Increases in fees and charges
The government has announced plans to increase:
- the Immigration Health Surcharge from £624 to £1,035 per year (main rate) and from £470 to £776 per year (under-18s and students). This charge is payable in full at the time of application for the duration of the visa for workers entering for a period of 6 months or more, along with the family members of migrants and British citizens alike. The government has said this will help cover the full healthcare costs of those who pay the surcharge (although those on Health and Care Worker visas will remain exempt)
- fees for work and visit visa applications by 15% and
- fees for Certificates of Sponsorship, settlement, citizenship, wider entry clearance, leave to remain, study visas and priority visas by at least 20%.
Other changes
The government has also announced several additional changes:
- the biometric enrolment fee of £19.20 will be abolished
- the £161 charge for transfer of conditions will be abolished
- fees for amending details on physical documents like name, sex marker, nationality and photograph will be abolished
- fees will be abolished for the like-for-like replacement of a biometric residence permit where the document has expired and
- The cost of student and priority service applications outside and inside the UK will be equalized as it is currently cheaper to apply from within the UK for several visa types.
At the time of writing, there has been no proposal to increase the Immigration Skills Charge which is the charge paid by employers for the privilege of sponsoring people in the UK. This is already at £1000 per year per sponsored employee for medium and large businesses and the government would have to think carefully about any increase.
Impact on employers
No date has been set for the introduction of these increases, but they are expected to be imminent in line with current economic pressures.
These changes will impact on the budget assessments for UK businesses employing foreign nationals. By far the biggest increase is in the Immigration Health Surcharge, which has seen an increase of around 66%. This is paid for by the individual in the first instance, but in many cases, the employer offers to reimburse the individual for this cost. Employers should be mindful of promises they have made to sponsored employees on refunding these costs and either reassess their position or budget accordingly. Some employers are already using “claw back” clauses for sponsored employees, which binds an employee who is sponsored as a Skilled Worker under the points-based system to repay some, or all, of the fees paid by their employer if they leave their employer within a certain time frame. This certainly provides some financial protection for employers; however, caution should be taken when drafting these types of clauses as in some cases they can be unenforceable.
There are also limits on the types of fees that can be clawed back in this way. For example, if a sponsor tried to claw back the cost of the immigration skills charge from a sponsored employee, this gives grounds for the Home Office to revoke their sponsor licence. Also, such clauses have come under criticism as they are viewed as trapping the employee and preventing them from leaving the country or obtaining another job in the UK.
Employers should draft any claw back clauses with great care to ensure they are fair, reasonable, and enforceable.
If you are currently using, or seeking to employ foreign nationals, you will need to reassess your business’ budgets and application strategies considering the proposed increases to immigration fees. If you can no longer afford to sponsor employees and you are considering ending their employment as a result of these costs, you should consider what protection the employees have from unfair dismissal or discrimination and seek employment law advice.
We recommend lodging any immigration applications sooner rather than later, to avoid additional costs.
If you have questions about the increases to immigration fees and how they might affect your business, or if you would like us to review your claw back clauses, contact our team of expert immigration lawyers.
