Everything you want to know about the Immigration Skills Charge!
The Immigration Skills Charge (‘ISC’) was introduced, on 6 April 2017, as an additional revenue stream for the government, and to promote employment of the domestic workforce. The Home Office has been less than transparent when quizzed about how it is using this revenue. However, we understand the intention, broadly-speaking, is to use the money to develop skills in the domestic workforce. What we do know is that, when combined with minimum salary thresholds, application fees and the Immigration Health Surcharge, many employers have been left feeling the pinch.
When is the ISC payable?
Subject to certain exceptions, the ISC is payable every time a sponsor assigns a Certificate of Sponsorship (‘CoS’) to a migrant worker in the Tier 2 (General) or (Intra-Company Transfer) Long-Term Staff categories.
The ISC is not payable where the migrant worker falls under one of the following categories:
- They will be entering the UK for less than 6 months
- They will be fulfilling a PhD level role
- They will be entering the UK as a Tier 2 (ICT) Graduate Trainee
- They are an existing Tier 2 (General) or (ICT) employee and have previously been assigned a CoS, and they are not seeking to extend their period of leave
- They hold leave as a Tier 4 (General) student, and are seeking to switch into a valid working visa
- They are seeking to extend their leave and were originally assigned a CoS as a Tier 2 worker before 6 April 2017
A company with a UK sponsor licence must assign a CoS to a migrant worker it wishes to employ. The CoS is the migrant’s ‘work permit’ and confirms key information relating to the job they will be fulfilling in the UK.
Who is defined as a ‘migrant worker’ for the purposes of the ISC and CoS?
Currently all foreign nationals, excluding EEA nationals (comprising the European Union member states plus EFTA countries: Iceland, Liechtenstein, Norway) and Switzerland.
However, the UK left the European Union on 31 January 2020, and has now entered a ‘transition period’, currently scheduled to end on 31 December 2020. During this transition period, the UK’s relationship with the EU will largely remain as it previously was, with the UK continuing to benefit from free movement of persons and the European single market. However, at the end of the transition period the UK’s immigration landscape is likely to change drastically, and there is a lot of conjecture about what it will look like in future. It is likely the points-based system, which currently applies to migrant workers, will be rolled out to EEA and Swiss nationals from 1 January 2021, and so sponsors may also need to pay the ISC levy for their new EU staff.
How much is payable, and can the cost be passed to the migrant worker?
This depends on the size of the sponsoring organisation, and the length of the migrant worker’s CoS. For small or charitable sponsors the ISC fee is £364 for up to 12 months, plus £182 for each subsequent 6 month period. For all other (large) sponsors, the fee is £1000 for up to 12 months and £500 for each 6 month period after that.
The Home Office expressly forbids the sponsor passing the cost of the ISC to the migrant worker, as it would undermine one of the key objectives of the ISC in incentivising employers to look to the settled workforce to plug vacancies. If the Home Office discovers that the cost has been passed to a migrant worker, it may result in the sponsor’s licence being revoked. Therefore, if you have a standard repayment clause in your employment contracts, you cannot ask the individual to repay the ISC fee.
If you have any questions on sponsoring workers under Tier 2, or applying for a work visa, please do not hesitate to contact our Business Immigration team.
The articles published on this website, current at the date of publication, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your own circumstances should always be sought separately before taking any action.