Are There Any Exemptions to the Immigration Skills Charge?

The UK government introduced the Immigration Skills Charge (ISC) in April 2017 to encourage businesses to focus on training and developing skills within the local workforce. This fee is required for employers who sponsor skilled workers from overseas to fill vacancies in the UK.

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While the ISC applies to most employers, there are specific exemptions to the charge for specific roles. Understanding these exemptions is crucial for companies that frequently hire skilled workers through sponsorship, as it can reduce the overall cost of employment.

So, who exactly is exempt from paying the Immigration Skills Charge? Let’s explore the details.

Who is Required to Pay the Immigration Skills Charge?

The Immigration Skills Charge (ISC) applies to employers who hire skilled migrant workers to fill roles in the UK, typically under specific visa routes. These employers must pay the ISC when they sponsor an overseas worker for more than six months unless an exemption applies.

The charge primarily affects companies using the following visa categories:

Skilled Worker Visa: This visa allows employers to hire non-UK residents, including non-EEA nationals, for roles that meet the government’s criteria for skilled work.
Global Business Mobility (GBM) Senior or Specialist Worker Visa: This visa enables businesses to transfer senior or specialist employees from overseas branches to the UK. Unless exempt, the employer must pay the ISC when assigning a Certificate of Sponsorship to these workers.

Employers fall into two categories for ISC payments:

Large Sponsors need to pay £1,000 per sponsored worker each year.
Small Sponsors or Charities pay £364 per sponsored worker every year.

Also read: What Is the Immigration Skills Charge and Who Is Required to Pay It?

Exemptions to the Immigration Skills Charge

While the Immigration Skills Charge (ISC) is a key cost factor for many employers who sponsor overseas workers, several exemptions can alleviate this financial burden. Under Regulation 4 of the Immigration Skills Charge Regulations 2017, specific circumstances allow sponsors to avoid paying the ISC.

Exemption include:

Certain PhD-Level Occupations

Employers are exempt from paying the ISC when sponsoring workers in certain PhD-level roles. These include professions such as scientists, higher education teaching professionals, research and development managers, and specific sports players and coaches.

These occupations include:

Student Visa to Skilled Worker Visa

If a worker switches from a student visa to a skilled worker or senior/specialist worker visa, the employer is exempt from paying the ISC. This exemption also applies if the worker extends their stay in the same role with the same sponsor after making the switch.

Certificates of Sponsorship Issued Before 6 April 2017

If a worker was assigned a Certificate of Sponsorship before 6 April 2017 and continues to hold permission as a skilled worker in the same role, the sponsoring employer is exempt from paying the ISC.

EU Nationals and Latvian Non-Citizen Passport Holders

Workers who are EU nationals or hold a Latvian non-citizen passport are exempt from the ISC if they are sponsored under the Global Business Mobility Senior or Specialist Worker route and were issued a Certificate of Sponsorship on or after 1 January 2023.

Additionally, this exemption applies if the worker is temporarily transferred to the UK for no more than 36 months to work for the sponsor’s UK-based business.

Short-Term Assignments (Less Than 6 Months)

If a worker is being sponsored to enter the UK for a role that lasts no more than six months, the ISC does not apply. This exemption is helpful for businesses that need to bring in specialists or skilled workers for short-term projects.

Dependants of Sponsored Workers

Employers are not mandated to disburse the ISC for any dependants of the sponsored worker, such as a spouse or children. The ISC only applies to the primary worker.

Employers can strategically manage the costs of sponsoring overseas talent by understanding and utilising these exemptions.

Can I Get a Refund for the Immigration Skills Charge (ISC)?

In some cases, businesses can receive a full or partial reimbursement of the Immigration Skills Charge (ISC) paid for sponsoring an overseas worker. The Home Office typically processes refunds within 90 days, but the refund is only granted under specific conditions. Here are the situations where you might qualify for a refund:

Non-Commencement of Employment: If the company notifies the Home Office that the sponsored worker never started employment, a refund can be requested.
Payment Made in Error: Businesses can claim a refund if the ISC payment was made incorrectly.
Unused Certificate of Sponsorship (CoS): If the Certificate of Sponsorship issued by the company isn’t used to support the worker’s visa application, the business is eligible for a refund.
Shorter Visa Duration: If the worker is granted a shorter visa than the sponsorship period, the business can request a partial refund for the difference.
Visa Application Refused or Withdrawn: If the worker’s visa application is denied by the Home Office or cancelled before approval, the sponsoring employer is qualified for a refund.
Early Termination of Job: A refund may be issued for the remaining span if the worker departs the job before the end date listed on their Certificate of Sponsorship.

Note that a refund is not available if the worker remains employed with the sponsor but changes their role within the company. By being aware of these scenarios, employers can manage their ISC payments more effectively and ensure they receive a refund when applicable.

You can read: How to Tell if You’re a Small or Charitable Sponsor

Let Our Experts Help You

Our experts at Sponsor Licence Lawyers can simplify your sponsor licence application, ensuring it’s accurate and meets all requirements. We can also help with compliance, documentation, and legal obligations so you can focus on your business operation.

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FAQs

No, not all employers are required to pay the ISC. Employers sponsoring workers in exempt categories, such as those switching from a Student Visa to a Skilled Worker Visa or in short-term assignments under six months, are exempt.

Yes, certain roles may be exempt from the immigration skills charge if they fall under categories deemed critical for the UK economy, as specified in the immigration skills charge regulations.

Not every employer is required to disburse the fee. Employers sponsoring workers who fall under certain exemptions, such as those on the Global Business Mobility Senior or Specialist Worker route, may be exempt from the Immigration Skills Charge.

Failure to pay the immigration skills charge when required can cause a worker visa application refusal.

Yes, refunds are available in specific situations, such as if the worker doesn’t start employment, their visa is refused, or they leave their job early. Employers should contact the Home Office to apply for refunds.

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Disclaimer

Our articles serve as general guidance and should not be considered legal advice. We do not accept liability for any consequences resulting from reliance on the information provided in our written materials. All readers should seek professional counsel before making any decisions or taking action based on our articles. If you require further assistance, please don’t hesitate to contact us directly for consultation with a qualified professional.

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