Immigration Rules Update on the Immigration Skills Charge

Posted onDecember 9, 2022

The government has amended the 2017 immigration skills charge regulations. The changes come into force on 1 January 2023 so immigration solicitors say businesses with sponsor licences need to be aware of the developments.

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For advice on immigration law call the immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

Immigration skills charge rule changes

The immigration skills charge rule changes are positive news for UK business owners with sponsor licences because the new regulations provide an updated list of payment exemptions, meaning more businesses will not have to pay the immigration skills charge when sponsoring an overseas worker.

The rule change means sponsor licence holders who recruit EU citizens to work in the UK under some visa routes will not have to pay the immigration skills charge.

The new exemption from immigration skills charge payment applies to:

Scale-up visa recruits
Senior or specialist worker visa transfers under the global business mobility visa route if they fall within the EU-UK Trade and Cooperation Agreement 2020

If a business is transferring an employee to the UK on a senior or specialist worker visa then with effect from 1 January 2023 the immigration skills charge will not be payable if:

The worker is an EU national (or a Latvian non-citizen) and
The employee is being transferred to work in the UK from an EU business for under 3 years

The exemption does not apply to EEA or Swiss nationals. That means the immigration skills charge still needs to be paid if the transferring employee who is applying for a senior or specialist worker visa is from Iceland, Norway, Liechtenstein or Switzerland.

The cost of the immigration skills charge

The immigration skills charge is payable by the sponsoring employer and not by the work visa applicant. The charge is based on each individual overseas job recruit so the more a business is reliant on overseas labour the higher the overall immigration skills charge overhead. However, the amount of the immigration skills charge for each work visa applicant depends on whether the sponsor licence holder is classed as a small or large organization.

The current immigration skills charge fees are:

£364 per year for sponsor licence businesses that are classed as small
£1,000 per year for sponsor licence businesses that are classed as large

The fees are payable per year so the longer the visa period the more a sponsor has to find upfront to pay the immigration skills charge. This can be a challenge for SMEs struggling with overhead costs.

The idea is that the immigration skills charge fees are earmarked by the government to help train workers in the UK so that in the mid to long term UK businesses will not need to recruit from overseas because there will be sufficient suitably trained British and settled workers available to recruit.

Sponsorship Licence lawyers understand that London restaurant owners and construction businesses want solutions now rather than await for trained suitable workers to be available to meet the UK recruitment crisis. For large employers recruiting an overseas worker on a 5-year visa, the upfront immigration skills charge is £5,000. For small employers, the 5-year visa upfront immigration skills charge is £1,820. If a sponsored worker either does not secure a skilled worker visa, fails to start their employment, or leaves their employment early (for example, because they are made redundant, decide to return home or get new employment with a new sponsoring employer) the sponsor licence holder can request a refund of a proportion of the immigration skills charge from the Home Office.

Are there other exemptions to sponsors paying the immigration skills charge?

For businesses recruiting overseas workers on a skilled worker visa or transferring existing employees to their UK company on a senior or specialist worker visa, there are some additional exemptions to the immigration skills charge. They are:

Workers allocated a certificate of sponsorship before 6 April 2017
Workers who are switching into a senior or specialist worker visa or skilled worker visa (or if their visa is subsequently extended provided the worker will be continuing in the same job role)
Skilled workers with jobs that have the following standard occupational classification codes:
- Chemical scientists (2111)
- Biological scientists or biochemists (2112)
- Physical scientists (2113)
- Social and humanities scientists (2114)
- Natural and social science professionals not elsewhere classified in the job list (2119)
- Research and development managers (2150)
- Higher education teaching professionals (2311)
- Clergy (2444)
- Sports players (3441)
- Sports coaches, instructors, and officials (3442)

If a sponsored worker is bringing dependants with them on dependant visas a sponsoring employer does not need to pay an immigration skills charge for each dependant visa applicant.

Immigration skills charge key points

Sponsorship Licence lawyers emphasise that where the immigration skills charge is payable a business cannot:

Pass on the cost of the immigration skills charge to the sponsored recruit. For example, by asking for reimbursement or deducting the charge from the sponsored employee’s salary
Not pay the immigration skills charge in full up front as if a business fails to pay the immigration skills charge, then the recruit will not be able to secure their skilled worker visa or senior or specialist worker visa

If your business has questions about the immigration skills charge or sponsor licence management then our Sponsorship Licence lawyers can help. We provide comprehensive business immigration advice on:

Sponsor licence applications and renewals
Hiring overseas workers and advice on visa options to suit your business needs. For example, if the new scale-up visa better meets your recruitment needs rather than the skilled worker visa or whether the graduate visa is a suitable option
Eligibility criteria for the skilled worker visa and senior or specialist worker visa, including minimum salary thresholds and skill levels
Allocation of certificates of sponsorship
Right-to-work checks
Employment law issues for sponsored staff
Sponsor licence compliance visits and audits
Sponsor licence suspensions or revocation
Sponsor licence management services

UK Online and London-Based Immigration Solicitors

For advice on immigration law call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

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