The new Immigration Skills Charge – what employers need to know
On 6 April 2017, the Home Office introduced a new Immigration Skills Charge (“ISC”) which is payable when an employer sponsors an employee on a Tier 2 visa. If your business holds a Tier 2 sponsor licence and is planning on sponsoring a worker on a Tier 2 visa, you will now need to consider whether the ISC is payable and select whether it is payable when you assign a certificate of sponsorship (“COS”) in the sponsor management system. You will do this by selecting the appropriate visa category and, in some cases, whether the COS is “ISC liable” or “ISC exempt”.
When will the ISC be charged?
The ISC applies to a Tier 2 worker assigned a COS on or after 6 April 2017 in the Tier 2 (General) or Tier 2 (Intra Company Transfer) routes except where one of the following exemptions applies:
- Where the worker was sponsored on either a Tier 2 (General) or Tier 2 (ICT) visa by you or another sponsor before 6 April 2017 and you are assigning a COS to them so that they can apply from inside the UK to extend their Tier 2 stay with you, or switch to your employment from a different sponsor;
- Where the worker is applying from outside the UK for a visa that is for less than 6 months – for example, if they are coming across to the UK for 4 months on a Tier 2 (ICT) visa;
- Where the worker is applying for a Tier 2 (Intra-Company Transfer) Graduate Trainee visa;
- Where the worker is a Tier 4 student who is switching inside the UK to a Tier 2 (General) visa; or
- Where the worker is being sponsored to do a PhD level role (that is, a role that falls under SOC code 2111, 2112, 2113, 2114, 2119, 2150 or 2311).
This means that the ISC will always be due where the employee is applying for their visa from outside the UK, unless they are applying for a visa that will be for less than 6 months or their role is skilled to PhD level. Conversely, under the transitional arrangements, most workers applying from inside the UK will not incur the ISC.
If the ISC is due then the COS will only be valid once the ISC is paid and the visa will only be granted once the ICS has been paid in full.
How much will it cost?
The amount of the charge depends on the size and nature of the sponsor and the length of the COS assigned. The ISC is £1,000 per person, per year unless you have charitable status or you are a small company, in which case it is £364 per person per year. So a large sponsor assigning a 5-year COS to a Tier 2 (General) applicant from outside the UK will have to pay £5,000.
When will it need to be paid?
The charge is payable at the same time that you pay to assign the COS, which is before the worker actually applies for their visa.
Can I pass the cost on to the worker?
No. The Tier 2 and 5 Guidance states that the ISC must not be passed on to the worker. Presumably this is because the Government’s stated aim in introducing the ISC was to encourage employers to recruit from the local workforce. The guidance states that the money collected will be used to “address skills gaps in the UK workforce”.
What about the Tier 2 worker’s family members?
You do not have to pay the skills charge for the worker’s dependants; you only need to pay in relation to the worker that you will be employing.
Can I get a refund if the employee leaves?
According to the Tier 2 guidance, a partial refund will be made where:
- a worker’s visa is granted for less than the period requested on the COS, e.g. where a 5-year visa was applied for but a 3-year visa is granted;
- the worker starts work for one sponsor but then voluntarily changes to another sponsor - the first sponsor will be paid for the “unused” time; or
- the worker leaves their job early, for any reason (except where their visa is curtailed for breach of their visa conditions).
The partial refund will be in made for each “unused” 6-month period of leave after the first year (which cannot be refunded).
In addition, the ISC will be refunded in full where the visa is refused, the visa application is withdrawn or the visa is granted but the worker does not start work for the sponsor.
If you have any questions on sponsoring workers under Tier 2 or applying for a work visa please do not hesitate to contact the Business Immigration team at Doyle Clayton.
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.