Background:
On 1 January 2021, the UK’s new immigration system was introduced and with it, the Resident Labour Market Test was withdrawn from the Skilled Worker visa route (formerly known as Tier 2 (General)). The Home Office had accepted guidance that an increase in visa costs and higher salary requirements would be sufficient hurdles to assure that sponsoring a non-settled worker was much less convenient than hiring from the UK’s domestic labour market. As a result, the cost of sponsoring workers continues to increase.
On 13 July 2023, in the context of funding additional training for NHS doctors, the government announced proposals for very significant increases to immigration fees and the immigration health surcharge. Below we look at what costs are associated with sponsoring workers under the Skilled Worker visa route, what increases have been made, and what these increases could mean for companies.
Skilled Worker visa costs:
Sponsoring a worker under the Skilled Worker visa route involves payment upfront of various fees and surcharges.
- Visa fee: The visa fee is a one-off payment made to the Home Office to process a visa. At present, the visa fee for a Skilled Worker visa submitted outside the UK is £625 for a visa of 3 years or less and £1235 for a visa over 3 years and less than 5 years. The fees are slightly different where the application is made in the UK and/or where the Skilled Worker’s occupation is in shortage. The government is proposing a 15% increase of these fees, meaning that the 3 years or less visa would be £718.75 and the 3 years or more visa would cost £1420.25. The table below details how these increases would affect applications made my one applicant, an applicant and their partner and an applicant, partner and their child:
| Applicants | Length of visa | Location | Current fees | Proposed fees |
| 1: Main applicant | 3 years | In UK | £625 | £718.75 |
| Outside UK | £719 | £826.85 | ||
| 2: Main applicant and partner | 3 years | In UK | £1,250 | £1,437.50 |
| Outside UK | £1,438 | £1,653.70 | ||
| 3: Main applicant, partner and child | 3 years | In UK | £1,875 | £2,156.25 |
| Outside UK | £2,157 | £2,480.55 |
- Immigration health surcharge: The immigration health surcharge is a payment made by each applicant as a payment towards their access to the National Health Surcharge. This is a payment of £624 per year of a visa for adults and £470 per year for children under 18. The government has proposed increased fees of £1,035 per year for adults and £776 per year for children. The table below demonstrates how this increase and the increase in fees above affects the same applicants in the table above:
| Applicants | Length of visa | Location | Current fees + Immigration Health Surcharge | Proposed fees + Immigration Health Surcharge |
| 1: Main applicant | 3 years | In UK | £2,497 | £3,823.75 |
| Outside UK | £2,591 | £3,931.85 | ||
| 2: Main applicant and partner | 3 years | In UK | £4,994 | £7,647.50 |
| Outside UK | £5,182 | £7,863.70 | ||
| 3: Main applicant, partner and child | 3 years | In UK | £7,029 | £10,694.25 |
| Outside UK | £7,311 | £11,018.55 |
- Immigration skills charge: The immigration skills charge is a payment made by employers of £364 a year for a visa being sponsored by a small sponsor, or £1000 per year of a visa being sponsored by a medium or large employer. There is also a fee of £199 to pay when assigning a Certificate of Sponsorship, which is paid at the same time as the immigration skills charge. The immigration skills charge is a mandatory employer cost, meaning that it cannot be passed on to the applicant to pay. The table below illustrates the total proposed fees for sponsoring the same applications as the tables above with the addition of the immigration skills charge:
| Applicants | Length of visa | Location | Current fees + Immigration Health Surcharge + Immigration Skills Charge | Proposed fees + Immigration Health Surcharge + Immigration Skills Charge |
| 1: Main applicant | 3 years | In UK | £5,497 | £6,823.75 |
| Outside UK | £5,591 | £6,931.85 | ||
| 2: Main applicant and partner | 3 years | In UK | £7,994 | £10,647.50 |
| Outside UK | £8,182 | £10,863.70 | ||
| 3: Main applicant, partner and child | 3 years | In UK | £10,029 | £13,694.25 |
| Outside UK | £10,311 | £14,018.55 |
- Additional costs: There are also additional fees for visas to be processed faster than the 8 weeks that the Home Office recommends that most Skilled Worker visas will be processed and fees for the return of endorsed passports to home addresses for applications made outside the UK
Recommendations:
The exact date of when these fees will be increased has not yet been specified. It is typical for fees to be increased every April, but they could be introduced sooner. In anticipation of these significant increases, it is advisable to assess what assignments and hires could be brought forward. It is also worth considering company policies on the duration that the company will sponsor workers and which of the above payments can or will be made by the company or the applicant. Home Office statistics indicate that only 27% of Skilled Workers remain in the UK for five years, so companies may start sponsoring workers for shorter periods of time to reduce initial costs.
Please contact our mobility team for more information on these fee increases, or if you need support with managing your company’s visa costs.
