What is the Immigration Skills Charge (ISC)?

From 6 April 2017, employers are liable to pay an Immigration Skills Charge (ISC) if they want to sponsor a skilled migrant from outside of the EEA to work for them in the UK. The purpose of the ISC is to incentivise employers to train British workers and to deter employers in recruiting migrant workers unless necessary. This was aimed at closing the skills gap created in the labour market.

How much do you have to pay?

•  Medium or large sized businesses will pay £1,000 if they are sponsoring a migrant for 12 months or less. For each additional 6 months, the business will pay an additional £500. The maximum ISC payable for 5 years is £5,000.
• Small and charitable organisations will pay £364 if they are sponsoring a migrant for 12 months or less. For each additional 6 months, the business will pay an additional £182. The maximum ISC payable for 5 years is £1,820.

How is a small business or charitable organisation defined?

• A company subject to the small companies regime under s381 of the Companies Act 2006.
• A charity within the meaning of s1 of the Charities Act 2011, or s1 of the Charities Act (Northern Ireland) 2008 or listed on the Scottish Charity Register.
• An organisation who employs no more than 50 employees.

When do you have to pay?

A sponsor will have to pay the ISC when they assign a Certificate of Sponsorship (CoS) in the Tier 2 category.

When is the sponsor exempt from paying the ISC?

• If sponsoring a migrant under the Tier 2 (ICT – Graduate Trainee) category.
• Under the Tier 2 (sportsperson) or Tier 2 (Minister of Religion) categories.
• When a Tier 4 student switches inside the UK to the Tier 2 (general) category. The exemption continues to apply when the employer assigns a CoS to the migrant to continue in the same role.
• When the migrant has previously been assigned a CoS, and the sponsor is assigning a new CoS for the same migrant to work for the same sponsor, but in a new role and the period of leave on the new CoS will not exceed their existing period of leave.
• If a migrant is from outside of the UK and is applying for an entry clearance visa which is for a period of less than 6 months.
• If the migrant’s job role is at PhD skill level which is specified in Table 1 of Appendix J of the Immigration Rules.

Invalid CoS

If the ISC has not been paid, the CoS will be invalid. UKVI are likely to contact the sponsor in this situation and request full payment. This may cause delays in processing the application. If the sponsor does not pay the ISC within 10 working days of UKVI’s request, then the application will be considered void and therefore refused.

In what circumstances does UKVI issue a refund?

The ISC will be refunded in full if:

The migrant’s visa application is refused

• The migrant’s visa application is withdrawn
• The migrant’s visa application is granted, but the migrant does not travel to the UK to work

The ISC will be partially refunded if:

The migrant’s employment terminates before the end date of the CoS

• The migrant changes employer after commencing their job with the current employer
• The migrant’s visa is granted for a shorter period of time than the duration stated in their CoS
• The sponsor makes an application on the basis of being a medium/large business, but prior to assigning the CoS, the business has been verified as a small business or charitable organisation.

There are certain situations where a refund will not be issued, including:

•  Where the migrant’s leave has been curtailed because they had breached a condition of their visa (this could be due to the action of the migrant or the sponsor).
• The migrant changes their job role but stays with the same employer.
• The migrant switches from the Tier 2 route to another immigration route but remains in the same job.

Does the sponsor pay ISC for the migrant’s dependants?

The sponsor is not required to pay ISC for the migrant’s dependants.