The UK government has announced that application costs for UK visas will increase across the board, which will affect employers and visa applicants and their families. The purpose of the significant rise in application costs is to partly fund public sector pay awards, as the government tries to settle protracted disputes with trade unions over salary and employment terms. The government wants to raise more than £1 billion through increases to visa application fees.
We expect that exact details will be laid out in regulations in due course, but the headline changes are:
The cost of priority services will be made the same whether applicants apply inside or outside the UK.
The announcement did not cover the Immigration Skills Charge (ISC). The ISC amounts to a sponsor tax payable when employers assign a certificate of sponsorship (COS) and must be paid by sponsors rather than applicants.
Although IHS rates have been frozen for the last three years, the big rise in IHS fees will have the greatest impact on overall cost of visa applications, especially for families. Payment of the IHS is a mandatory charge that ensures that applicants have access to free healthcare in the UK through the NHS. It is still payable even if the individual never uses the NHS and even if they have their own private medical insurance cover. Even though it is calculated for each year of the visa, the whole amount is payable upfront as a lump sum at the same time as other visa fees, which makes it difficult for individuals to pay if their employer is not picking up the cost. The government announcement stated that the increase to IHS "will help to fund the pay rise for doctors".
Not everyone has to pay the IHS. Anyone applying for a work visa of more than six months must pay it, but several different types of applicants are exempt, including:
an applicant to the EU Settlement Scheme for pre-settled status or settled status.
|Current fee (GBP)
|New fee (GBP)
|Immigration Health Surcharge - adults (per year)
|Immigration Health Surcharge – children under 18 (per year)
|Skilled Worker or GBM - up to 3 years (outside UK)
|£625 per applicant (£479 for shortage occupation roles)
|£719 per applicant (£551 for shortage occupation roles) *
|Skilled Worker or GBM - 3 to 5 years (outside UK)
|£1,235 per applicant (£943 for shortage occupation roles)
|£1,421 per applicant (£1,085 for shortage occupation roles) *
|Skilled Worker or GBM - up to 3 years (inside UK)
|£719 per applicant (£479 for shortage occupation roles)
|£827 per applicant (£551 for shortage occupation roles) *
|Skilled Worker or GBM – 3 to 5 years (inside UK)
|£1,423 (£943 for shortage occupation roles)
|£1,637 (£1,085 for shortage occupation roles) *
|Certificate of Sponsorship (CoS) for Skilled Workers or Global Business Mobility (GBM): Senior or Specialist Workers
|Temporary Worker, including GAE (Interns), Creative Worker and Youth Mobility
|£259 per applicant
|£298 per applicant *
|Settlement (indefinite leave to remain)
* Estimated new fee. Exact number is TBC
There has been no announcement on timing, but the government will want to start pulling in the higher fees quickly. It remains to be seen, but it is a reasonable assumption that Parliament will review the required regulations to implement the increases after its summer recess, with fee increases taking effect in late summer or autumn 2023.
In the middle of a cost-of-living crisis, these fee rises will cause a real challenge for individuals and businesses, especially for start-ups and SMEs. What factors should employers be considering now?
Even if your business does not support employees with any visa costs, workers may start to turn to employers to see what extra support they can offer to ease personal cash flow pressures at the point of visa application. That could be through salary advances or employee loans, although tax advice should always be sought. If this isn't possible and workers are unable to pay the fees, there may then be resulting right to work and employment termination considerations.
If you would like to explore any of this further, please do get in touch with us.