Guidance for employers on the consequences of recovering fees from sponsored workers.
Introduction
Employers are likely to be aware of the significant costs involved with obtaining a visa to work in the UK, such as the expense of obtaining a sponsor licence, visa application fees and the Immigration Health Surcharge (IHS). Employers may wish to contribute towards these fees in order to incentivise sponsored workers to move to the UK. In this context, it is important to consider details relating to the Immigration Skills Charge (ISC) and fee for Certificate of Sponsorship (CoS).
Certificate of Sponsorship (CoS) fee
A Certificate of Sponsorship is one of the requirements for workers to move to the UK on sponsored work visas. The CoS fee is payable each time an employer assigns a CoS to a prospective employee, and is set as £239 for each Worker and £25 for each Temporary Worker, payable at the outset of sponsorship.
Immigration Skills Charge (ISC)
The ISC is payable each time an employer sponsors a migrant worker. The charge is multiplied by the number of years of sponsorship, and therefore has the potential to catch out employers sponsoring migrant workers for the first time.
The ISC cannot be paid annually and must be paid in a single instalment. Extending an existing visa will also result in an additional ISC to cover the extended period of leave.
The ISC is set at two levels:
- £364 a year for small companies
- £1,000 a year for medium to large companies
A business will be a small company if it meets at least two of the following criteria:
- The company must have a turnover of no more than £10.2 million.
- The company must have a balance sheet total of no more than £5.1 million.
- There must be no more than 50 employees.
The total ISC depends on the length of employment stated within the CoS. As an example, a large company sponsoring a Skilled Worker on a 3-year visa route must pay an ISC of £3,000. If the Skilled Worker visa is extended a further 2 years, an additional ISC of £2,000 will apply. An application will not proceed until the ISC has been paid in full.
Refunded fees
In limited situations, the employer may be eligible for either a full or partial refund of the ISC, which is processed through the Sponsor Management System (SMS):
- If the visa application is refused or withdrawn, or the sponsored worker does not take up the role stated on the CoS, the ISC may be refunded.
- If the sponsored employee starts working for the sponsoring employer but shortly leaves or is granted less time on the visa than the term being sponsored, the employer may be eligible for a partial refund, although no refund will be issued in instances where the worker's term of leave in the UK is reduced due to a breach of the conditions of their leave, or the actions of the employee or employer.
Fees are non-recoverable
Crucially, neither the CoS fee nor ISC fee can be passed on to the sponsored worker. One of the reasons for this is that the ISC is designed as a disincentive for UK-based employers to hire from overseas.
The consequences of attempting to recover either the CoS or ISC are severe, as any effort at clawback is likely to be interpreted by the Home Office as a breach of the sponsor licence conditions and grounds for revocation of the licence. An employer losing their sponsor licence would result in the business being unable to hire migrant workers. This is a crucial lesson for employers, particularly if pursuing the sponsor licence route for the first time.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
