Home Office statistics published

The Home Office has published new immigration statistics for the year ending December 2022. The statistics include immigration for work, study and family reasons, including new visa routes where these are operational. Overall, numbers of visas granted were down by 11% from pre-pandemic figures in 2019, largely due to a reduction in visitor visas. In the context of work visas:

• There were around 268,000 grants to main applicants on work visas, almost twice as many (+95%) as in 2019 due to increases in both long-term sponsored work (or ‘Worker’) visas and ‘Temporary Worker’ visas.
• Grants for ‘Skilled Worker’ and ‘Skilled Worker – Health and Care’ visas represented 86% of long-term sponsored work visas granted and over half (54%) of all work visas granted to main applicants in 2022.
• Indian nationals were the top nationality granted long-term sponsored work visas in 2022.
• The proportion of all work-related visas granted to dependants increased from 29% in 2019 to 37% in 2022.

Immigration system statistics, year ending December 2022 – GOV.UK (www.gov.uk)

MAC publishes call for evidence on Shortage Occupation List

The Migration Advisory Committee (MAC) has published a call for evidence as part of its review of the Shortage Occupation List (SOL). The deadline for responses is 26 May 2023 and it is anticipated that the MAC will publish the results of its review in June 2023.

The MAC has been asked by the Home Office to comment on:

• The minimum salary requirement for roles on the SOL.
• Which roles should continue to be included and which should be removed.
• Which jobs should be added to the SOL (including those below Regulated Qualification Framework Level 3 but only in exceptional/compelling circumstances).

The accompanying guidance document confirms that the MAC will recommend that the current SOL salary threshold discount (i.e. 20% of the going rate for occupation codes on the shortage occupation list, where this applies) be abolished. The Government is also planning to uprate salary thresholds across the Skilled Worker routes.

This means that the only occupations that will benefit from being on the SOL, and hence the only occupations that will be considered for inclusion, are those for which the occupation’s going rate falls between £20,480 and £25,600 currently (or £20,960 and £26,200 when thresholds are uprated from 12 April 2023).

Shortage Occupation List: call for evidence 2023 – GOV.UK (www.gov.uk)

MAC publishes expedited review of shortage occupations in construction and hospitality

The Migration Advisory Committee (MAC) has published its expedited report into labour shortages in the construction and hospitality sectors, following a request by the Home Secretary on 7 February 2023.

The MAC recommends five occupation codes be added to the Shortage Occupation List (SOL) in relation to the construction sector. It does not recommend any occupation be added in relation to the hospitality sector because, it says, ‘for the few hospitality occupations at skill level RQF 3-5 in-scope, we do not feel that we have sufficiently clear evidence that these specific occupations are in shortage, or, that a lower salary threshold would be sensible’.

Construction and hospitality shortage review – GOV.UK (www.gov.uk)

Seasonal Worker visa inquiry

The Chair of the Migration Advisory Committee (MAC), Professor Brian Bell, has published a letter written to the Minister of State for Immigration, Robert Jenrick, indicating that the MAC is launching an inquiry into the Seasonal Worker visa.

The inquiry will consider the rules under which the scheme operates, the size and costs of the scheme, the potential for exploitation and poor labour market practice, evidence from international comparisons and the long-run need for such a scheme.

The letter states that, ‘We have no fixed view on the merits of the scheme, but believe it is a good time to review it given that it has been in operation for a number of years.’

Letter to Immigration Minister on Seasonal Worker visa inquiry – GOV.UK (www.gov.uk)

Home Office introduces Seasonal Worker concession

The Home Office has updated its Seasonal Worker sponsor guidance, introducing a concession in relation to the ‘cooling-off’ period. The guidance states that the Home Office will ‘exceptionally permit workers to re-enter the UK five months after their 2022 leave expired, rather than having to wait for the full six months cooling off period to elapse’. This is a ‘one-off re-set’ to enable workers to return at the beginning of the 2023 harvesting season and the normal rules will apply to any leave granted for 2024 onwards.

Other changes include highlighting increases to salary levels, which come into effect for applications that are supported by a Certificate of Sponsorship issued on or after 12 April 2023 (as set out in Statement of Changes, HC 1160).

Sponsor a seasonal worker – GOV.UK (www.gov.uk)

Guidance sets out application routes not eligible for pre-licence priority service

The Home Office has updated its guidance on the pre-licence priority service, which allows employers to prioritise their application for a sponsor licence, by submitting an application by email.

The guidance confirms that the following application routes are not currently eligible for priority service: Global Business Mobility (GBM)-UK Expansion Worker, GBM-Service Supplier, GBM-Secondment Worker, Scale-up, Government Authorised Exchange, International Agreement and Seasonal Worker. The process, fees and service level agreements remain otherwise unchanged.

