On January 11 2016 the Home Office announced fee changes for 2016/2017 for visa, immigration and nationality applications. An annual fee increase around April is a common occurrence. However, this year the increase took effect from March 18 2016 and includes the introduction of a new levy – the immigration skills charge – from April 2017.

Immigration skills charge and extension of immigration health surcharge

In addition to visa application fees, the Home Office will levy the immigration skills charge on Tier 2 employers at a rate of £1,000 per person per year from April 2017, with a rate of £364 for smaller businesses and charities and an exemption for PhD occupations, Tier 2 (Intra-company Transfer) graduate trainees and Tier 4 students switching to Tier 2. Payment will be due before the visa application is processed.

The immigration health surcharge is due to be rolled out to include Tier 2 (Intra-company Transfer) migrants and Australian and New Zealand nationals. This charge was introduced on April 6 2015 and is calculated at £200 per year or £150 per year for students for each year of the visa applied for.

Sponsored workers

The application fees for sponsored workers has increased by 2%. Despite this, there has been a 321% increase in the overall cost as a result of the introduction of the immigration skills charge. The below table illustrates the previous and new fees for a Tier 2 (General) or Tier 2 (Intra-company Transfer) long-term migrant applying for a three-year visa.

Click here to view table.

Indefinite leave to remain and naturalisation

The fee for a settlement application has increased by 25%, from £1,500 to £1,875. The Home Office justifies the increase by claiming that "[t]hese products deliver the most benefits to successful applicants, for example... full access to free healthcare and other public services, and unrestricted access to the labour market".

Application fees to naturalise as a UK citizen are increasing by 23%, from £1,005 to £1,236. The Home Office offered the same rationale for this increase, stating that this type of application would offer a successful applicant the opportunity to apply for a UK passport, which in turn would facilitate further long-term economic benefits.

Other changes

Further changes to fees include the introduction of a £25 processing fee for invalid applications. Previously, invalid applications were returned to an applicant at no additional cost and the full application fee was refunded.

The fee for submitting an administrative review has also increased from £80 to £84. However, the full fee is refunded if the application is successful.

The increase in fees alone may not adversely affect an employer's decision to proceed with recruiting a migrant worker. However, the combination of the application fee, the immigration health surcharge and the new immigration skills charge may make companies consider the long-term financial commitment to recruiting migrant workers in a different light.

For further information on this topic please contact Ben Sheldrick at Magrath LLP by telephone (+44 20 7495 3003) or email (ben.sheldrick@magrath.co.uk). The Magrath LLP website can be accessed at www.magrath.co.uk.

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