UK Government Announces Planned Massive Increases in the Immigration Health Surcharge and Visa Fees
When the prime minister Rishi Sunak stood at the lectern on 13 July to announce public sector pay rises it was heralded as good news. There is a sting in the tail for visa applicants, UK business owners and ultimately consumers. To pay for public sector pay rises the government intends to raise an extra billion through an increase in the immigration health surcharge and visa fees.
In this article, our immigration solicitors look at the impact of the announcement on sponsor licence holders and those looking to recruit overseas workers as well as assess the impact on visa applicants. We also touch on inflation for consumers, a potential unintended consequence of the fee increases.
The message to sponsor licence holders and visa applicants is to act now before the fees go up.
UK Online and London-Based Immigration Solicitors
For expert immigration law advice call London-based OTS Solicitors on 0203 959 9123 or contact us online.
Immigration health surcharge fee increase
The immigration health surcharge will increase by around 66% per year. That is what we call inflation-busting!
What the immigration health surcharge increase means in real terms is a price rise from £624 to £1,035 per year. Over the life of a 3-year visa, a visa applicant (or sponsor licence holder if they pay the immigration health surcharge on behalf of a sponsored employee) will need to pay another £1,233 in immigration health surcharge fees. That is in addition to the visa fee increases.
Children and Youth Mobility Scheme applicants do not escape the immigration health surcharge price hike. Their immigration health surcharge will rise from £470 to £776 per year. If you are a skilled worker visa applicant with a partner and 2 dependent children that is a lot of extra money to find over a 3-year visa.
For sponsor licence holders, it may be time to review employment contracts to ensure that your immigration health surcharge clawback provisions are adequate. That’s because the increased immigration health surcharge is a lot to pay if your overseas recruit decides to change their sponsored employment. Protection can be written into your contract so you may want your Sponsorship Licence lawyers to check the current wording of your employment contracts.
Certificate of sponsorship fees, work visa fees and settlement fees
Immigration and nationality fees are also going to increase. The government has said work and visit visa fees will rise by 15%. Certificates of sponsorship (payable by sponsor licence holders) and indefinite leave to remain, British citizenship and entry clearance applications are reportedly going to rise by at least 20%.
The cost of student and priority service applications outside and inside the UK is going to be equalised so a visa applicant pays the same fee whether they are applying for a visa from within the UK or from overseas. The explanation for this change is to help cover the salary increase for the UK police force.
When will the fee rises come into force?
The government has not said when the fees will go up. The best advice that immigration solicitors and Sponsorship Licence lawyers can give at the moment is that if your business is ready to recruit and to allocate certificates of sponsorship or if you are ready to apply for your visa or your visa extension do so now.
Why are visa fees and the immigration health surcharge going up?
The government has said that the immigration health surcharge and visa fee rises will help fund the doctor’s pay and other public sector pay rises. The implication is that without an immigration health surcharge or visa fee rise the government would have to cut back on other NHS and public expenditures to foot the increased salary bills or raise taxes or borrow more money.
The idea behind getting migrants to pay more in immigration health surcharges and visa fees appears to be that it will help reduce inflation as taxes will not rise and government borrowing will not increase.
At OTS Solicitors we specialise in immigration law. We do not pretend to be economists or accountants but the planned rise in the immigration health surcharge and visa fees has left us scratching our heads.
The immigration health surcharge is payable by visa applicants coming to the UK for 6 months or longer. Although the charge is payable by the individual visa applicant many sponsoring employers choose to foot the bill for recruits knowing that unless they pay the charge the applicant will not be able to afford to move to the UK for work purposes or the recruit will choose to move to a country where they will not have to pay a health surcharge or where visa and settlement fees are lower.
When sponsor licence holders pay the immigration health surcharge for skilled worker visa applicants and senior or specialist worker visa applicants, they are choosing to do so because of the UK skills shortage. If they could recruit skilled workers from within the UK without needing a sponsor licence they would do so. Therefore, even with a 66% hike in the immigration health surcharge, most sponsor licence holders will still offer the recruit a ‘golden hello package’ and pay the immigration health surcharge for their overseas recruits.
Most sponsor licence holders are not multi-nationals with vast reserves. Sponsor licence holders are often SMEs, such as small construction companies, care and nursing homes, the local restaurant or hotel. Without large profit margins to pay for the increase in the immigration health surcharge and fees, UK businesses will have to pass on those costs to the end customer. For us end consumers, that may mean that the cost of the home extension or grandma’s care home fees or a birthday meal at our local restaurant just got even more expensive. Logically, we will all be asking for pay rises because our cost of living has increased. Isn’t that the inflationary pressure that the government policy of getting migrants to pay the doctor’s and public sector increased salary bills is designed to prevent?
Maybe we better stick to the day job – immigration law and avoid looking at facts and figures. However, our message for individual visa applicants and sponsor licence holders is to sort out your visa applications and recruitment now rather than delay and be hit by a 66% immigration health surcharge price hike and a 20% visa fee increase.
UK Online and London-Based Immigration Solicitors
For immigration law advice call London-based OTS Solicitors on 0203 959 9123 or contact us online.
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