UK Visa Application Fees to Increase by Up to 66%

By Sanwar Ali:

Table of Contents

1. Overview of the Fee Increase
2. Implications for Employers
3. The Rising Immigration Health Surcharge
4. Exemptions to the IHS
5. Detailed Fee Changes
6. Implementation Timeline
7. Employer Strategies
8. The Bigger Picture: Global Comparison
9. Conclusion

1. Overview of the Fee Increase

While full details will be provided in forthcoming regulations, the principal changes include:

• The Immigration Health Surcharge (IHS) will rise from £624 to £1,035 per year of visa for adults and £776 per year for students and minors.
• A 15% rise in visit and work visa application fees.
• A minimum 20% increase in fees for student visas, certificates of sponsorship, settlement, citizenship, and all other visa applications.
• The fee for priority services will be standardised for applicants applying both within and outside the UK.

Notably, the announcement made no mention of the Immigration Skills Charge (ISC), a tax on sponsors payable when employers allocate a certificate of sponsorship (COS).

2. Implications for Employers

The forthcoming fee hikes will undoubtedly impact employers, especially those that rely heavily on overseas talent. Some potential consequences include:

• Opting to leave certain roles vacant, a decision that could particularly affect the health and care sectors, significant users of the Skilled Worker route.
• Postponement or cancellation of UK relocations for recruited workers.
• Heightened employer lobbying for the addition of roles to the shortage occupation list, which offers access to discounted immigration fees.
• A rise in using immigration fee clawback agreements.
• Requests from existing employees for financial assistance with their immigration-related fees.
• Business continuity and right to work compliance challenges where employees cannot afford to extend their immigration permission.
• Delay or cessation of individuals' plans to secure British citizenship due to the high costs involved.

3. The Rising Immigration Health Surcharge

The significant increase in Immigration Health Surcharge IHS fees will have the most substantial impact on the overall cost of visa applications, especially for families. The IHS is a mandatory charge that ensures visa applicants have access to free healthcare in the UK via the NHS. The full amount must be paid upfront for the duration of the visa as a lump sum alongside other visa fees. The government has stated that the IHS hike will contribute to funding pay raises for doctors.

4. Exemptions to the Immigration Health Surcharge IHS

Not all visa applicants are subject to the IHS. Several categories of applicants are exempt, including:

• Applicants outside the UK applying for a visa for six months or less.
• Visitor visa applicants.
• Applicants for settlement or British citizenship.
• Applicants to the EU Settlement Scheme for pre-settled or settled status.
• Health and Care Worker visa applicants.

5. Detailed Fee Changes

The following table provides examples of the announced uplifts:

The ISC rate, currently standing at GBP 1,000 per year (i.e., GBP 5,000 for a five-year visa) per worker for medium or large sponsors or GBP 364 per year for small or charitable sponsors, has not been mentioned in the announcement.

6. Implementation Timeline

Although no official timeline has been disclosed, the government is expected to quickly start charging the higher fees. It is expected that Parliament will review the required regulations to implement the increases after their summer break, and it is likely that fee hikes will be put in place in late summer or fall of 2023.

7. What Can Employers Do Now?

The fee increases, coupled with the ongoing cost-of-living crisis, present a significant challenge for individuals and businesses alike. Here are a few strategies that employers can consider:

• Encourage employees or potential hires who are planning to apply for a UK visa in the coming months to expedite their application to take advantage of the current lower fees before the changes take effect. For instance, a worker applying for a 5-year visa could save just over £2,000 in IHS alone if they apply before the increase.
• Adjust recruitment budgets to account for the higher costs associated with hiring international talent.
• Establish a consistent policy regarding which visa costs the business will cover on behalf of workers. Note that in sponsored cases, it is illegal to require the applicant to pay for the Immigration Skills Charge ISC as this is something that employers have to pay.
• Consider implementing clawback agreements, which require the worker to repay a portion of the visa costs if they leave employment within a set time after visa approval.
• Even if your business does not support employees with any visa costs, workers may start to turn to employers for extra support to ease cash flow pressures at the point of visa application.

8. The Bigger Picture: Global Comparison

It's worth noting that UK visa fees are already among the highest globally. This new increase will further escalate these costs, placing an unjust burden on immigrants and employers. This move has sparked a debate on the fairness of such an approach, particularly considering that many other countries offer a more affordable and straightforward immigration process.

9. Conclusion

These proposed changes to the UK's visa application fees represent a sizeable financial challenge for businesses and individuals alike. As the details are finalised and implemented, it will be critical for all stakeholders to understand the implications and plan accordingly.

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