Business immigration updates for employers | January 2026

This month's update includes an important reminder to engage with the government's consultation on major proposed changes to Indefinite Leave to Remain (ILR) ahead of the 12 February 2026 deadline. In addition, we provide an overview of recent key reports and announcements, including the Home Office's report on illegal working enforcement which has significantly increased since Labour came into power last summer.

Reminder to engage with the Government's consultation on the "earned settlement" approach to ILR before the deadline on 12 February 2026

Employers, sponsors and individuals are strongly encouraged to engage with the Government's consultation on its proposed "earned settlement" approach to indefinite leave to remain applications before the deadline on 12 February 2026.  Currently, someone who holds a Skilled Worker visa must complete five years in the UK to qualify for ILR, or permanent residence. The government is consulting on changing this to a ten-year path, and in some cases, it may be even longer. The changes could have significant implications for the duration that employers may need to sponsor workers, where previously employers could sponsor for five years whereupon the individual would then become eligible for ILR.    

Home Office reports 77% increase in immigration enforcement raids

The Home Office has reported that its Immigration Enforcement teams have undertaken a record number of arrests and raids relating to illegal working. The latest figures show a 77% increase in raids since the Labour government came into power. Over 17,400 raids were made to nail bars, car washes, barbers and takeaway shops. However, raids have also covered a range of sectors including restaurants and construction sites.

The increase reflects the government's focus on tackling illegal working, which is set to continue with the introduction of the Border Security, Asylum and Immigration Act 2025 which will extend the scope of the right to work regime (to include covering gig economy workers, self-employed contractors and service providers matched through online job matching platforms) and expand liability for an illegal working civil penalty. We encourage employers to get in touch if they require advice on right to work checks, including when planning for the expanded illegal working regime's implementation in 2026.

Migration Observatory assessment of Labour’s migration pledges

The Migration Observatory has published an assessment of the government's progress on six migration pledges, finding sharp falls in net migration and work visas. The main point of interest for sponsors is that Skilled Worker visas fell 55% to around 52,000 in the year to September 2025, largely due to visa restrictions introduced by the previous government which have been maintained and expanded by the Labour government. The report also noted a general decrease in net migration, which fell to an estimated 204,000 in the year ending June 2025, 78% lower than the 2023 peak.

Hong Kong and Taiwan Youth Mobility Scheme ballots to open from 10 – 12 February 2026

The Youth Mobility Scheme visa allows nationals from certain countries, who are aged between 18 and 30 or 18 to 35 depending on their nationality, with savings of at least £2,530, to live and work in the UK for up to 2 years. To apply for this visa, applicants must first be selected through a ballot system, which is free to enter.

The first ballot of the 2026 Youth Mobility Scheme will open from 10 February 2026 and close on 12 February 2026 at 00:01 for nationals of Taiwan and Hong Kong. Applicants will be informed by 27 February 2026 if they are successful in the ballot and then have 90 days to submit their application, pay the visa fee, and provide biometric information at a Visa Application Centre (VAC). They should then receive a decision on their visa within 3 weeks of attending their appointment. A second ballot is expected in the summer.

Increased focus on attracting talent to the UK

The government has outlined the next stage of the Industrial Strategy which is focussed on attracting international talent – particularly in the tech industry. The key points from the government's plan are:

• resources for the Global Talent Taskforce (a service which supports talented individuals establish roots in the UK), will double and will initially focus on international AI talent;

• reimbursement of visa fees for individuals who can further the UK's "deep tech, innovation and R&D aspirations";

• expanding the Global Talent visa and making it easier for talented individuals to obtain a visa;

• fast‑tracked sponsorship for high‑growth firms; and

• new scholarships for top maths talent.

The aim is that, by attracting top talent, the UK is "powering research and innovation that creates jobs, builds our science capabilities, attracts investment".