What is the immigration skills charge?

The immigration skills charge is an additional fee payable by a sponsoring employer when a certificate of sponsorship is issued prior to a worker beginning their employment. The sponsor is required to pay the immigration skills charge and cannot pass liability onto the sponsored worker. Doing so could risk revocation of a sponsorship licence.

Launched in April 2017 with the attempt to incentivise UK based employers to train up domestic workers and reduce reliance on overseas workers, the immigration skills charge acts as an additional upfront overhead for businesses recruiting overseas talent.

The fee applies only to skilled workers and those with a senior or specialist worker visa (Global Business Mobility) who were issued with a certificate of sponsorship after 6 April 2017. We will explain who is required to pay, when, and the exemptions that exist depending on the nature of the worker and the employment.

What does the immigration white paper say about the immigration skills charge?

The immigration white paper, published on 12 May 2025, proposes increasing the immigration skills charge by 32% and using the money raised to invest in upskilling the domestic workforce in priority sectors.

Currently, the immigration skills charge is £364 per year for small businesses or charities and £1,000 per year for medium or large sponsors. It will therefore go up to around £480.48 for small businesses or charities and and £1,320 for medium or large sponsors.

The white paper also proposes doubling the qualifying period for settlement on a skilled worker visa from five years to ten years, which would therefore double the immigration skills charge payable by an employer if they’re sponsoring a worker to settlement. Over a ten year qualifying period, the immigration skills charge would cost sponsors from small businesses and charities around £4804, and £13,200 for medium or large sponsors.

There has been no further information published about when these proposed changes will take effect. 

How much is a sponsor required to pay?

As noted above, the amount payable is dependent on the size and nature of the organisation. It also depends on the length of a potential worker’s employment as specified on the certificate of sponsorship.

Importantly, sponsors are not required to pay a fee for any worker applying for permission to stay for less than 6 months. If an application is submitted for longer than 6 months but less than 12 months, the sponsor is liable for the full yearly charge.

For small or charitable sponsors which meet the definition of regulation 2 of the Immigration Skills Charge Regulations, the immigration skills charge exists as another upfront cost payable when recruiting overseas staff.

Small or charitable sponsors currently pay £364 for a period of employment of up to 12 months. An additional charge of £182 is incurred for each subsequent period of 6 months as specified on the certificate of sponsorship.

Large sponsors currently pay £1,000 for a period of employment up to 12 months. Each further 6-month period is charged at £500.  

If the additional period of employment is for less than 6 months, the sponsor is still required to pay the full 6-month fee because it cannot be divided monthly. As an example, if a qualifying worker is allocated a certificate of sponsorship for 20 months, a small or charitable sponsor will be required to pay £728. A large sponsor will be required to pay £2,000.

What exemptions exist for sponsors?

A sponsor is exempt from paying the immigration skills charge in circumstances listed under regulation 4 of the Immigration Skills Charge Regulations 2017and set out in the guidance. Exemptions apply where:

• A worker is applying under certain PhD occupation codes. These include certain scientists, research and development managers, higher education teaching professionals, clergy, sports players and sports coaches, instructors and officials.
• A worker is switching from the student route. This includes where a worker initially switched from the student route and is now extending in the same role with the same sponsor.
• A worker who is the subject of an intra-company transfer as a graduate trainee to a UK branch of  a multi-national organisation. The sponsor is exempt if the post is for no more than 12 months and is part of a structured graduate training programme progressing towards a managerial or specialist role.
• A worker was granted a certificate of sponsorship prior to 06 April 2017, continues to hold permission as a skilled worker and continues to work in a skilled role.
• A worker is an EU national or holds a Latvian non-citizen passport and is assigned a certificate of sponsorship as a senior or specialist worker under the Global Business Mobility Route. A sponsor is exempt where a certificate of sponsorship was issued on or after 01 January 2023 for no more than 3 years, and the worker is currently employed at the sponsor’s offices or a linked business in the EU.
• A worker is continuing employment with their current sponsor but requires a new certificate of sponsorship, provided their length of stay remains the same.
• A worker is seeking entry clearance to the UK for less than 6 months.
• A worker on a scale-up visa.

Sponsors should be aware that the immigration skills charge is not payable for dependants of applicants.

What happens if a sponsor does not pay the immigration skills charge?

If the immigration skills charge is not paid in full, a certificate of sponsorship will remain invalid until payment is received. A sponsor will receive a formal reminder to make payment. If the fee remains unpaid within 10 working days (3 working days in priority applications) of this reminder, the application for entry clearance or permission to remain will be refused.

What circumstances will lead to a refund or top up request?

A sponsor will be entitled to a full refund where an application is refused by the Home Office or withdrawn by the applicant. Similarly, a full refund will be issued where the worker does not commence employment with the sponsor and the certificate of sponsorship expires. A partial refund is provided where the worker is granted permission for a period less than requested on the certificate of sponsorship.

A sponsor is entitled to a partial refund in situations where the employment ends. For instance, if a worker voluntarily changes sponsors or stops working early due to ill health, then the sponsor can request a refund.

A top up request for payment of additional fees will be sent to a sponsor by email in situations where a sponsor has underpaid the fee payable, or where the sponsor has erroneously been registered as a small or charitable organisation. The sponsor will be sent a link to make payment through the WorldPay portal.

How is the income generated by immigration skills charge being used?

The revenue generated from the immigration skills charge has surged in the last five years. According to the Home Office annual report and accounts, in the fiscal year 2020-2021 the immigration skills charge generated around £139 million in revenue. This jumped to around £349 million in the year 2021-22 and jumped again to £586 million in 2022-23. In the most recent Home Office annual report and accounts, for the year 2023-24, the immigration skills charge generated around £667 million in revenue.

Whilst the purpose of the charge exists to incentivise employers to recruit and train domestic workers and decrease reliance on overseas workers, there has been a marked lack of clarity on exactly where this tax is being invested. A portion of the charge is allocated between the devolved regions for education and skills purposes, although how this is being used to address the skills gap in the UK, or whether the intended reason for introduction is being met remains to be seen.

Looking forward

The immigration skills charge has faced considerable criticism as neither necessary nor functional from public sector bodies who are desperately understaffed. On top of increasing visa fees and the immigration health surcharge, it is questionable whether businesses, including small or charitable organisations, should be financially penalised for recruiting workers where the domestic labour market is simply unable to fill the positions needed.

This post was originally published in August 2023 and has been updated by Rachel Whickman so that it is correct as of the new date of publication shown.