The Immigration Skills Charge

As part of the Government’s continual drive to compel employers to engage British workers, there are plans to induce a (further) financial disincentive for those seeking to sponsor migrant workers in skilled occupations in the form of a skills charge. Within the most recently issued guidance it is stated:

“Subject to parliamentary approval, legislation expected to come into force on 6 April 2017 means that you may be required to pay the Immigration Skills Charge where you sponsor a worker from outside the European Economic Area (EEA). The skills charge will apply to a sponsor of a Tier 2 worker assigned a certificate of sponsorship in the ‘General’ or ‘Intra-company Transfer’ route and who will be applying from:

· outside the UK for a visa

· inside the UK to switch to this visa from another

· inside the UK to extend their existing visa

The skills charge does not apply if you are sponsoring:

· a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and is applying from inside the UK to extend their Tier 2 stay with either the same sponsor or a different sponsor

· a Tier 2 (Intra-company Transfer) Graduate Trainee

· a worker to do a specified PhD level occupation

· a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa

You do not have to pay the skills charge for the worker’s family members (‘dependants’).

The skills charge will be £1000 per year for medium or large sponsors and £364 per year for small or charitable sponsors. It will be payable upfront and for the total period of time covered by the certificate of sponsorship. You will usually be considered to be a small business if:

· your annual turnover is £10.2 million or less

· you have 50 employees or fewer

Sponsors will need to pay the skills charge at the same time that they pay to assign a certificate of sponsorship to sponsor someone to do a skilled job in the UK. The money collected by the Home Office will be used to address skills gaps in the UK workforce. The skills charge is one of the key reforms within the Immigration Act 2016. The Act builds on the government’s ongoing reforms to make sure the immigration system works in the national interest. Further information on the skills charge will be available on the GOV.UK website.”

A fairly hefty fee then, on top of the existing £199 to issue a certificate of sponsorship (COS). A small business seeking to sponsor a worker for 3 years would then be expected to pay £1291 (the certificate fee plus the skills charge). Add on to that the often frequent need to pay another £200 for the special priority service in order to actually obtain a certificate of sponsorship, the Immigration Health Surcharge fee of £600 and the application fee of £575, and all the extra services that VFS Global provide to get a quick decision, then it can add up to quite a total, not to mention the cost involved in seeking the licence in the first place.

As will be noted there are a number of exceptions, mostly concerned with people who are already here, though not those who are here in another capacity other than Tier 2 or Tier 4.

It will be interesting to see how this is implemented. Potentially the Sponsor Management System will be altered to include this charge. I have a sneaking suspicion however that the system sponsors use is not amenable to that kind of change, in particular duration based variances in COS cost.

We might therefore see the change brought in through yet another Home Office system. Often now for a Tier 2 entry clearance visa application 4 separate systems are used:

·         The SMS System to issue the COS

·         The VISA4UK to submit the visa application

·         The IHS website to pay for the Immigration Health Surcharge

·         The VFS Global system to pay for yet more services

Also interesting will be the legislation which is to come into force. Currently the fees to be charged to sponsors, for example for the issuance of a COS, are laid down in The Immigration and Nationality (Fees) Regulations 2016.

Most likely a new version of those Regulations will be laid before Parliament shortly.

Whether this king’s ransom of costs will discourage an employer from engaging a skilled migrant worker and instead encourage them to ‘train’ a worker who has the right nationality remains to be seen.