New Immigration Fees

21 Apr 2017

The latest round of changes to the Immigration Rules focuses on fees. Businesses that rely on migrant workers from outside the EU to plug their skills gap will feel the pinch from the increases, starting with the Immigration Skills Charge.

The charge is £1,000 for each new Certificate of Sponsorship issued under Tier 2 (£364 for small employers). It’s payable by the sponsor on the issue of a certificate and annually thereafter. The sponsor must also pay a separate fee of £199 to issue the certificate and the migrant will pay a fee on the visa application of £587. So the upfront fees on an application for a three year visa under tier 2 are now £1,786 plus £1,000 in each subsequent year.

The Home Office says the funds raised by the new charge will be used to help close the skills gap. In the meantime employers may want to review their practice on visa fees. Many have previously absorbed the cost but I anticipate they’ll now consider treating the expense as a loan repayable from earnings by the employee. Companies doing this should be careful to put the right agreements in place from the outset in order to avoid the pitfalls that come with unauthorised deductions from earnings.  

At the same time the minimum salary threshold under Tier 2 (General) has risen from £25,000 to £30,000 with a few exemptions. The salary threshold for an intra-company transfer (ICT) has risen to £41,000 while the percentage of salary which can be paid as an accommodation allowance has fallen by 10%. The £200pa healthcare surcharge has also been extended to ICT’s.

The obvious conclusion is that international companies wanting to second staff to the UK may have to raise their salaries. However they might first consider taking advantage of the slight relaxation in the salary requirements and numbers of graduate trainees they’re permitted to bring to the UK. Alternatively they may look to more senior recruits because the one year qualifying employment condition under ICT has been removed for those earning more than £73,900pa.

Most personal applicants will also pay more. The most eye catching increase is in the fee for Indefinite Leave to Remain. This has risen by more than 20% from £1,875 to £2,297.

At first glance this looks like bad news all round but I do believe there are perhaps some rays of sunshine ahead. The Home Office does seem to appreciate that the popular demand to “do something” about immigration should be tempered by the legitimate needs of business and it is quietly re-introducing some subjective elements into the otherwise barren landscape of objective tick box tests. There are also some unheralded but welcome reductions. The fee for a biometric identity card recording no time limit falls from £308 to £237 and refugee dependent relatives will now be charged £423 instead of £472.