Short-term business visas are being requested by City of London officials.

Financial services firms in the City of London are facing spiralling costs to bring in talented employees that threaten the competitiveness of the Square Mile, according to a report by industry body TheCityUK.

The group has called for ministers to create a new short-term business visa to allow overseas staff to visit the UK. This would streamline the cost and time taken to move people around regional offices under current immigration rules. The report has been produced with the City of London Corporation, which governs the Square Mile, and EY.

The UK ended freedom of movement between the UK and EU at the start of the year. TheCityUK said that nine months after Brexit financial and related professional services firms were seeing “significant cost increases” to securing the high-skilled talent that they need to compete on the global stage.

Within UK-based financial services, about a fifth of workers are international. This rises to 42 per cent of employees in the booming fintech sector, it said.

“To stay competitive, we must have the best global talent. Without it, we will not be able to innovate in key growth areas like fintech or green finance, nor build out our international trading networks,” said Miles Celic, chief executive of TheCityUK.

He said rival cities were fighting for top talent in the EU, US and Asia. “The UK must strive harder to modernise its immigration processes, reducing the burden of red tape and increasing its flexibility and adaptiveness to business needs.”

Overseas staff visiting the UK have to apply for a work visa, even where business activities are incidental or for a very short period, which leads to administration, cost and delays. “There is no ‘middle ground’ between visitor status and a work visa,” TheCityUK said.

The strains on the visa system are expected to increase when work travel starts to pick up again after Covid-19 caused many businesses to stop all but essential overseas trips.

Seema Farazi, a partner at EY, which helped produce the report, said that post-pandemic there was also likely to be a much more agile workforce.

The group said the UK government had already made some improvements to the system but it called for further efforts to reduce administrative costs and processes for employers.

Short-term trips to the UK under intra-company transfer schemes mean additional costs, with an immigration skills charge of £1,000 per year.

TheCityUK called on ministers to negotiate an intra-company transfer route for nationals of key trade partners on a reciprocal basis.

The immigration skills charge must be paid upfront and part refunds can take many years. Meanwhile, smaller employers report that paying a large amount in advance can cause cash flow issues. The group argues that there needed to be greater flexibility in ways to pay.

TheCityUK also said the UK had not agreed reciprocal youth mobility arrangements with the EU. The group wants the UK to open these arrangements, which allow those aged 18 to 30 from countries including Australia, Canada and New Zealand to live and work in the UK for up to two years, more broadly to allow a larger pool of talent.

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