Frequently asked questions about the Immigration Skills Charge

16.02.2023

As the UK continues to grapple with skills shortages and a record number of job vacancies, an increasing number of employers are turning to international recruitment to source the talent they need to grow.

A key concern for many businesses looking to recruit overseas workers under the Home Office sponsorship schemes is the cost involved.

Sponsors are required to pay various fees to the Home Office for each sponsored worker they intend to hire. One of these fees is the Immigration Skills Charge (ISC). Sponsors may be required to pay this additional fee when they assign a Certificate of Sponsorship (CoS) to someone applying for a Skilled Worker or a Senior or Specialist Worker visa.

Depending on how long you intend to sponsor the worker for, this fee can run to thousands of pounds, making it one of the most expensive ongoing elements of sponsorship. However, there are several scenarios where sponsors are exempt from paying the charge.

In January 2023, the Home Office introduced a new exemption which could represent a huge cost saving for multi-national businesses transferring EU employees to the UK for short-term assignments under the Senior or Specialist Worker route (formerly the Intra-Company Transfer route).

In this article, we address some of the most frequently asked questions about the Immigration Skills Charge, including how much it costs and the current list of exemptions.

What is the Immigration Skills Charge?

The Immigration Skills Charge is a fee levied on businesses employing skilled migrants. Sponsors are required to pay the fee for each CoS they assign, unless an exemption applies.

The charge applies to workers being sponsored under the Skilled Worker route and the Senior or Specialist Worker (Global Business Mobility) route. You must pay the 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.

How much does it cost?

The amount payable depends on the size and nature of your business and the length of time you intend to sponsor the worker for.

Medium or large sponsors must pay £1,000 for the first 12 months of employment and £500 for each additional six-month period.

Small or charitable sponsors are charged a lower rate of £364 for the first 12 months and £182 for each additional six-month period.

Who is exempt from paying the Immigration Skills Charge?

Sponsors are not required to pay the charge in the following scenarios.

When assigning a CoS to a Senior or Specialist Worker who is a national of an EU country and is being assigned to the UK by a linked EU business for no more than 36 months.
When sponsoring workers under PhD occupation codes 2111, 2112, 2113, 2114, 2119, 2150, 2311, also 2444 (Clergy), 3441 (sports players) and 3442 (sports coaches, instructors and officials).
When sponsoring a worker who is switching from a study route.
When assigning a further CoS which does not extend the date of their previous period of ISC liable permission, for example, if switching occupation code.
When sponsoring a worker who was granted Tier 2 permission prior to 6 April 2017 and that worker has continued to hold skilled worker permission and undertake a skilled role since.
When sponsoring a worker who is seeking entry clearance to the UK for less than 6 months.

Who is responsible for paying?

The Immigration Skills Charge is paid by a licensed sponsor through their Sponsor Management System (SMS) account when they assign a CoS.

The fee must be paid by the sponsoring employer and cannot be passed onto the migrant worker. According to the guidance for sponsors, the Home Office may revoke your sponsor licence if they find you have asked a worker to pay some or all of the charge, or attempted to recoup some or all of the cost from their salary.

Can I get a refund?

There are some instances where a sponsor may be entitled to a full or partial refund of the Immigration Skills Charge.

A full refund will be owed:

If the ISC was paid in error when not due.
If the CoS assigned with it is not subsequently used to support an application for entry clearance or permission to stay and expires.
If the visa application it supports is withdrawn, refused, or successful but the worker does not subsequently start work.

A partial refund will be owed:

If the sponsor has overpaid (for example, in relation to their size or charitable status, or because of assigning a further CoS that overlaps, by more than 6 months, dates already paid by the current CoS.
If the subsequent visa is granted for less time than the period requested on the CoS.
If you stop sponsoring the worker earlier than stated on the CoS (for example, due to the worker leaving employment).

Support with sponsoring skilled workers

Whether you are new to sponsorship or you have been a licenced sponsor for several years, it is crucial for businesses to remain up to date with current guidelines in order to maintain ongoing compliance.

If you have questions about compliance or any other area of sponsoring skilled workers, Smith Stone Walters would be happy to help.

To speak to a member of our immigration team, please contact us today.