Proposed Changes to ILR: What UK Businesses Need to Know
In This Article
1. Legal Implications of a 10-Year Route to Indefinite Leave to Remain
2. Practical Challenges for Employers and Sponsored Workers
3. Uncertainty Around Implementation: No Transitional Provisions Confirmed
4. Strategic Considerations for Businesses and Visa Holders
5. Conclusion: Preparing for the Impact of ILR Reform
6. Contact Our Business Immigration Barristers
7. Frequently Asked Questions
8. Glossary
The UK government has announced plans to overhaul the immigration system by extending the standard qualifying period for Indefinite Leave to Remain (ILR) from five years to ten years. This proposed change forms part of a broader strategy to introduce a new “Earned Settlement” model, under which settlement will be positioned as a privilege earned over time through sustained economic or societal contribution, rather than an entitlement after a fixed period of lawful residence.
Although further consultation has been promised, the White Paper does not specify whether these changes will apply retrospectively, nor does it confirm what transitional provisions, if any, will be put in place. For UK businesses and sponsored visa holders, this lack of clarity raises immediate questions. In this article, we explore the potential legal implications, practical consequences, and strategic steps that may be required.
1. Legal Implications of a 10-Year Route to Indefinite Leave to Remain
At present, sponsored workers on the Skilled Worker route can qualify for ILR after five continuous years of lawful residence. ILR offers long-term stability, exemption from sponsorship obligations, and eligibility for British citizenship.
Extending the qualifying period to ten years would require migrants to remain on temporary visas for twice as long, potentially triggering multiple visa renewals. Each renewal brings additional costs, including visa application fees, Immigration Health Surcharge payments, and legal and administrative expenses. Furthermore, employers must continue to meet sponsorship duties and bear the risk of losing employees mid-way through the extended pathway.
Critically, the White Paper provides no detail on transitional arrangements. It remains unclear whether the new ten-year rule will apply only to future entrants or whether it will be imposed on individuals already on a five-year route to settlement. The absence of guidance on this point introduces a high level of legal uncertainty for migrants and their sponsoring employers.
2. Practical Challenges for Employers and Sponsored Workers
For employers, the change could complicate workforce planning and increase the cost and administrative burden of sponsoring international staff. Current models based on a five-year trajectory will need to be reconsidered, particularly for roles requiring long-term retention or specialist knowledge.
The Home Secretary announced an increase of 32% to the Immigration Skills Charge in her speech on 12th May. This money “will be invested through the Spending Review in supporting skills and training here in the UK” and will be borne by the UK employer – it is of course not possible to pass on the Immigration Skills Charge to a migrant worker.
From the perspective of international professionals, the appeal of relocating to the UK may diminish. Many globally mobile individuals assess job opportunities based not only on salary and lifestyle, but also on the ability to secure permanent residence within a reasonable timeframe. A ten-year qualifying period – particularly one introduced without transitional protections – may deter some of the very talent the UK seeks to attract.
This could be particularly disruptive in sectors such as financial services, life sciences, technology, and engineering, where international mobility is high and long-term planning is critical to business continuity.
3. Uncertainty Around Implementation: No Transitional Provisions Confirmed
The government has confirmed that further consultation will take place before any changes to ILR policy are implemented. However, the White Paper does not specify:
- When the new ten-year rule will come into effect;
- Whether the change will apply retrospectively;
- What, if any, transitional arrangements will be made for those already in the UK on a five-year pathway to settlement.
This lack of detail creates considerable difficulty for legal and HR teams advising on immigration timelines and long-term relocation strategies. It also increases the risk of misunderstanding or miscommunication with sponsored employees, many of whom may be relying on the existing five-year settlement framework.
4. Strategic Considerations for Businesses and Visa Holders
In light of this policy shift, businesses should consider taking several preparatory steps. Internal reviews of existing sponsorship arrangements may be necessary to assess potential exposure to the new rules. Forecasting visa-related costs over a longer period will also be critical, particularly for roles that typically attract international applicants.
Where employees are already eligible or close to becoming eligible for ILR under the current five-year rule, it may be prudent to prioritise settlement applications before the new policy is introduced. However, without confirmation of the implementation date or any grandfathering provisions, legal advice will be essential.
Employers should also consider alternative visa routes that offer accelerated settlement or may fall outside the scope of the new model. These may include the Global Talent visa, Innovator Founder visa, or routes available to dependents of British citizens.
5. Conclusion: Preparing for the Impact of ILR Reform
The proposed extension of the qualifying period for Indefinite Leave to Remain from five to ten years represents a significant shift in the UK’s immigration policy. While positioned as part of a broader effort to restore control and fairness to the immigration system, the policy may have unintended consequences for UK employers, international mobility, and the country’s global talent competitiveness.
Crucially, the White Paper offers no clarity on transitional provisions, leaving visa holders and sponsors in a position of legal uncertainty. Businesses would be well advised to monitor developments closely and seek expert legal advice to safeguard against disruption and ensure the continued ability to recruit and retain the talent they need.
At Richmond Chambers, we will be monitoring developments closely and will publish updates on our Knowledge Centre as further details emerge.
6. Contact Our Business Immigration Barristers
If you would like tailored legal advice on how these proposed changes may affect your business or employees, please contact our business immigration barristers to arrange a consultation. You can call us on +44 (0)203 617 9173 or complete our online enquiry form.
