Immigration costs set to rise with introduction of immigration skills levy

Employers are urged to act now to minimise the immediate impact of the impending increase in UK immigration costs when the immigration skills levy (ISL) is introduced in April 2017.

The levy will be payable by employers that employ migrant workers in skilled roles under the Tier 2 sponsorship scheme. It will be set at £1,000 per employee per year, although small and charitable organisations will receive a reduced rate of £364.

The ISL was announced alongside a number of changes to the Immigration Rules following the Migration Advisory Committee’s January 2016 report, which advised the government on how to “significantly reduce the level of economic migration from outside of the EU”. In addition, it is anticipated that the immigration health surcharge will come into effect for Intra-company Transfer applications in April 2017. Visa application fees are also likely to increase in March or April 2017, constituting a further financial burden on employers and applicants.

The ISL will be imposed only on main applicants and will not affect dependent family members. However, the cost of a five-year Tier 2 sponsorship under the ISL alone is set to increase by £5,000. Essentially, it is designed to reduce demand on the scheme and result in additional opportunities for resident workers.

Both entry clearance and extension applications can be made up to three months in advance. Given the dramatic increase in cost, it is advisable for businesses to ascertain whether any forthcoming immigration applications can be accelerated and submitted before the levy is introduced.

For further information on this topic please contact City Legal Services by telephone 020 3695 4626 or email 

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