The 2025 Immigration year: what does your UK business need to know?

In contrast to April 2024, the Home Office has not welcomed in the 2025/26 financial year with wide reaching changes for sponsor companies and visa holders. This is partly because the government plans to release a potentially extensive Immigration White Paper in the coming months. However, a number of smaller changes have been announced which will affect all UK companies who sponsor or employ visa holders. We summarise these below.

Changes to sponsor size test

The government has announced a change to the test used to assess whether a sponsor is 'micro/small' or 'medium/large'. This is significant for businesses that hold a sponsor licence, as sponsor size determines the amount sponsors are charged for certain Home Office fees. From 6 April 2025, the test is: 

A change in sponsor size needs to be reported on the Sponsorship Management System within 20 working days.

This change has two main implications:

• Sponsor licence application fee: a lot more businesses applying for a licence will now qualify as a small sponsor and pay £574 rather than £1,579 for their licence application.
• Immigration Skills Charge (ISC): when assigning a CoS, small sponsors pay ISC at £364 per year compared to £1,000 for large sponsors. This will make visa applications significantly cheaper for a lot of sponsors.

There are a few other factors to this test which need to be reviewed on a case by case basis. If you think your business will now be categorised as a small sponsor, please do contact us and we can advise you on what you should do.

Expansion of right to work checks 

2025 brings another extension to the UK's right to work rules under which employers must check that their employees have the legal right to work for them before they start their role. The Home Office has announced here that, for the first time, these checks will be extended to companies hiring in the gig economy, on zero-hours contracts, or through subcontracting arrangements. This follows hot on the heels of an expansion in September 2024 under which guidance required employers to carry out checks on individuals who were not their direct employees, for example self-employed contractors.

Carrying out compliant right to work checks provides a defence against fines of up to £45,000 per illegal worker (£60,000 for repeat offences), business closures, director disqualifications and potential prison sentences of up to 5 years. It forms part of the government's push for 'better business' and company compliance. It also reflects increased action by Immigration Enforcement teams, who since July 2024 have carried out 6,784 illegal working visits, made 4,779 arrests, and issued 1,508 civil penalties.

There is no published start date yet for these changes. However, businesses operating in the gig economy and industries which have traditionally had flexible working models should use this time to review their processes and consider implementing changes in onboarding policies.

Extension of eVisa transition period

UK visa holders should be aware of the need since the end of 2024 to apply for an eVisa to replace their BRP cards. Please see our previous e-alert here on this. The Home Office has again extended the transition period to do this until 1 June 2025. If you or your employees have not applied for your eVisas, you should do so now to ensure easy entry to the UK in the summer holidays.

Electronic Travel Authorisation (ETA)

As the Home Office increasingly moves towards a digital immigration system, the UK's ETA system has now been expanded to include European nationals travelling to the UK from 2 April 2025. For a reminder of the system see our article here.

Expansion of prohibition on recouping sponsorship fees

The sponsor guidance has been updated to expand the prohibition on sponsors recouping certain sponsorship fees and associated administrative costs from Skilled Workers (introduced on 31 December 2024) to other visa routes. This includes attempting to recoup any part of the sponsor licence fee from a sponsored worker where that deduction is made on or after 9 April 2025 (all routes); or the CoS fee, or associated administrative costs including the Immigration Skills Charge (now including GBM routes), where the CoS is assigned on or after 9 April 2025.

The changes also clarify that if a sponsor agrees to loan a sponsored worker funds to cover other visa fees when an application is made, then any repayment agreement must not mean that the employee's salary falls below the minimum salary rates for the sponsored role. As visa fees can run into five figures for a family on long term visas, this could be a significant change for lower paid workers.

What changes could the White Paper bring?

The upcoming Immigration White Paper is expected to contain provisions to reduce legal migration, link visa sponsorship with training, and strengthen the Migration Advisory Committee. Its goal is to align immigration policy with skills development and domestic workforce needs.

Whilst this is likely to sound familiar to those aware of historic changes, the devil will always be in the detail. Given the significant reduction in net migration following the April 2024 changes (see our article on these here) the White Paper will need to balance the government's aim to continue reducing net migration alongside ensuring businesses have access to the talent they need for the future.