UK immigration fees face significant increase

On 13 July 2023 the government announced there would be a significant increase to immigration fees to help fund the public sector pay increases. The proposed increases will affect both sponsors and individuals, with sponsors needing to bear the additional costs in mind when considering sponsorship of non-UK nationals and individuals when making visa applications for themselves as well as any family dependants. Whilst the proposed implementation date has not been published, employers and individuals are advised to prepare for the changes without delay.

What is the proposed increase in fees?

The proposed increases are as follows:

• For all work and visit visas, the costs will increase by 15%.
  • For example, a Skilled Worker Visa application fee currently ranges from £625 to £1,423 and this will increase to £719 to £1,636, though discounted rates will still apply if your job is on the shortage occupation list.

• The Immigration Health Surcharge will increase by 66%
  • Standard rate will increase from £624 to £1,035 per year.
  • Discounted rate (applicable to students and children under 18) will increase from £470 to £776 per year.

• For all study visas, certificates of sponsorship, settlement, citizenship, wider entry clearance, leave to remain and priority services will increase by at least 20%.

The government has estimated that these changes will generate in excess of an additional £1bn in revenue.

No increase has been suggested so far in respect of the Immigration Skills Charge, being an additional charge paid by employers each time they sponsor someone applying for a Skilled Worker or Senior or Specialist Worker visa – we will keep a close eye on this!

When will the changes take place?

The government has provided no official date for these increases; however, it has been predicted that they will come into force sometime in autumn 2023. This could be as early as September and so sponsors and individuals need to consider their position carefully if they may be looking at sponsorship or visa applications in the forthcoming months.

What does this mean for you or your business?

Whether an individual on a visa, or a business sponsoring employees, these increases will add a significant cost to the process and a financial burden. Although it is difficult to make any plans without a definitive implementation date, any applications should be made as early as possible to try and avoid paying the higher fees.

Any current plans, policies and budgets for recruitment, retention, and HR should also be reviewed, to ensure that these will still be sufficient to cover your business’ needs after the fee increase. Sponsors and employers are advised to have a conversation not only with any prospective employees to ensure that they understand the cost implications of a visa before starting the process but also existing employees currently on visas, as they may not have budgeted for the increased fees. Individuals may struggle to find the funds to cover the increased fees and so it is likely we will see employers and sponsors being asked to cover, or at least provide a contribution towards, the individual’s costs. In return, this is likely to lead to more employers and sponsors looking at immigration fee clawback agreements which would require employees to repay certain immigration fees if they leave their job early.

Sponsors may decide that the increase in fees is prohibitive and therefore decide not to extend their recruitment searches overseas to fill a particular skills gap. Commenting in People Management’s article, Michael Stokes – Head of Employment & Immigration – said: “Although healthcare workers coming to the UK don’t have to pay the [Immigration Health Surcharge], those who are affected are mainly skilled workers, including those in shortage occupations identified by the Home Office and whose services our economy desperately needs”.

The higher costs may also make the prospect of working on a visa less appealing, so it would be worth considering what you currently offer to make you an employer of choice. If you are unsure what this means, our Future Workspaces report on Tackling the UK Skills Shortage would be a good place to start, as it discusses the options open to employers in terms of dealing with skills gaps and also contains a helpful section on the ways you can create a truly competitive employment proposition.