On 6 April 2017 the government’s new Immigration Skills Charge (ISC) came into force. The ISC is effectively a ‘tax’ on those employers with licences to sponsor overseas workers under Tier 2 of the UK’s Points-Based System. The government has stated that funds collected through the charge will be put towards skills training for the resident UK workforce.
The charge means that businesses wishing to sponsor migrant workers now need to pay an additional £1,000 per worker per year of sponsorship. The total charge must be paid upfront when a Certificate of Sponsorship is assigned. This means that a business wishing to sponsor a worker for 5 years would be required to pay £5,000 upfront.
Charities and businesses which fall under the statutory definition of a ‘small company’ are required to pay a reduced charge of £364 per worker per year. In the 5 year example given above, this would be an upfront charge of £1,820.
If the charge is not paid in full, any subsequent sponsorship of the worker concerned is likely to be deemed invalid and their Tier 2 visa application refused. Note that the Home Office does not permit sponsors to pass the costs of the charge onto the worker. Generally, the charge will apply in respect of any migrant worker who is issued a Certificate of Sponsorship under Tier 2 General or Tier 2 Intra-Company Transfer on or after 6 April 2017.
However, employers should be aware that there are some notable exemptions from the charge. For example, the charge will not apply to workers who are applying to extend their current Tier 2 visas from within the UK (with the same sponsor or a new sponsor), if they were first sponsored in that category before 6 April 2017. It will also not apply to those who are switching from Tier 4 student visas to Tier 2 General visas from within the UK. Workers who are sponsored in PhD level roles and those in the Tier 2 ICT (Graduate Trainee) category are also exempt. As regards short-term visas, the charge will not apply to workers applying for a Tier 2 visa from outside the UK of less than 6 months. However it will apply to these applications if they are made in-country.
Sponsors may receive a refund of part of the charge if a sponsored worker voluntarily leaves partway through their sponsorship to move to another sponsor, or if their role in the UK ends earlier than expected. If a sponsored worker’s visa application is refused, their application is withdrawn or they are granted a visa but never actually travel to the UK then the charge will be refunded in full. Refunds are usually processed automatically by UK Visas & Immigration.
As many employers will no doubt already be aware, the Conservative Party manifesto for the 8 June General Election stated that a Conservative government would double the cost of the charge, to £2,000 per sponsored worker per year. The manifesto stated that this would be introduced by the end of the next parliament, although it remains to be seen whether that will become a reality or not.