Sponsoring a foreign worker in the UK is a significant financial commitment for employers, with costs often reaching several thousand pounds. Since the UK's departure from the European Union, these expenses now apply universally to all overseas workers, including those from the EU, under the Points-Based Immigration System. In this blog, we will break down the various costs associated with sponsoring a skilled worker, highlighting key considerations for employers.
Cost of Obtaining a Sponsor Licence
The journey to sponsoring a foreign worker begins with obtaining a sponsor licence. The Home Office charges for this licence based on the size and type of organisation:
- £536 for charities or small businesses
- £1,476 for larger businesses.
The size of your organisation is determined by criteria, such as turnover, balance sheet total and the number of employees, as defined in the Companies Act 2006. Notably, this fee is a one-off payment, as sponsor licences no longer require renewal every four years, simplifying the financial planning for businesses.
Costs Involved in Sponsoring a Skilled Worker
Once you have a sponsor licence, several additional costs arise when hiring a skilled worker. These include the certificate of sponsorship, the Immigration Skills Charge, visa application fees and the Immigration Health Surcharge.
Certificate of Sponsorship
The certificate of sponsorship (CoS) is a critical document that an employer issues to a worker, enabling them to apply for a Skilled Worker visa. The cost for each CoS is £239.
Immigration Skills Charge
The Immigration Skills Charge is a tax levied on employers who hire foreign workers. The amount varies depending on the size of the sponsor:
- Small or charitable sponsors: £364 for the first year, plus £182 for each additional six months. For a five-year sponsorship, the total cost is £1,820.
- Medium or large sponsors: £1,000 for the first year, plus £500 for each additional six months. Over five years, this totals £5,000.
Visa Application Fees
Visa application fees vary depending on the length of the visa and whether the job is on the immigration salary list (previously known as the shortage occupation list). For workers applying from outside the UK:
- Up to three years (non-immigration salary list occupation): £719
- Up to three years (immigration salary list occupation): £551
- More than three years (non-immigration salary list occupation): £1,420
- More than three years (immigration salary list occupation): £1,084
These fees may differ for applicants already in the UK or under specific circumstances.
Immigration Health Surcharge
The Immigration Health Surcharge (IHS) is an additional tax levied on top of the visa application fee. It is charged at £1,035 per year of the visa. For a five-year visa, the IHS totals £5,175, significantly increasing the overall cost of sponsorship.
Who Bears the Costs?
Determining who pays for these expenses is a crucial discussion between the employer and the employee. While the law mandates that employers cannot pass the Immigration Skills Charge onto employees, other costs, such as the visa application fee and IHS, could be borne by the worker unless the employer agrees to cover them. It is essential to clarify these arrangements before proceeding with sponsorship.
Final Thoughts
Sponsoring a foreign worker in the UK is a considerable investment that requires careful financial planning. Employers must account for various costs, including the sponsor licence, Immigration Skills Charge, visa fees and the Immigration Health Surcharge. Understanding these expenses upfront can help businesses make informed decisions about expanding their workforce through overseas recruitment.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.