In UK immigration and employment, the Immigration Skills Charge plays an important role in planning the business to hire skilled workers from abroad and it is important to understand the details. This guide will look at the purpose, costs, exemptions, and impact of the ISC to help you navigate its complexities.
What is the Immigration Skills Charge?
It is an extra fee that UK employers must pay when they give a Certificate of Sponsorship (CoS) to a foreign worker. Introduced in April 2017, this charge aims to encourage domestic workforce development and reduce reliance on overseas talent.
Purpose and Launch
The ISC was created to give incentives to UK employers to invest more in training and developing local workers, rather than relying on foreign labor, and by making it more expensive to hire from abroad, the UK government hopes to bolster the domestic job market.
Determining the Cost
The amount an employer pays under the ISC depends on the size and nature of the organization and the length of employment for the sponsored worker.
Small or Charitable Sponsors:
- £364 for up to 12 months of employment
- £182 for each additional 6-month period
Large Sponsors:
- £1,000 for up to 12 months of employment
- £500 for each additional 6-month period
For employment of less than 6 months, an ISC is not needed.
Exemptions
- Workers under specific PhD occupation codes.
- Switching workers from the student route and extending their stay with the same sponsor.
- Workers with a CoS issued before April 6, 2017, continuing in a skilled role.
- EU nationals or Latvian non-citizen passport holders on the Global Business Mobility Route, for CoS issued on or after January 1, 2023, for up to 3 years.
Consequences of Non-Payment
If the ISC isn’t paid in full, the consequences can be severe:
- The application for entry clearance or permission to remain will be refused.
- The Certificate of Sponsorship will be invalid until payment is made.
Refunds and Top-Up Requests
Sponsors might be eligible for refunds or top-up requests under specific conditions:
- You’ll receive a full refund if we refuse or withdraw your application, or if you decide not to start employment and the CoS expires.
- Partial Refund: If the employer grants permission for a shorter period than specified, or if the worker ends employment early due to voluntary changes or ill health.
Use of Immigration Skills Charge Funds
By November 2022, the ISC had generated about £349 million in the 2021-22 fiscal year. Despite its aim to support domestic workforce training, there has been criticism over the transparency of fund allocation.
The Future of the Immigration Skills Charge
It has faced criticism, especially from sectors experiencing staffing shortages. The recent addition of care workers and laborers to the shortage occupation list has sparked debate. Many businesses, including small or charitable organizations, argue that the government should not financially penalize them for hiring overseas workers when local labor cannot meet demand.
The UK Immigration Skills Charge is a significant aspect of the UK’s immigration and employment landscape. Understanding its costs, exemptions, and implications is important for any organization that wants to hire skilled workers from abroad. While the ISC aims to encourage investment in the domestic workforce, its effectiveness and future remain hot topics.
