government agreed a transition period with the EU during which these free movement rights would remain effective. This period lasts until 31 December 2020 and after this date the UK will introduce an entirely new immigration regime that will treat EU and non-EU citizens equally.

To date, over 3.9 million applications have been made to the Scheme in the UK, and 98% of these have been approved.

EU Settlement Scheme

EU nationals already in the UK, or who enter the UK up until 31 December 2020, who want to remain in the UK after the end of this year must apply for Settled or Pre-Settled status under the EU Settlement Scheme (the Scheme). The application deadline is 30 June 2021.

This status will preserve the rights currently enjoyed by EU nationals, including the right to work for any employer in any role.

Any EU nationals (excluding Irish nationals) who are in the UK and miss the application deadline will have no legal right to remain or work here and are likely to be subject to removal. In addition, they will be working illegally, giving rise to potential criminal and civil sanctions for their employers; including potential fines of up to £20,000 per illegal worker as well as reputational damage.

You should audit your workforce now to understand how many EU nationals you employ, and ensure that any EU national employees apply to the Scheme to preserve their right to work.

New Immigration Regime from 1 January 2021

From 1st January 2021, changes to the immigration system will introduce a new 'Skilled Worker' route of entry.

The eligibility requirements for economic migration will be more relaxed:

  • The skill level for sponsored roles will be reduced from degree level to A-Level or equivalent
  • The requirement to advertise roles before sponsoring a migrant will be completely dropped
  • There will no longer be a cap on the number of immigration applications per year.

Employers who currently employ non-EU nationals will find the new regime much easier to navigate, however, the end of free movement will present significant challenges for businesses that rely on recruitment of EU nationals.

There will be no general low-skilled or temporary work route and there will be a significant cost attached to sponsoring migrants to enter the UK.

How will the new points based system work?

Under the new system migrant nationals wanting to work in the UK will have to meet a number of key criteria.

They will need to show that:

  • They have a job offer from a Home Office licensed sponsor.
  • The job offer is at the required skill level: RQF 3 or above (A Level or equivalent).
  • They can speak English.
  • The job has a minimum salary of £25,600 (or the "going rate" for the occupation, whichever is higher). If they will not earn more than the required minimum salary, they may be granted entry on the basis that they work in a specific shortage occupation and will earn at least £20,480.

Each of the criterion has a weighted score. An applicant must score 70 points or more to be eligible for a visa.

How do I become a Licensed Sponsor?

If you plan to recruit EEA workers in 2021 and are not an existing Tier 2 sponsor, you will need to apply to the Home Office for a sponsorship licence over the coming months.

To avoid delays in recruitment plans, it is important that you consider taking steps now to secure a sponsorship licence before the end of the year.


Alongside the cost and administrative burden of obtaining a sponsorship licence, the current costs of sponsorship per worker will remain unchanged, with the exception of the immigration health surcharge which will increase.

The current costs are as follows:

  • £199 sponsorship charge;
  • £1,000 p/a immigration skills charge;
  • £464 - £1,408 visa fee; and
  • £624 p/a immigration health surcharge

Visa fees and the immigration health surcharge will also be payable in respect of dependents.

Next Steps for Employers

These changes represent the biggest upheaval in UK immigration law in living memory. It is important you get familiar with the new system now and urgently consider the impact on recruitment plans. You may need to seek specialist legal advice where required.

If you anticipate that you may need to recruit from outside of the UK in the future or have EU nationals in your workplace already, it is vital that you consider the following:

  • How will the changes to the immigration system affect your business and access to labour? Will the typical roles you recruit for qualify under the new system?
  • Apply for a Sponsorship Licence if you do not currently have one. If you have a licence in place it is likely you will need to use it more frequently from January 2021 and you should conduct a 'health check' of your HR processes to ensure you are complying with your sponsor obligations.
  • Plan for the increased cost and time involved in recruitment of migrant workers from January 2021.
  • Audit your existing workforce to identify any EU nationals that will need to secure their right to work under the EU Settlement Scheme. Communicate effectively with affected staff and provide support where this is required.
  • Where possible, complete the recruitment of any EEA or Swiss nationals before 31 December and ensure they apply under the EU Settlement Scheme in advance of the deadline.