Pre-licence priority service guidance – GOV.UK (www.gov.uk)

How we can help

From visa applications through to settlement and obtaining citizenship, our experienced immigration lawyers can advise on the most appropriate visa route from the earliest stage, and guide and support you throughout the entire journey.

Our team includes specialists in both family and individual immigration, as well as business immigration. If you would like to discuss any of the above changes and how these may affect your business, please contact Calum Hanrahan.

Overseas / Immigration

Contact: Calum Hanrahan calum.hanrahan@shma.co.uk

We know that for many of our family business clients, if possible, there is a wish to pass on the business to the next generation and for their successors to be given the same opportunities as their predecessors.

Therefore, we take a look at some of the company law technicalities around succession planning and how to keep the business in the family.

Are shares treated differently in a family business?

Shares in a company are treated in law as private property, which the owner is free to do with as they please. There is no obligation to sell and – equally – no obligation on the other shareholders or the company to buy.  This straightforward proposition is overlaid with contractual and sometimes statutory and regulatory obligations, chief amongst which are the articles of association.

Under the model articles for private companies limited by shares, the directors may refuse to register a transfer – Model Article 26 which states ‘The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent.’

This can cause problems with succession on death unless it has been discussed and is anticipated by the will.  For instance, the remaining board members may not be happy that shares have been passed to beneficiaries who have no interest in the company and may take the opportunity to decline to register except to someone approved by them.

Shareholders agreements in family businesses

In each case, if there is a shareholders agreements in place, it will be a matter of precisely what that agreement says. However, typically they also contain clauses that will require a shareholder to offer to sell his shares in the company to the other shareholders in certain circumstances.  These will often include death, incapacity and – if they are an employee – on termination of employment.

If any of these apply, the shareholder or their attorneys or personal representatives will have to deal with the other shareholders and specifically will need to find out if any of them want to buy the shares.  In these circumstances the shareholders agreement will likely provide for valuation of the shares and it is sensible to have an eye to the relevant provisions when assessing for probate value.

If the other shareholders decide they don’t want to exercise their rights to buy, share transfers can be signed and submitted to the board for approval (as above).  If the other shareholders decide they do want to buy the shares the shareholder or their estate will receive the value of the shares, not the shares themselves.

Read our blog on whether family businesses need shareholder agreements here.

Pre-emption rights

Even if the shareholders agreement does not contain an obligation to offer for sale, where a shareholder wants to transfer their shares, pre-emption rights on transfer may apply and the personal representatives will be expected to offer the shares first to the other shareholders.  In other words, on the death of a shareholder, the personal representatives may not be obliged to offer for sale at the point of death but they may anyway be required to offer the shares to the other shareholders before being allowed to transfer them to the shareholder’s beneficiaries under the will or rules of intestacy.

How to ensure shares stay within the family

Where does this leave the shareholder who wants to leave his shares to future generations and does not want to risk that they may pass out of his family?

In this instance, the shareholder should take positive steps to ensure that:

1. There are no obligations to offer for sale on death or on leaving employment (which will of course also happen on death);
2. Transfers to family members, such as children and grandchildren, are free from pre-emption rights; and
3. The board must approve such transfers properly made.

You could go further and decide that only family members, such as direct (possibly only blood) descendants of the named founder are to be allowed to hold shares and the board is to refuse to transfer to anyone who does not qualify.

Can a shareholders agreement be amended?

A shareholders agreement can be changed by agreement of all the parties to it and articles of association can be changed by a 75% majority (unless the provisions are ‘entrenched’ in which case a higher % can be specified or class rights apply).

Therefore, for any shareholder looking to build a family legacy for generations to come, there is no guarantee that these provisions will endure forever.  Ultimately, the shareholders are likely to agree on measures to ensure the future success of the company above family ties.

What can you do now?

In conclusion, if you are making a will and want to know that the shares that you hold will pass to your beneficiaries, it is not enough simply to write them into your will.  You should give wider consideration to the other shareholders and stakeholders in the company and those that you want to transfer the shares to.

Our handy blog on succession planning provides further advice on who should be involved in the process.

Having done that, you should take legal advice on the documents governing the transfer of shares and then make any necessary changes to make sure your wishes will be followed through.

How we can help

We know that succession planning is an important and vital part of preserving your professional legacy. Wherever you are on your journey, we can help ensure that you have a viable succession strategy in place to ensure your business continues to operate as you intend.

Buying/Selling

Contact: Jody Webb  jody.webb@shma.co.uk