What is the UK immigration skills charge?

The Immigration Skills Charge is a fee that most UK employers must pay when sponsoring a worker under the Skilled Worker or Senior or Specialist Worker routes. The charge is paid when a Certificate of Sponsorship (CoS) is assigned and forms part of the sponsorship process.

The Immigration Skills Charge was originally introduced by the Immigration Skills Charge Regulations 2017 and later amended by The Immigration Skills Charge (Amendment) Regulations 2020. Prior to 1^st January 2021, UK businesses recruiting EU and EEA nationals did not need to pay the Immigration Skills Charge (due to free movement). Since the start of 2021, however, due to the ending of UK/EU free movement following Brexit, more and more businesses relying on skilled overseas staff have registered for sponsor licences, and hence are now required to pay the Immigration Skills Charge.

Who needs to pay the immigration skills charge?

The Immigration Skills Charge is paid by the employer when a new Certificate of Sponsorship is issued using the Home Office’s Sponsorship Management System (SMS) portal. As such, this is not a fee that can be passed on to the employee. Effective from 1 January 2025, your sponsor licence will be revoked if you recoup, or attempt to recoup, any sponsorship-related fees that your organisation is required to pay. This includes the Skilled Worker sponsor licence application fee and any associated administrative costs, the Certificate of Sponsorship (CoS) fee for a Skilled Worker, and the Immigration Skills Charge (ISC) for a Skilled Worker or a Senior or Specialist Worker.

It is important to note that the Immigration Skills Charge is only one of a number of costs your business should budget for if you are recruiting overseas staff; other sponsorship costs include:

The cost of issuing a new Certificate of Sponsorship
Any costs associated with ongoing compliance checks (many businesses use external professionals to carry out mock audits to ensure they are compliant)
Sponsor licence fees and renewals
Costs associated with putting in place systems and processes to manage your sponsor licence
Employing someone to manage the Home Office’s Sponsorship Management System (SMS) and the sponsorship process (even if this is a part-time role)

Which visa routes does the Immigration Skills Charge apply to?

The Immigration Skills Charge applies to the:

Skilled Worker visa, and;
Senior or Specialist Worker visa

The Home Office rules state that the Immigration Skills Charge is paid where an overseas worker is applying for a visa from:

Outside the UK if they intend to work in the UK for 6 months or more
Inside the UK for any length of time

UK Immigration Skills Charge exemptions

There are several scenarios under which an employer may not need to pay the Immigration Skills Charge, including for workers:

On a student visa in the UK who is switching to a Skilled Worker visa (This exemption does not apply to workers switching from the Graduate route or to dependants of students).
The sponsored worker’s dependants
In a profession with one of the following standard occupation codes (SOC):
- chemical scientists (2111)
- biological scientists (2112)
- biochemists and biomedical scientists (2113)
- physical scientists (2114)
- social and humanities scientists (2115)
- natural and social science professionals not elsewhere classified (2119)
- research and development managers (2161)
- other researchers, unspecified discipline (2162)
- higher education teaching professionals (2311)

Certain workers sponsored under the Senior or Specialist Worker route who qualify for an exemption under the UK-EU Trade and Cooperation Agreement. This generally applies where the worker is an EU national (or Latvian non-citizen passport holder), normally works for the sending business in the EU, and is being transferred to the UK for no more than 36 months.

If you are unsure if you need to pay the Immigration Skills Charge and the rate you should be paying, it is advisable to check with an immigration solicitor.

How much is the Immigration Skills Charge?

The charge is based on the size of your business and the duration of the visa, as follows:

Duration of visa	Small or charitable sponsors	Medium or large sponsors
First 12 months	£480	£1,320
Each additional 6 months	£240	£660

For instance, a small business or charity will pay £480 for the first 12 months (plus £240 per 6 months thereafter), and a medium or large company will pay £1,320 for the first 12 months (plus £660 for every 6 months thereafter).

If your worker will be in the UK for longer than 6 months but less than a year, you must pay for at least 12 months.

As the longest you can sponsor a worker for is 5 years, the most you have to pay will be:

£2,400 (5 x £480) if you are a small or charitable sponsor
£6,600 (5 x £1,320) if you are a medium or large sponsor

Is my business classed as a small or charitable sponsor?

A small sponsor is a business with:

An annual turnover is £15 million or less
Total assets are worth £7.5 million or less
50 employees or fewer

Your business will be classed as a charity if it is:

A registered charity in England or Wales
A registered charity in Scotland
A registered charity in Northern Ireland – if you’re not on the register, you must provide proof of your charitable status for tax purposes from HM Revenue and Customs (HMRC)
An excepted charity
An exempt charity
An ecclesiastical corporation established for charitable purpose

What if a sponsored worker changes jobs with the same employer?

This is a question we are commonly asked as it may appear that every time a new CoS is issued, the Immigration Skills Charge is payable, but this is not always the case. If the person you are sponsoring changes to a new role in your company with a different occupation code (from the one they were originally recruited on), they will need a new CoS, which will allow them to apply for a new work visa. If the expiry date on the new visa is the same as the expiry date on the old visa, you will have effectively already covered the charge for the period, hence no more Immigration Skills Charge is payable. If, on the other hand, the expiry date is later than the old visa, you will need to pay the Immigration Skills Charge again.

UK Immigration Skills Charge refunds

The Home Office may refund all or part of the Immigration Skills Charge in certain circumstances. A full refund will normally be issued to the sponsoring employer if:

the worker’s visa application is refused
the worker’s visa application is withdrawn
the Certificate of Sponsorship is assigned but not used in a visa application; or
the worker is granted permission but does not start working for the sponsor

A partial refund may be available where:

the worker is granted less permission than the period for which the Immigration Skills Charge was paid; or
the worker stops working for the sponsor before the end date stated on their Certificate of Sponsorship

Partial refunds are calculated based on the unused period of sponsorship and are generally paid in six-month increments. However, no refund is available for the first 12 months of sponsorship.

If a sponsor pays the higher Immigration Skills Charge rate applicable to medium or large sponsors but had already informed UKVI that it qualified as a small or charitable sponsor, UKVI will normally refund the difference.

Refunds are usually processed automatically and are typically paid within 90 days of the relevant event occurring, such as a visa refusal, withdrawal, or notification that the worker has left the sponsored role.

However, refunds are not available in certain circumstances, including where the worker changes jobs but remains sponsored by the same employer, where workers transfer to a new sponsor under TUPE or similar arrangements, where the sponsor licence becomes dormant, or where the sponsor licence is revoked.

How can Reiss Edwards help?

Reiss Edwards provide global mobility expertise to many of the world’s largest multinational organisations and many small, medium, and large employers in the UK, ensuring they always have the necessary skilled international staff where and when needed. We can assist with all aspects of your international employee sponsorship, including:

Advising on global mobility strategy
Handling all aspects of visa applications
Handling sponsor licence applications
Advising on sponsorship systems, processes, and procedures
Carrying out mock audits and providing advice to ensure your ongoing Home Office sponsor compliance
Overcoming application refusals
Dealing with the downgrading or revocation of sponsor licences