The Immigration Skills Charge (ISC) is a significant consideration for UK employers looking to sponsor non-UK workers under the Skilled Worker visa or other relevant visa categories. Introduced by the UK government in April 2017, the ISC is part of a broader strategy to encourage employers to invest in the domestic workforce while still allowing them to access the skills they need from abroad. This guide defines the essential details employers need to know about the charge, helping you to navigate the complexities of hiring international talent.
What is the Immigration Skills Charge?
The ISC is a levy imposed on UK employers who sponsor international skilled workers. The primary aim of the charge is to fund apprenticeship programmes and to support the development of skills within the domestic labour market. The underlying principle is that employers who rely on skilled workers from abroad should contribute to the training of the local workforce.
The ISC applies to employers who sponsor workers under the Skilled Worker or Senior or Specialist (Global Business Mobility) visa routes. It does not apply to workers on the Graduate visa or those with indefinite leave to remain in the UK.
When will I need to pay the charge?
The ISC is payable each time you sponsor a non-UK worker under the relevant visa categories. The charge is calculated based on the length of time you are sponsoring the individual for, with the fee payable upfront for the entire duration of the sponsorship.
As an employer, you will need to pay the charge at the time you assign the Certificate of Sponsorship (CoS) for the prospective employee. When planning to hire a non-UK worker, employers must factor in the cost of the ISC as part of the overall expense of sponsorship.
There are some exemptions to the ISC. For example, some PhD-level occupations are exempt, as are sponsored workers travelling to the UK for less than six months. Many international students who have studied in the UK and are switching into the Skilled Worker route from the Student route will also likely qualify for an exemption.
How much is the Immigration Skills Charge?
The amount you need to pay for the ISC depends on the size of your business and the length of the sponsorship detailed on the CoS. The charge is structured as follows:
- Medium or large employers £1,000 per year per sponsored worker.
- Small employers and charities: £364 per year per sponsored worker.
Companies can usually benefit from the lower (small employer) ISC fee if at least two of the following factors apply to them:
- Their annual turnover is £10.2 million or less
- Their total assets are worth £5.1 million or less
- They have no more than 50 employees
If you are sponsoring a worker for three years, a large employer would pay £3,000, and a small employer or charity would pay £1,092.
It’s important to note that the ISC applies per sponsored worker. If your organization sponsors multiple workers, the charge will apply to each of your sponsored workers accordingly. This can represent a significant cost, particularly for larger employers who rely heavily on international talent.
Can I pass the charge on to the employee?
No – employers cannot recoup the ISC from a sponsored worker.
Is the charge refundable?
In specific circumstances employers may be eligible for a refund, either in full or in part:
- Visa refusal, withdrawn application, or not used CoS: If the visa application is refused or withdrawn, you will receive a full refund of the ISC, as the sponsored worker will not be entering the UK labour market. A full refund will also be payable if the CoS is not used by the sponsored worker for the purposes of a visa application.
- Shorter stay than sponsored: If the sponsored worker leaves their employment before the end of the period for which you paid the ISC, you may be eligible for a partial refund for the period of time remaining on the CoS. A partial refund may also be issued if the worker receives a shorter visa than what was applied for.
- Overpaid: if the Home Office consider that a sponsor has paid too much ISC, a partial refund for the overpayment should be issued.
The Immigration Skills Charge is an important element of the UK’s immigration system, designed to balance the needs of employers for skilled workers with the need to invest in domestic skills development. By knowing when the charge applies, how much it costs and the rules around its payment, employers can better manage their recruitment processes and ensure compliance with immigration regulations. Consulting with solicitors who specialise in business immigration services is recommended if you are unsure about any aspect of the ISC or other sponsorship requirements.
