To employ nationals of the European Economic Area (EEA) and Switzerland under a Tier 2 visa, employers are liable to pay the Immigration Skills Charge (ISC) for each Tier 2 worker they sponsor.
Under the Immigration Skills Charge Regulations 2017, a sponsor of a non-EEA skilled migrant worker must pay the Immigration Skills Charge “each time it assigns a Certificate of Sponsorship to a skilled worker”.
How much is the Immigration Skills Charge?
For a medium or large sized business, the ISC is currently set at £1,000 per Tier 2 employee for 12 months or less. For each additional 6 months, you will be required to pay £500.
For smaller businesses or charitable organisations – those with an annual turnover of £10.2 million or less, or fewer than 50 employees – the Immigration Skills Charge is set at a lower rate of £364 for the first 12 months, followed by £182 for subsequent 6 month periods of employment.
If the worker will be in the UK for longer than 6 months but less than a year, you must pay for the first full 12 month period.
Since the Tier 2 visa I capped at 5 years, this means the maximum payable for medium to large employers is £5000, or for smaller businesses or charities, the maximum amount is £1820.
When is the Immigration Skills Charge payable?
The ISC applies, subject to limited exemptions, where an employer is hiring a skilled non-EEA migrant worker under one of the following PBS visa routes:
- Tier 2 (General) visa – this category enables employers to recruit non-EEA nationals to fill jobs that cannot be filled by a suitably qualified or skilled settled worker.
- Tier 2 (Intra-Company Transfer) – this category enables employers to transfer existing employees who are non-EEA nationals to a UK branch.
The Immigration Skills Charge becomes payable once you have assigned the Certificate of Sponsorship to the Tier 2 worker. The charge will need to be paid before the worker’s visa application will be processed by UKVI.
Are there any exemptions to the Immigration Skills Charge?
There are limited exemptions to the Immigration Skills Charge.
You will not be liable to for the Immigration Skills Charge if you are sponsoring an employee under any other Tier 2 category of visa, including:
- Tier 4 Students switching to a Tier 2 (General) visa
- Tier 2 (Intra-company Transfer) Graduate Trainee visa
- Roles with a PhD-level standard occupational classification (SOC) code
You will also be exempt from paying the Immigration Skills Charge where the worker will be coming to the UK for a period of less than 6 months.
The skills charge also only applies to a Tier 2 worker assigned a certificate of sponsorship on or after the 6 April 2017 in the Tier 2 (General) or (Intra- Company Transfer) routes.
What happens if I don’t pay?
In the event that you assign a Certificate of Sponsorship but fail to pay the Immigration Skills Charge, the certificate will be rendered invalid for as long as that payment obligation remains outstanding.
When you assign a Certificate of Sponsorship to the worker, you must pay the ISC in full and as one payment. Failure to comply could risk delay with the applicant’s Tier 2 visa application at the Home Office.
You should receive a payment reminder from UKVI for the charge. If you fail to settle the full charge within 10 working days of the first formal reminder, the visa application will be refused.
Can I pass on the Charge to the sponsored worker?
The Home Office guidance relating to Tier 2 sponsorship states that the Immigration Skills Charge must not be passed on to the sponsored worker.
Does the Charge extend to Tier 2 dependants?
No, the skills charge is not payable for any dependants of Tier 2 workers seeking leave to remain in the UK.
Can I get a refund on the Immigration Skills Charge?
In limited circumstances, you may be able to apply for a refund on the Immigration Skills Charge.
If the worker’s Tier 2 visa application is refused by the Home Office, or withdrawn by the applicant, you may be eligible for a refund. Similarly if the worker does not take up employment with you, you can also get a full refund.
Partial refunds may also be available where the worker starts working for you but then changes to another sponsor; is granted less time on their visa than you sponsored them for; or leaves their job at your organisation before the end date on their Certificate of Sponsorship
Are there any other costs involved when hiring a Tier 2 worker?
In addition to the Immigration Skills Charge, there are various other costs you will be liable for each worker you sponsor under the Tier 2 route. These include the following:
- Tier 2 sponsorship licence application fee. The fee for medium or large sponsors is currently £1,476, while the fee for small or charitable sponsors is £536.
- Certificate of Sponsorship issuance fee. £199 per sponsored worker.
- Tier 2 visa fee: £610.
Fees are subject to change and you are advised to check the most recent rates at the time of making any applications.
Other costs to consider including relocation and legal costs and the Immigration Health Surcharge.
Do you have a question about the Immigration Skills Charge?
DavidsonMorris are specialists in UK immigration, working closely with businesses to provide guidance and support with UK immigration compliance and Home Office applications such as sponsor licences and Tier 2 visas. We can advise on whether you are liable to pay the Immigration Skills Charge, the amount you will need to pay and the process for settling your liability.
Taken together, all of the costs involved in sponsoring a migrant worker can be substantial, compounding the resources, skills and attention required to meet your ongoing compliance duties as a sponsor. Failure to meet these duties will put your sponsorship licence may be at risk of suspension of revocation – which will impact your ability to continue to hire points-based workers and could curtail your PBS workers’ visas.
Contact us if you have a question about the Immigration Skills Charge.