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Immigration Health Surcharge increase – one month to go

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On 11 October 2018, the House of Commons introduced the Immigration (Health Charge) (Amendment) Order 2018, which seeks to double the Immigration Health Surcharge (IHS) from £200 per visa applicant, per year of visa validity, to £400 per visa applicant, per year of visa validity. The increase is set to come into effect in December 2018, subject to Parliamentary approval.

This is particularly relevant to employers who provide Tier 2 sponsorship to non-EEA nationals. To minimise the impact of the IHS increase, employers should review their pipeline of new applications and in-country extensions and consider applying before the increase takes effect. To illustrate the cost savings of applying before the increase:

  • The cost saving for a single applicant, applying for a three-year visa will be £600.
  • The cost saving for a family of four, applying for a five-year visa will be £4,000.

Background

The IHS was introduced in 2015 so that non-EEA nationals who reside in the UK to work, study, or join family members for more than six months could contribute toward the NHS. To date, the IHS has generated approximately £600 million in revenue, which is distributed to the Department of Health and Social Care and the health ministries in Scotland, Wales and Northern Ireland for health spending.

A review by the Department of Health and Social Care earlier this year found that the average cost of providing NHS care to those liable to pay the surcharge is approximately £470 per person, per annum. The new IHS seeks to reflect more closely the true cost to the NHS of treating these non-EEA nationals. What employers can take from this is that further increases to the IHS may be made in the future, to align the surcharge more closely to actual cost.

Students and those on the Tier 5 Youth Mobility Scheme will continue to be entitled to discounted rates at £300 per annum.

What else can employers do?

Government fees associated with UK visa applications have increased substantially in recent years. Where employers pay these fees on behalf of their employees, they should always consider issuing a clawback letter to ensure that some or all of the cost can be recovered if the employee resigns within a specified period (usually 12-24 months).