The costs of employing a sponsored worker

UK businesses who hold a sponsored worker licence to employ non-settled workers must be aware of the multiple Home Office fees associated with doing so. These fees vary depending on the size of the sponsor’s organisation, the length of sponsorship, the nationality of the sponsored worker, the type of work visa, and many other factors.

Certificates of Sponsorship

Firstly, employers must ensure there is a sufficient allocation of Undefined Certificates of Sponsorships (CoS) on their sponsor licence for sponsored worker. This information can be found on the Licence Summary of their online account on the Sponsorship Management System (SMS). Undefined CoS are used for Skilled Worker candidates already in the UK on a different type of visa or for Intra-Company Transfer candidates who are employed at a branch overseas.

If for any reason there are not enough undefined CoS’ on a sponsor licence, the business must submit a request on the SMS for additional CoS’ to be allocated to their licence. There is no cost for this type of request, however if submitting via the standard service, this can take up to 18 weeks to be granted, which of course will only delay the recruitment and onboarding process. To expedite an additional CoS request from 18 weeks to 5 working days, sponsors may submit a priority change of circumstance request at a cost of £200.

This priority change of circumstance (PCOC) service is also available for other types of requests made on the SMS, including adding a new Level 1 User, changing a Level 1 User, replacing the Authorising Officer (AO) or amending their details, replacing the Key Contact or amending their details, adding a Representative, and amending an organisation’s details. The PCOC service accepts 60 requests per day, and processes requests on a first-come first-serve basis.

If a business is looking to sponsor a Skilled Worker candidate from outside the UK, this will require applying for a Defined CoS on the SMS which are granted on a need’s basis, inputting the details of the vacant role and the desired candidate. There is no charge for a Defined CoS application, and processing times are 1-2 working days provided the Home Office has no further queries for the employer.

When a sponsor has obtained and drafted the requisite type of CoS, the next step is to assign the CoS to the migrant. This can only be done by a Level 1 or Level 2 User who has been granted access to the SMS by the Home Office.

The CoS assignment fee (for both Undefined and Defined CoS’) is normally £199, however there is no cost when assigning a CoS to a citizen of Austria, Belgium, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Luxembourg, Malta, the Netherlands, North Macedonia, Norway, Poland, Portugal, Slovakia, Spain, Sweden, or Turkey.

Immigration Skills Charge

The Immigration Skills Charge (ISC) is an additional fee introduced by the Home Office in 2017, which must be paid by employers sponsoring a migrant worker on a Skilled Worker or Intra-Company Transfer visa.

The ISC amount depends on the size of the sponsor’s organisation and the length of the worker’s sponsorship. For small or charitable sponsors, the cost is £364 for the first year of sponsorship, and £182 for each additional six months. To be deemed a small sponsor, at least two of the following three criteria must apply:

1. The company’s annual turnover is £10.2 million or less
2. The company’s total assets are worth £5.1 million or less
3. The company employs 50 individuals or less

Charitable sponsors are those charities listed on the UK’s register of charities, excepted or exempt charities, or ecclesiastical companies established for charitable purposes.

For medium or large sponsors, the ISC cost is £1,000 for the first year of sponsorship and £500 for every additional 6 months. So, for example, a large organisation sponsoring a Skilled Worker migrant on a 5-year visa will have to pay £5,000 for the ISC. The ISC is fully payable at the time of assigning a CoS, and there are limited scenarios where a sponsor is exempt from the fee.

The ISC is not payable when sponsoring Intra-Company Graduate Trainee migrants, or Skilled Worker/Intra-Company Transfer migrants extending their stay where they were previously on a Student visa at the time of applying for their initial work visa. The ISC is not payable for overseas migrant workers who come to work in the UK for less than 6 months. If sponsoring a worker for more than 6 months but less than a year, the ISC fee for 12 months must be paid.

Sponsoring workers in certain occupations also provides an exemption from paying the ISC. These include; chemical scientists, biological scientists and biochemists, physical scientists, social and humanities scientists, natural and social science professionals, research and development managers, higher education teaching professionals, clergy, sports players, and sports coaches.

Sponsors will be issued a full refund of the ISC if the corresponding visa application is refused, withdrawn, or is approved but the worker does not start their job. The ISC is partially reimbursed if a sponsored worker is granted with less time on their visa than stated on their CoS, starts working for their sponsor but then changes to another sponsor, or leaves their job before the work end date on their CoS. Partial refunds are also issued when a sponsor pays the medium/large organisation fee but should have paid the small/charitable organisation fee.

Visa application fee for sponsored workers

Once a sponsor assigns a CoS to a migrant candidate, the corresponding visa application must be submitted no later than three months after the CoS assignment date. Again, visa application fees vary depending on a few factors, and the same fees apply for both the main worker applicant and any dependant family members.

For a Skilled Worker or Intra-Company Transfer visa submitted outside the UK, the cost is £610 for a visa up to three years and £1,220 for a visa longer than three years. If submitted from within the UK, the cost increases to £704 for three years or less and £1,408 for more than three years.

Migrant workers being sponsored for roles on the Shortage Occupation list i.e., roles which have a shortage of labour in the UK, have their visa application fee reduced to £464 for a visa up to three years and £928 for a visa exceeding 3 years in length. This is applicable for both in-country and out-of-country applications.

Similar to the CoS assignment fee, applicants of certain EU countries (including Turkey) have their visa application fees automatically reduced by £55 on the basis of their nationality.

There is also the option of paying an additional priority fee to expedite the processing of a visa application. For in-country applications, this Priority Service is £500 to have a decision within 5 working days of the biometric appointment and the Super Priority Service is £800 to generate a decision by the end of the next working day. For overseas applications, the fees vary depending on the country and city of application.

Immigration Health Surcharge

In addition to the visa application fee, the Immigration Health Surcharge (IHS) is payable at the time of submitting the visa application. The IHS covers the cost of medical treatment provided by the NHS whilst residing in the UK.

The cost is £624 per year of the visa and is the same for both the main worker applicant and any dependants. Given the financial pressures being placed on the NHS, the IHS has steadily increased over the years, with the most recent rise taking place in October 2020 when it increased from £400 per year to the current figure in place of £624 per year.

Conclusion

Sponsoring a migrant worker is a substantial financial investment and one which must not be taken lightly to ensure that all of the discussed fees are paid correctly.  For further information on sponsored worker contact our immigration solicitors.