UK: UK Immigration And Nationality Fees: The Only Way Is Up

The UK Home Office has announced that, with effect from 4 October 2023, there will be an increase in application fees for a number of UK immigration and nationality routes. The headline increases are:

• Work and visit visas – increasing by up to 15%
• Family visas, settlement and citizenship fees – increasing by up to 20%
• Student visas – increasing by up to 35%

Background to the fee increases

Since the introduction of visa and settlement application fees in the UK in 2003, the cost to individuals and businesses has risen significantly over the years. The UK government's view is that those who benefit the most from the immigration system, that is migrants themselves and those, such as employers, who sponsor migrants, should pay for its costs. To this end, the fees set by the Home Office are above the actual cost of processing immigration applications as the income generated is also used to fund the operation of the UK's border control and immigration system as a whole, including the compliance and enforcement functions. A spreadsheet of the new 4 October fees detailing the actual cost to the Home Office for each category can be found here.

Immigration Health Surcharge

The Home Office has also proposed to increase the Immigration Health Surcharge by 66% from £624 to £1,035 per year. Although the UK Government has yet to publish the date that this will come into effect, it is likely to be early next year.

Immigration Skills Charge

One piece of good news is that there are currently no plans to increase the Immigration Skills Charge, which currently costs £364 or £1000 per year for each sponsored migrant depending on whether the sponsor is a small or large employer.

Immigration and Nationality Fees

Below is a table listing some of the main fee changes which are likely to affect employers who sponsor migrants to work in the UK. The full details of the new fees may be found here.

To give sponsoring employers an idea of how this will affect them, the overall cost, excluding legal fees, of sponsoring a migrant for five years, where the sponsor is a large employer and the priority service is used, will increase by £475 (from £9,804 to £10,279) while the overall cost of sponsoring a migrant who has a partner and two children accompanying them to the UK for the same period will increase by £1780 (from £23,619 to £25,399).

Conclusion

Whilst the Home Office states that all fee changes take into account the overall cost to applicants and employers versus the necessity of generating income to achieve the Home Office's aim of a "largely self-funded" immigration system, there is no doubt that these above inflation fee increases will add to the significant fees burden already imposed on employers and migrants to the UK. These fee increases may potentially affect the UK's economic growth if they lead to companies moving specialist roles which they cannot fill from the UK's domestic labour market to other countries or they result in highly skilled migrants deciding not to relocate to the UK as they consider the immigration costs to be excessive.

Sponsoring employers may therefore wish to consider the duration of sponsorship. If a CoS is assigned for the maximum five year period at the outset, although this may save on potential extension application costs, it does result in a significant up front outlay. We are therefore increasingly seeing employers sponsoring permanent UK employees for a shorter initial period. We are also receiving a number of requests to assist in the preparation of clawback provisions to be inserted into the employment contracts of sponsored migrants, which enable employers to claim back all, or a proportion of, the immigration costs if the sponsored migrant leaves their employment before their sponsorship ends. Care must be taken in the drafting of such terms to ensure that they are not deemed to be penalty clauses since this could result in them being found to be unenforceable. In addition, it is important to be aware that there are some immigration costs that sponsor licence holders are not permitted to claw back, which includes the Immigration Skills Charge.

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.