The Immigration Skills Charge (ISC) is a mandatory fee imposed on UK employers each time they sponsor a worker under the Skilled Worker visa or the Senior or Specialist Worker visa. This charge is designed to encourage employers to invest in training and upskilling the domestic workforce, rather than relying on skilled migration.
Given the increasing financial and regulatory burden of employing migrant workers, it is critical that businesses understand when the ISC applies, how much they must pay, and what exemptions exist. Failure to comply with ISC obligations can result in visa refusals, delays, and potential sponsorship compliance breaches.
Below, we provide a detailed analysis of the ISC, including practical guidance on calculating costs, meeting compliance obligations, and avoiding penalties.
What is the Immigration Skills Charge?
The Immigration Skills Charge (ISC) is a fee that UK employers must pay when sponsoring skilled workers from overseas. It was introduced on 6 April 2017 under the Immigration Skills Charge Regulations, with the aim of reducing reliance on migrant labour by incentivising investment in the UK’s domestic workforce.
Funds raised from the ISC are directed to the Department for Education to support training and skills development. The requirement to pay the ISC has become increasingly relevant since 1 January 2021, when the end of free movement resulted in all employers needing a sponsorship licence to hire non-UK workers.
When Does the Immigration Skills Charge Apply?
Employers must pay the ISC when sponsoring a worker under the Skilled Worker visa or the Global Business Mobility: Senior or Specialist Worker visa if:
- The worker will be employed in the UK for six months or longer.
- The worker is applying from inside the UK, even if the visa is for less than six months.
- The employer is extending the worker’s employment and issuing a new Certificate of Sponsorship (CoS).
The ISC is not payable for dependants of sponsored workers.
Immigration Skills Charge Exemptions
Certain exemptions exist, and employers should assess each sponsorship scenario carefully to determine whether they are liable for the charge.
A sponsor is not liable for the ISC if the worker falls into one of the following categories:
- Specific Occupation Codes
The ISC is waived for certain highly skilled roles, including:- Chemical scientists
- Biological scientists and biochemists
- Physical scientists
- Social and humanities scientists
- Research and development managers
- Higher education teaching professionals
- Clergy
- Professional sports players and coaches
- Workers Switching from Study Routes
Employers do not need to pay the ISC if sponsoring an individual who is switching from a Student visa to a Skilled Worker visa while inside the UK. - Global Business Mobility: Senior or Specialist Worker Route (EU Nationals)
Employers are exempt from the ISC when sponsoring an EU national under this visa, provided:- The CoS was assigned on or after 1 January 2023.
- The worker will be in the UK for up to three years.
- The worker is already employed at the sponsor’s EU office or a linked EU business.
- Assignments Prior to 6 April 2017
If a worker was issued a Certificate of Sponsorship before 6 April 2017 and has continuously held a skilled worker visa since then, their employer remains exempt from paying the ISC.| - Short-Term Assignments
The ISC is not payable for workers who will be in the UK for less than six months. - Extensions Without Additional Time
If a sponsor issues a new CoS but does not extend the worker’s leave, the ISC is not payable.
How Much is the Immigration Skills Charge?
The ISC operates on two levels, depending on the size of the employer:
- Large sponsors: £1,000 per year per sponsored worker.
- Small businesses and charities: £364 per year per sponsored worker.
For sponsors classified as medium or large businesses, the charge increases by £500 for every additional six months beyond the first year.
For smaller sponsors or charities, the first 12 months cost £364, with an additional £182 for every six-month extension.
Calculating the Total Immigration Skills Charge
| Period of Employment (as stated on CoS) | Large Sponsor (£1,000/year) | Small Sponsor (£364/year) |
|---|---|---|
| 12 months or less | £1,000 | £364 |
| 18 months | £1,500 | £546 |
| 24 months | £2,000 | £728 |
| 30 months | £2,500 | £910 |
| 36 months | £3,000 | £1,092 |
| 42 months | £3,500 | £1,274 |
| 48 months | £4,000 | £1,456 |
| 54 months | £4,500 | £1,638 |
| 60 months | £5,000 | £1,820 |
When is the ISC Paid?
Employers must pay the ISC before submitting the worker’s visa application. The visa will not be processed until full payment is received.
If a worker changes job roles within the same organisation but requires a new Certificate of Sponsorship, the employer must pay the ISC again for the new period of leave.
What Happens if the ISC is Not Paid?
Failure to pay the ISC in full will result in:
- Visa application refusal or delay.
- Invalidation of the Certificate of Sponsorship.
- A Home Office reminder requiring full payment within 10 working days.
If payment is not made within the deadline, the application will be refused.
Can the Immigration Skills Charge Be Passed on to the Employee?
No. The Home Office strictly prohibits passing the ISC cost to the employee. It is an employer obligation and cannot be recouped through salary deductions or clawback clauses. Employers found in breach of this rule may face licence suspension or revocation.
Is the Immigration Skills Charge Refundable?
A full or partial refund of the ISC is available in limited circumstances, including:
- The visa application is refused or withdrawn.
- The worker does not take up employment after receiving their visa.
- The worker switches sponsors before their CoS expires.
Refunds are processed within 90 days via the Sponsorship Management System (SMS).
Other Costs of Sponsoring a Worker
In addition to the ISC, employers must also budget for:
- Sponsor licence application fees (£1,476 for large sponsors, £536 for small sponsors).
- Certificate of Sponsorship issuance fee (£239 per worker).
- Visa application fees and Immigration Health Surcharge.
Need Legal Advice?
The Immigration Skills Charge is just one of many costs and compliance obligations employers must meet when sponsoring migrant workers. With Home Office enforcement on the rise, ensuring compliance is critical to avoid fines, delays, or sponsor licence revocation.
For specialist legal advice on ISC exemptions, compliance audits, or sponsorship applications, contact us today.
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