Everything To Know About The UK Immigration Skills Charge

Mahesh Maiya
16/02/2024

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Many firms fail to factor in the whole cost of placing the people, systems, and procedures necessary to fulfil the obligations of a licence holder, as well as the fees that must be paid for each person sponsored and Certificate of Sponsorship (CoS) granted. If you are considering applying for a sponsor licence or are already a licence holder looking to start sponsoring individuals, it’s vital you understand the costs involved and plan accordingly. 

What is an Immigration Skills Charge?

You might have to pay an additional charge when you assign a certificate of sponsorship to someone applying for a Skilled Worker or Senior or Specialist Worker visa. This is called the ‘immigration skills charge’.

You must pay the immigration skills charge if they’re applying for a visa from:

  • outside the UK to work in the UK for 6 months or more
  • inside the UK for any length of time

To close the domestic skills gap, the Immigration Skills Charge (ISC) was established on April 6, 2017, under the Immigration Skills Charge Regulations. In order to encourage firms to spend on educating and developing UK-based staff instead of employing foreign workers. The Department of Education receives the revenues collected from the ISC in order to support investments in skill development and training programmes and to close the skills gap in the domestic UK labour market.

Prior to January 1, 2021, UK companies hiring EU and EEA citizens were exempt from the Immigration Skills Charge (due to free movement). Due to the end of UK/EU free movement after Brexit, more and more companies who rely on skilled foreign workers have filed for sponsor licences since the beginning of 2021 and are thus now subject to the Immigration Skills Charge.

Who pays the Immigration Skills Charge?

The Immigration Skills Charge must be paid by the sponsor and cannot be passed to the worker through any means. The consequence of passing on the Immigration Skills Charge to the worker include the revocation of your sponsor licence.

The amount an employer needs to pay as their Immigration Skills Charge is broadly based on two factors:

  • The size and type of the organisation
  • How long the employee will work for you, based on the beginning and end dates on their Certificate of Sponsorship 

There are two types of Immigration Skills Charge:

  • ‘Large charge’ for medium or large sponsors: £1000 per sponsored worker for the first 12 months of sponsorship, plus £500 for each additional 6 months stated on Certificate of Sponsorship
  • ‘Small charge’ for Small or charitable sponsors: £364 per sponsored worker for the first 12 months of sponsorship, plus £182 for each additional 6 months stated on Certificate of Sponsorship

You can use the Immigration Skills Charge Calculator (https://isc-fee-calc.visas-immigration.service.gov.uk/start) to assess if you need to pay the Immigration Skills Charge.

When do you pay the Immigration Skills Charge?

You pay the immigration skills charge when you assign a certificate of sponsorship to the worker you wish to sponsor, unless an exemption applies. This is done via your Sponsor Management System (SMS) and the total fee amount will be computed automatically.

Exemptions for Immigration Skills Charge

You will not have to pay the charge if you’re sponsoring someone with one of the following occupation codes:

  • chemical scientists (2111)
  • biological scientists and biochemists (2112)
  • physical scientists (2113)
  • social and humanities scientists (2114)
  • natural and social science professionals not elsewhere classified (2119)
  • research and development managers (2150)
  • higher education teaching professionals (2311)
  • clergy (2444)
  • sports players (3441)
  • sports coaches, instructors or officials (3442)

You will not need to pay the charge for any of the worker’s dependants, for example their partner or child.

If you’re sponsoring someone to study in the UK and they switch to a work visa, you will not have to pay the charge if they switch to either a Skilled Worker or Senior or Specialist Worker visa and then extend their stay on the new visa.

Immigration Skills Charge Refund Eligibility

You’ll get a full refund if the worker’s visa application is:

  • refused or withdrawn
  • successful, but they do not come to work for you

You’ll get a partial refund if the worker:

  • gets less time on their visa than you sponsored them for
  • starts working for you but then changes to another sponsor
  • leaves their job before the end date on their certificate of sponsorship
  • You’ll also get a partial refund if you paid the medium or large sponsor fee when assigning the certificate, but had already notified UKVI that you’re now a small or charitable sponsor.

You usually get a refund within 90 days of:

  • telling UKVI that the worker did not come to work for you
  • the expiration date on the worker’s certificate of sponsorship, if they did not use it to apply for a visa
  • the date the worker’s visa application is refused or withdrawn
  • the date you assigned the certificate of sponsorship, if you had already notified UKVI that you became a small or charitable sponsor

How we can assist

Our team has extensive expertise in all matters relating to sponsor licence and subsequent visa processing. We can ensure all aspects are checked to ensure you don’t end up paying more than you need to. Our experience in this sector has allowed us to create various retainer packages for business who would like assistance with their ongoing sponsor duties and need expert advice regularly. This can be a very cost-effective way to manage your obligations as a sponsor instead of investing towards in-house expertise. 

Contact us to learn more about how we can help you manage your licence and adhere to your duties in the most cost-effective way. 

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