The Immigration Skills Charge (ISC) is a significant cost for employers sponsoring migrant workers. However, many are unaware of when they might qualify for a refund.
This guide simplifies ISC refunds, covering eligibility for full or partial refunds, scenarios where refunds don't apply, and how to navigate the process smoothly.
When can a sponsor receive a refund on the Immigration Skills Charge (ISC)?
The ISC is a fee paid by employers sponsoring migrant employees in the Skilled Worker or Senior or Specialist Worker visa routes. The ISC is currently set at £364 per year for small employers* and £1000 per year for medium or large employers.
The sponsoring employer must pay the ISC for the duration of the sponsorship period upfront at the time the certificate of sponsorship is assigned to the migrant.
For example, where a medium/large employer is sponsoring a 3 year employment period (which allows for a 3 year visa), they will need to pay £3000 upfront.
Understandably, employers are keen to understand in what circumstances a refund for the ISC may be available and this article explores this topic.
Full ISC Refund
A full refund is applicable in the following scenarios:
- ISC paid in error: When the ISC was not actually required.
- Unused Certificate of Sponsorship (CoS): The CoS assigned to the worker expires without being used for a visa application.
- Visa application withdrawal, refusal, or unsuccessful employment commencement: This includes cases where the application is withdrawn, refused, or the worker ultimately doesn't take up the sponsored position despite a successful application.
Partial ISC Refund
A partial refund may be granted if:
- Overpayment: The sponsor overpaid the ISC, for example where a sponsor has been wrongly classified as a medium/large employer but is in fact a small employer. This could also happen where the employment duration has been shortened/lengthened via a sponsor note after the CoS has been assigned.
- Shorter visa duration: The visa is granted for a shorter period than initially requested on the CoS.
- Early termination of sponsorship: The worker leaves the employment before the end date stated on the CoS.
When is an ISC Refund Not Applicable?
ISC refunds are not granted in these situations:
- First year of sponsorship: No refund is issued if the worker for the first year of sponsorship;
- Internal job changes: The worker remains with the same employer, even if their role or job title changes.
- Short-term sponsorship: Sponsorship for 12 months or less is not eligible for a refund.
- Change of immigration route: The worker switches to a different immigration route but continues in the same employment. For example, where the migrant moves onto a Global Talent or Spouse visa.
- Dormant sponsor licence: The licence is made dormant.
- Compliance breaches: Revocation of the sponsor licence or curtailment of leave due to compliance issues.
Timeframes for Refunds
Refunds are typically processed within 90 days of the following trigger events:
- Sponsor notifying UKVI of the worker not starting/leaving employment early;
- The CoS expiring without being used in a valid visa application;
- Deadline for administrative review passes without an application being made or the application is unsuccessful.
How are refunds processed?
Refunds are processed by UKVI through Worldpay to the original debit or credit card used for the ISC payment.
Need Help with obtaining your ISC Refund?
Obtaining your ISC refund should be automatic but unfortunately many employers find that the automated system does not work.
If you have questions or require assistance obtaining your ISC refund, contact WestBridge Business Immigration for expert guidance.
* Your company is classified as 'small' if it meets any 2 of the following criteria:
-A turnover of £10.2 million or less
-£5.1 million or less on its balance sheet
-50 employees or less
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.
