Sponsor licence: Immigration Skills Charge
Making the decision to hire overseas nationals requires a full understanding of the implications of becoming a Home Office sponsor licence holder. Many businesses forget to calculate the additional cost burden to their business of putting in place the people, systems and processes needed to meet the duties of a licence holder, and the fees which are payable for each person sponsored and Certificate of Sponsorship (Cos) issued. In this article, we will explain how the Immigration Skills Charge works, who pays the fee, and how much it costs.
What Is The Immigration Skills Charge?
The Immigration Skills Charge (ISC) is a fee levied by the Home Office when a skilled worker is sponsored in the UK. The ISC was originally enacted in law by the Immigration Skills Charge Regulations 2017 and later amended by The Immigration Skills Charge (Amendment) Regulations 2020. The Home Office guidance states, “The charge would apply to skilled workers from outside the European Economic Area (EEA) and Switzerland who were sponsored in the UK under the Tier 2 (General) and Tier 2 Intra-Company Transfer (ICT) Long Term Staff routes since that date, and to their subsequent Tier 2, Skilled Worker or ICT leave extensions either with a new or existing sponsor. From 1 December 2020, the charge applies to applications made on the Skilled Worker or ICT routes, which have replaced the Tier 2 (General) and Tier 2 (ICT) Long-term Staff routes”. As such, if your business plans to recruit non-UK staff through the Skilled Worker and Intra-Company Transfer immigration routes, you will need to pay the ISC each time you sponsor someone.
When And How Is The ISC Paid?
The ISC is paid by the employer when a new CoS 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.
Is The ISC Payable For Every Cos Issued?
There are some exemptions that apply to the payment of the ISC. If you are hiring overseas nationals through the ICT graduate scheme, or if they are switching from a study visa to a Skilled Worker or ICT visa, you will not need to pay the ISC. Additionally, if you are sponsoring migrant workers with specific occupation codes, the ISC will not be payable; these include (the standard occupation code is in brackets):
- 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)
The ISC is also not payable for any family members who will be joining the work visa holder.
Is The ISC Payable Again If The 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 ISC 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 (to 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 ISC is payable. If, on the other hand, the expiry date is later than the old visa, you will need to pay the ISC again.
How Much Is The ISC?
The ISC fee structure is relatively simple and is based on the length of the sponsorship and the size of the organisation, as follows:
Small or charitable sponsors
First 12 months: £364
Each additional six months: £182
Medium or large sponsors
First 12 months: £1,000
Each additional six months: £500
Where the duration of the sponsorship (as written on the CoS) is between six months and a year, the employer will be charged the ISC for the full year. If you are sponsoring a worker for multiple years (up to the maximum of five years), you will need to pay the ISC for each of those years upfront; for example, a large organisation hiring an overseas worker for five years would need to pay £5,000 when issuing a CoS on the SMS portal.
Under What Circumstances Will UKVI Refund The ISC?
UKVI advise that a full refund will be issued to the sponsoring employee if the candidates work visa application is refused, withdrawn, or it is granted, but end up not coming to work for the employer.
UKVI will refund part of the ISC in certain circumstances, including where the sponsored 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
The ISC guidance also states that if you end up paying the larger ISC for a medium or large sponsor, but you have already informed UKVI that you are now a small or charitable organisation, they will refund the difference in fee. Refunds are typically issued within 90 days of being requested, the visa is rejected, or the application being withdrawn.
UK businesses planning to apply for a sponsor licence will need to take into account the overall cost of hiring an overseas worker. In addition to the cost of acquiring a sponsor licence and maintaining it, there are the costs associated with the administration of sponsored workers, in addition to the ISC and an additional fee which is payable for each CoS which is issued (£199 – this is reduced by £55 if the worker is from a country in the EU).