What is the Immigration Skills Charge (ISC)?

The ISC applies to UK employers who sponsor overseas workers through either the Skilled Worker visa route or the Senior or Specialist Worker visa route. However, there are various exceptions to this policy, which are detailed below.

The ISC does not apply in the following cases:

• If you’re applying from outside the UK and the worker is sponsored for less than 6 months.
• If the specified job role falls within a limited range of occupation codes, which are typically research or science-related.
• If you’re sponsoring a worker who was assigned a certificate before 6 April 2017.
• If a sponsored worker within your organisation is changing job roles but not extending the length of their Skilled Worker Visa.
• If you’re sponsoring a worker who is currently on a student visa For dependents of the main applicant, regardless of whether they need to pay the ISC.

It’s also important to note that small and charitable sponsors also qualify for a partial exemption by way of paying a significantly reduced fee. See the costs section for further details.

The cost of the Immigration Skills Charge depends on the size of the employer and the length of the employee's sponsorship. Employers are categorised into two groups: large sponsors and small sponsors.

A sponsor is considered small if it meets at least two of the following:

• Annual turnover of £10.2 million or less
• Total assets of £5.1 million or less
• Fewer than 50 employees

Registered charities are automatically considered to be small sponsors.

For large sponsors, the current ISC charge is £1,000 per sponsored worker per year. For example, a Skilled Worker on a 3-year visa would incur a £3,000 ISC charge.

For small sponsors or charitable sponsors, a reduced charge of £364 per sponsored worker per year applies. The same Skilled Worker on a 3-year visa for a small or charitable company would incur a £1,092 ISC charge.

In the recent UK Government's immigration white paper, a 30% increase in the ISC charge was detailed. While there’s no doubt the increase is coming, an effective date has not yet been disclosed. As the ISC charge is paid upfront when the Certificate of Sponsorship (CoS) is issued, we would recommend applying for any CoS’s as soon as possible to beat the rise. A CoS is valid for 3 months from the date of issue.

The ISC is payable upfront, at the point when the Certificate of Sponsorship (CoS) is assigned to the prospective worker. The payment must be made via the Sponsor Management System (SMS) when assigning a CoS. The total amount payable corresponds to the length of sponsorship stated in the CoS and your classification as a large or small sponsor.

The payment is refundable when a visa application is refused or withdrawn, or if the sponsored worker does not start the job. A full refund is also available if the ISC was paid in error, or if the CoS is not used and expires. Partial refunds may be available if there is an overpayment or if the visa is granted for a shorter period than initially requested. Refunds are automatic in many cases, but may also need to be requested via the SMS or UK Visas and Immigration (UKVI).

The ISC represents a significant cost for employers, especially those hiring multiple overseas workers for extended periods. While it's a tool to boost domestic skills training, for employers, it adds another layer of financial planning and compliance when hiring from abroad.