The Autumn 2026 Budget saw the Chancellor announce several changes to immigration measures, with most expected to take place during 2027. The changes are intended to support economic growth by widening access to global talent and giving employers greater flexibility in meeting their workforce needs. The changes also form part of the government’s wider aim to create a more business-friendly immigration system for highly skilled workers.
We look below at the key immigration announcements and what they could mean in practice for employers and their workforce planning.
What did the Autumn Budget say about Skilled Worker salaries?
The Government has announced that it will implement the Migration Advisory Committee’s recommendations on Skilled Worker salary requirements from spring 2027. This includes implementing lower occupation-specific salary thresholds which will change from the median back to the 25th percentile of occupational earnings, which had been the case previously. The current Skilled Worker threshold of £41,700 will also be uprated using 2026 earnings data, and will continue to be updated every year using the ONS wage inflation figures.
A further change includes a new standard discount for all new entrants. Everyone entering the specified profession will receive the same new-entrant discount, regardless of whether they are a student, graduate, trainee or PhD student. Currently applicants can benefit from discounts to the minimum required salary of between 10-30% depending on their circumstances. It is not yet clear what the standardised discount will be and while this change will simplify matters it could result in applicants no longer benefiting from the discounts currently available.
The government is also proposing to extend the visa curtailment period from 60 days to up to six months for eligible and highly skilled sponsored workers. The length of the curtailment period will depend on the Regulated Qualifications Framework level of the role, and the length of previous employment. This aims to provide Skilled Workers with more time to find new employment after leaving a job role before they are forced to potentially leave the UK.
What does this mean for employers?
The reduction in occupation-specific salary thresholds may give some employers greater flexibility when sponsoring Skilled Workers. However, this will need to be considered alongside the uprating of the general salary threshold. Employers should therefore avoid assuming that sponsorship will necessarily become cheaper across the board.
Employers must monitor the updated salary thresholds each year to ensure those they wish to sponsor continue to meet the applicable thresholds.
Employers must also ensure accurate information is stated on Certificates of Sponsorship, as including incorrect salary information can lead to revocation of the sponsor licence.
The extension of the curtailment period will be welcomed by employers, as it provides them with access to a wider pool of Skilled Workers when recruiting. It is welcome news for sponsored employees too, particularly given the potentially lengthy delays in obtaining new sponsorship. Detail is awaited on how this will work in practice and what it means for a visa holder’s right to work.
What is changing for international graduates?
The government has already committed to reducing the Graduate visa from two years in length to 18 months from 1 January 2027. However, the government has said that the Graduate visa period for graduates from “high compliance universities” with “strong labour-market outcomes” will remain at 2 years. The current rules that provide PhD graduates with a 3-year visa are not set to change. This change will create a 3-tier Graduate visa system which has the potential to cause confusion but again, will be welcome news for employers as it allows access to talent where sponsorship is not immediately required.
The government has also announced an expansion of the list of universities eligible for the High Potential Individual visa, increasing from 80 to 150 of the world’s leading universities. The annual application cap will also increase proportionately from its current limit of 8,000.
Why does this matter for employers?
The key benefit is avoiding the extensive sponsor duties that licence holders must undertake. Both the Graduate and High Potential Individual (HPI) routes allow individuals to work in the UK without the employer sponsoring them. That can make these routes particularly useful recruitment tools, especially for employers that do not hold a sponsor licence or want to delay the cost and administration of Skilled Worker sponsorship.
These changes are particularly relevant for smaller employers, start-ups, or organisations without existing sponsor licences that wish to access graduate talent without establishing the human resource systems, appointing key personnel, and implementing the monitoring and reporting infrastructure required for sponsorship. Even for organisations with sponsor licences, hiring individuals on unsponsored routes reduces the administrative burden of assigning Certificates of Sponsorship and managing ongoing sponsor responsibilities for those particular workers.
Will employer-paid sponsorship fees still be taxable benefits?
Due to the new Finance Bill 2026-27, from the 28th of October 2026, Immigration Skills Charge or Certificate of Sponsorship fees paid by the employer will no longer be treated as a taxable benefit in kind, removing a potential tax burden on sponsored employees. This provides employees with greater clarity over their net pay and may also help to reduce employers’ National Insurance costs.
What should employers do now?
- Plan ahead for recruitment changes: Assess the potential impact of the proposed Skilled Worker salary threshold changes on future recruitment plans, particularly where roles may be affected by revised going rates.
- Review graduate workforce planning: Consider how changes to the Graduate route should be managed, ensuring assessments for sponsorship are made within the correct time periods, depending on each person’s situation. This could mean that for some sponsorship decisions need to be made earlier, while others retain a 2-year reference period.
- Consider recruitment opportunities: review how the proposed six-month curtailment period could provide greater flexibility when recruiting skilled workers already in the UK.
- Assess the impact on salary concessions: Review current use of the New Entrant provisions and consider how the proposed changes to salary discounts, including the removal of the PhD discount, may affect sponsorship costs and eligibility.
- Prepare for further developments: Keep recruitment and sponsorship strategies under review as further details emerge, particularly regarding the universities eligible for the enhanced Graduate route and the implementation of the proposed changes.
The proposals discussed place greater emphasis on attracting highly skilled workers and talented international graduates to the UK, while making it easier for employers to recruit individuals with specialist skills. This reflects a broader focus on supporting businesses, improving productivity and encouraging economic growth.
How can we help?
We will keep our clients updated regarding the proposed changes and any influence they might have on the immigration landscape, but if you have any queries in the meantime, please contact one of our specialist immigration advisers.
Alex Christen
Partner
Business Immigration, Employment, Employment Investigations, Equality & Diversity, International
Alex is a Partner in our Employment and Immigration team. Alex leads the business immigration team, successfully supporting companies and individuals with immigration issues, including understandin... Read More
Alice is a Trainee Solicitor in our Employment & Immigration team. Alice completed her LLB Law degree at Cardiff University where she also undertook a professional placement year here at Capital, g... Read More
