UK Immigration Skills Charge Guide 2025

UK Immigration Skills Charge (ISC) continues to be a critical financial consideration for employers sponsoring overseas talent. Since its introduction in 2017, the charge has grown not only in scope but in significance, especially with recent proposals for reform set out in the May 2025 immigration white paper. This guide provides a clear and detailed overview of when the charge applies, who qualifies for exemptions and when refunds may be available.

The Immigration Skills Charge is a mandatory fee imposed on UK employers when they sponsor overseas nationals under specific work visa routes, particularly the Skilled Worker visa and the Global Business Mobility (Senior or Specialist Worker) visa. The ISC is levied each time a Certificate of Sponsorship (CoS) is issued.

It was introduced to encourage employers to reduce dependency on migrant labour and instead invest in training and upskilling the domestic workforce. The funds are nominally earmarked for the Department for Education, though public scrutiny has increased around how transparently and effectively this money is allocated to meet the UK’s skills needs.

The ISC applies to any UK-based employer that sponsors a worker under the Skilled Worker or Senior or Specialist Worker routes. Employers must pay the charge every time a new Certificate of Sponsorship is issued, including for extensions and renewals.

However, the charge does not apply to dependants of sponsored workers, nor does it apply to individuals entering the UK under visa categories that fall outside the sponsorship system.

Currently, small or charitable sponsors pay £364 for the first 12 months of sponsorship. For each additional 6-month period, an extra £182 is charged. In contrast, large sponsors pay £1,000 for an initial 12-month period and £500 for every subsequent 6-month extension.

While these rates remain unchanged for now, the government has proposed a 32 per cent increase to the ISC as part of its 2025 immigration white paper. If adopted, this would significantly raise the financial burden on employers, particularly those seeking to sponsor workers through to settlement.

Several specific exemptions apply under the Immigration Skills Charge Regulations 2017 and the most recent Home Office guidance. These include:

• Roles that fall under eligible PhD-level occupation codes, such as scientific researchers, academics and clergy.
• Individuals switching from the student route to a Skilled Worker visa, provided the new role is with the same employer.
• Graduate trainees transferring within multinational companies under the Global Business Mobility route, provided the placement is under 12 months.
• Workers issued a Certificate of Sponsorship before April 2017 who have continuously held permission and employment.
• EU nationals sponsored under the Global Business Mobility route for assignments up to three years, where they are employed by an associated entity in the EU.
• Existing sponsored workers requiring a new CoS for the same role and duration.
• Worker seeking entry clearance for periods of less than six months.
• Individuals sponsored on the Scale-up route.

Failure to pay the ISC in full and on time will invalidate the Certificate of Sponsorship. This means that any associated visa application will be refused. The Home Office typically issues a formal payment reminder. If payment is not received within ten working days or three days in cases where priority processing applies, the visa application will not proceed.

Such delays can significantly disrupt recruitment timelines and impact business continuity, particularly where the role is business-critical.

Employers may be eligible for either a full or partial refund in several circumstances. A full refund will usually be issued if the visa application is refused, withdrawn or the worker does not commence employment and the CoS expires.

Partial refunds may be granted if:

• The worker is granted leave for a shorter period than requested.
• The worker resigns, changes sponsors, or stops working before the end of their sponsored period.
• The employer paid the higher charge in error

Conversely, employers may receive a request from the Home Office to pay additional charges, known as a “top-up”, if the original payment was undercalculated or the employer’s size classification was incorrect. Payment instructions are sent via email and processed through the designated payment portal.

Refunds are typically processed within 90 days via the Sponsorship Management System. If not received within this timeframe, sponsors should follow up with the Home Office.

Employers should seek legal guidance where any doubt exists around whether the ISC applies, or whether exemption criteria might be met. By treating the ISC as a core element of your business immigration strategy, you will be better placed to manage risks, remain compliant and plan responsibly for future growth.

With over 20 years of experience and a commitment to excellence, Morgan Smith Immigration is your trusted partner for all your immigration needs. Contact us today to learn more about how we can assist you with UK Visa Applications. For any enquiries or assistance, call us at 0203 959 3335 or email [email protected].