The recent increases in immigration fees in the United Kingdom, implemented in October 2023, coupled with a substantial rise in the Immigration Health Surcharge (IHS) in 2024, could pose challenges for employers in the country. The government raised most work and visit visas by 15%, and certificates to sponsor new workers saw a 20% increase. While sponsor fees for employers remain unchanged, the heightened costs, especially amid skill shortages, may impact the recruitment of overseas talent.
Vanessa Ganguin, an attorney with GQ Littler in London, views the fee hikes as an additional upfront overhead for businesses recruiting internationally. Despite the concerns, the predicted increase in work visas over the next few years might persist due to the ongoing skills shortages in various sectors.
In addition to the visa fee increases, the IHS, a mandatory charge for immigrants using the U.K.’s National Health Service, is set to rise approximately 66%, reaching £1,035 in 2024. Ganguin highlights that this increase, along with prior hikes, significantly raises the financial burden on families. The rise in IHS has been tripled since its introduction at £200 in 2015.
Adam Sinfield, a lawyer with Osborne Clarke, notes that while the visa application fee hikes are impactful, other associated expenses, such as sponsorship certificates and immigration skills charges, contribute to the overall cost. The IHS increase per person each sponsorship year is deemed the most significant, affecting both businesses and applicants.
The higher costs associated with immigration applications prompt businesses to evaluate their budgeting and consider which expenses to absorb or pass on to employees. Businesses must weigh these decisions carefully, considering factors like the strength of the labor market, skills shortages, finances, and employee relations.
Sinfield suggests businesses also explore alternative visa routes, such as Scale-up Worker visas, and carefully consider potential discrimination issues. The dilemma arises as businesses reevaluate when to offer sponsorship and whether refusing sponsorship based on cost can be objectively justified. Employers are advised to seek legal advice before rejecting applications based on visa costs to navigate potential legal implications.
