Immigration Skills Charge: New exemption from January 2023

Home Office announces new Immigration Skills Charge exemption

The Home Office has confirmed that, from January 2023, a new Immigration Skills Charge exemption will be available for employers who use the Global Business Mobility: Senior or Specialist Worker route, for EU national workers from their overseas offices based in the EU.

What is the Immigration Skills Charge?

The Immigration Skills Charge (ISC) was introduced in April 2017 and is currently payable by employers for the majority of workers they sponsor under the Skilled Worker and Global Business Mobility: Senior or Specialist Worker (formally Tier 2 (Intra-Company Transfer)) routes. The Home Office has advised that the ISC serves to incentivise UK businesses to invest in the domestic workforce and recently noted in a Parliamentary debate that it has “raised £349 million” in the last fiscal year.

The charge is calculated based on the length of the visa applied for by the sponsored worker and is paid up front, when the employer assigns their Certificate of Sponsorship (CoS). Large/medium companies pay a charge of £1,000 per year per worker and small companies/charitable organisations pay £364 per worker per year. For example, a large company sponsoring a new hire from overseas for a five year visa would pay £5,000 when arranging their immigration permission, alongside the other application costs. This charge cannot be passed on to the worker and must be borne by the sponsor.

Who is currently exempt from paying the Immigration Skills Charge?

The ISC is not currently payable where the sponsored worker falls under one of the below categories. They:

• Will be entering the UK for less than six months
• Will be fulfilling a PhD level role
• Will be entering the UK as Global Business Mobility: Graduate Trainee
• Are an existing Skilled Worker (formally Tier 2 General) or Global Business Mobility (formally Intra-Company Transfer) visa holder and have previously been assigned a CoS which was Skills Charge exempt, and they are now seeking to extend their period of leave with the same employer
• Are an existing Skilled Worker (formally Tier 2 General) or Global Business Mobility (formally Intra-Company Transfer) visa holder and are making a Change of Employment application with the same employer, which does not extend the length of their permission, due to a change in job type
• Hold permission as a Student (formally Tier 4 (General) student), and are seeking to switch into the Skilled Worker category from within the UK
• Are seeking to extend their permission and were originally assigned a CoS as a ‘Tier 2’ worker before 6 April 2017

New ISC exemption from 1 January 2023

In November 2022, the Home Office announced that, subject to Parliamentary approval (which has now been received), a new exemption would apply, benefiting employers who use the Global Business Mobility: Senior or Specialist Worker route. The exemption aims to better uphold the EU-UK Trade and Cooperation Agreement which was signed in December 2020. Employers who assign a CoS from 01 January 2023 will not need to pay the Immigration Skills Charge where all of the following apply:

• The individual is applying under the Global Business Mobility: Senior or Specialist Worker category and meets the applicable requirements for this route
• They are the national of an EU country or a Latvian non-citizen (note that this does not apply to nationals of Iceland, Norway, Liechenstein or Switzerland)
• The overseas company which employs the individual is a business established in the EU and forms part of the same ‘sponsor group’ as the company sponsoring them to work in the UK (i.e. the UK sponsor and the overseas employer are linked by common ownership or control and have been notified as such to the Home Office)
• The UK assignment, based on the dates provided on the Certificate of Sponsorship, will be no more than three years in duration

If you have any questions on sponsoring workers and applying for work visas, please do not hesitate to contact our one of our Business Immigration team below.