By Adam Haines, Employment & Business Immigration Partner at Aaron & Partners

Much attention has been paid to the recruitment challenges facing UK businesses, particularly in sectors such as care, manufacturing, engineering and construction, but less attention has been given to the increasingly complex immigration rules governing overseas workers. Since the UK left the EU, businesses have had to navigate a very different immigration landscape. As a result, many SMEs have been turning to overseas contractors and suppliers to fill skills gaps and support projects. However, a growing number may be unintentionally falling foul of immigration rules, exposing themselves to significant financial, operational and legal risks.

Part of the challenge is that many European businesses were previously used to moving staff across borders under common EU frameworks. Some continue to assume the UK operates in a similar way, particularly where workers are only being sent temporarily to deliver a contract or provide specialist services. But the UK is no longer part of that system, with UK immigration rules now applying separately and more stringently.

A common misconception is that the short-term nature of an assignment means a worker can simply enter the UK under a Standard Visitor visa – but this is where businesses can get caught out. A Standard Visitor visa is issued for specific purposes, including tourism, visiting family, attending meetings and participating in conferences – and it can also be used for certain limited business activities. For example, a UK business may engage a European manufacturer to install or dismantle specialist machinery, an activity likely to fall within the visitor rules. However, the key distinction is that these exemptions are designed to facilitate specific business activities linked to a commercial agreement, often involving specialist technical expertise. They are not intended to provide a route for businesses to bring workers into the UK to undertake general labour. It is a distinction many businesses misunderstand, leading to workers being brought into the UK to undertake activities that fall outside the scope of the visitor rules.

The fact that a worker is employed overseas does not automatically make the activity lawful, nor does the fact they are paid overseas or only in the UK for a short period of time. What matters is the reality of the work being carried out. If an overseas specialist is attending the UK to complete a specific, permitted business activity, that may be acceptable. If, however, workers enter the UK to carry out general work tasks (such as construction, manufacturing or warehousing activities), then the position is likely to be very different.

For many SMEs, the issue arises because they are focused on solving an immediate business problem. Unlike larger organisations, they may not have specialist HR, legal or immigration support available when engaging overseas contractors or suppliers, but that can be a costly mistake. Where a business is found to be employing an individual who does not have the correct permission to work in the UK, it can face civil penalties of up to £45,000 per worker for a first breach, with higher penalties for repeat offences. Beyond financial penalties, businesses may also face practical consequences, including project delays, workforce disruption and legal costs. Furthermore, businesses with sponsor licence may also find that their licence is revoked.

Before overseas workers arrive in the UK, businesses should understand exactly what activities will be carried out, what immigration route is being relied upon and whether any claimed visitor visa exemption genuinely applies. They should also be cautious about arrangements described broadly as “technical support”, “installation”, “dismantling” or similar activities; those labels are not enough on their own. The Home Office will look at the substance of the activity being undertaken, not simply the wording used in a contract and advise that specialist advice is obtained to ensure that these arrangements can be evidenced.

The answer is not for SMEs to avoid overseas expertise altogether either. In many sectors, such as manufacturing, engineering and defence, international workers are essential for both project delivery and wider economic growth. But as labour shortages continue, and businesses increasingly look overseas, immigration compliance will only become more important. Bringing the right people into the UK is one challenge; ensuring they have the correct permission to carry out the work is another entirely. Businesses that understand that distinction will be far better placed to avoid costly mistakes that could damage both their bottom line and their reputation.