What Is the Immigration Skills Charge?

The Immigration Skills Charge (ISC) is a fee that UK employers must pay when sponsoring certain foreign workers under the UK immigration system. It forms part of the wider sponsorship framework administered by the Home Office and UK Visas and Immigration (UKVI), designed to encourage investment in training the domestic workforce while allowing employers to recruit skilled workers from overseas where necessary.

The charge applies to specific sponsored work routes and is payable in addition to other immigration costs such as the visa application fee and the Immigration Health Surcharge. It is not paid by the worker; it is a legal obligation on the sponsoring employer.

Legal Basis and Purpose of the Immigration Skills Charge

The ISC was introduced in April 2017 under UK immigration rules set by the Home Office. Its policy objectives include:

• Reducing reliance on migrant labour where domestic recruitment is possible
• Encouraging employers to invest in training UK-based workers
• Supporting long-term skills development in the UK economy
• Ensuring that immigration is used to fill genuine skills shortages

The charge is imposed on licensed sponsors when they assign a Certificate of Sponsorship (CoS) for eligible visa categories.

Who Must Pay the Immigration Skills Charge?

The ISC is paid by UK employers who hold a sponsor licence issued by UK Visas and Immigration (UKVI), part of the Home Office.

It applies when an employer sponsors a worker under certain visa routes, primarily:

• Skilled Worker visa
• Global Business Mobility: Senior or Specialist Worker route (and certain related intra-company routes)

The charge is payable each time a qualifying Certificate of Sponsorship is issued and is calculated based on the length of employment stated on the certificate.

How Much Is the Immigration Skills Charge?

The amount depends on the size and status of the sponsoring organisation.

Standard rate

• £1,000 per sponsored worker per year

Reduced rate (small or charitable sponsors)

• £364 per sponsored worker per year

Determining reduced-rate eligibility

Reduced rates generally apply to:

• Small businesses meeting statutory criteria
• Charities
• Certain public sector organisations

The total charge is calculated upfront based on the length of the visa sponsorship, up to a maximum period set by immigration rules.

How the Immigration Skills Charge Is Calculated

The ISC is charged per Certificate of Sponsorship and based on the duration of employment:

• If sponsorship is for less than 12 months, the charge is still generally calculated in 12-month blocks
• If sponsorship exceeds multiple years, the charge is multiplied accordingly
• The fee is payable in full at the time the CoS is assigned

Example:
A medium-sized employer sponsoring a worker for 3 years would typically pay £3,000 in ISC (3 × £1,000).

When the Immigration Skills Charge Does Not Apply

Certain immigration routes and circumstances are exempt from the ISC. Common exemptions include:

• Skilled Worker visas in certain health and care roles (subject to specific policy exemptions)
• Extensions for workers staying with the same employer in limited circumstances
• Some short-term or transitional arrangements under specific immigration rules
• Certain roles that fall outside ISC-liable visa categories

Exemptions depend on the immigration route and the exact nature of sponsorship, and employers must check eligibility carefully before assigning a Certificate of Sponsorship.

Employer Responsibilities and Compliance

Employers holding a sponsor licence regulated by the Home Office and UKVI must comply with strict sponsorship duties. These include:

• Ensuring the ISC is paid when required
• Keeping accurate sponsorship records
• Monitoring sponsored workers' immigration status and employment
• Reporting changes in employment circumstances via the Sponsorship Management System (SMS)

Failure to comply can result in enforcement action by the Home Office, including suspension or revocation of the sponsor licence.

Refunds of the Immigration Skills Charge

Employers may be eligible for a partial or full refund of the ISC in certain situations, such as:

• The worker's visa application is refused
• The worker does not start employment
• The worker leaves their role early (refunds may be pro-rated)
• A visa is granted for a shorter period than requested

Refunds are not automatic in all cases and are processed according to Home Office rules.

Practical Implications for Employers

The Immigration Skills Charge has significant cost implications for UK employers sponsoring overseas workers. It affects:

• Recruitment budgets for international hires
• Workforce planning for shortage occupations
• Long-term hiring strategies for skilled labour

Employers often factor ISC costs into overall sponsorship decisions alongside visa fees, legal compliance costs, and recruitment agency expenses.

Key Differences Between ISC and Other Immigration Costs

It is important to distinguish the ISC from other fees:

• Visa application fee: Paid by the worker (or employer in some cases) to apply for entry or leave to remain
• Immigration Health Surcharge (IHS): Paid by the worker for access to NHS services
• Immigration Skills Charge: Paid by the employer as part of sponsorship obligations

Each serves a different legal and policy function within the UK immigration system.

Common Issues and Risks

Employers may encounter compliance issues if:

• The incorrect ISC rate is applied
• A Certificate of Sponsorship is assigned without paying the charge
• Records of payment are not properly maintained
• Exemptions are incorrectly assumed

These issues can lead to compliance breaches under sponsor licence rules enforced by UKVI.

Key Takeaways

The Immigration Skills Charge is a mandatory employer fee applied when sponsoring certain foreign workers under UK immigration rules. It is designed to support domestic workforce development while regulating the use of overseas labour. The charge varies depending on employer size and is calculated based on the length of sponsorship. Compliance with ISC rules is a key requirement for maintaining a sponsor licence issued by the Home Office.