Rishi Sunak announced on 13 July 2023 that the government intends to increase immigration fees and the Immigration Heath Surcharge (which is payable by migrants in return for access to the NHS) to help to fund the pay increases for public sector workers.  

The key changes which were announced include: 

• Fees in relation to work and visit visas will increase by 15%.
• Fees for student visas, assigning certificates of sponsorship, settlement, citizenship, other permission to stay, entry clearance applications and priority services are set to rise by a minimum of 20%.
• The standard Immigration Health Surcharge fee will increase from £624 to £1035 per year of the visa and the lower fee, payable by students and those under the age of 18, will increase from £470 to £776 per year of the visa. These increases will also apply to dependants. 
• The cost of student and priority service applications submitted from outside and inside the UK will be the same,  whereas it is currently cheaper to apply from within the UK in relation to several immigration categories. We therefore assume that there will be a higher increase in fees for those applications submitted from within the UK. 

There has not yet been any news as to whether the Immigration Skills Charge will be increased. This is payable by the employer for Skilled Worker and Senior or Specialist Worker applications, unless an exemption applies. The current rate is £1,000 per year of the visa (i.e. £5,000 for a five year visa), per sponsored employee for medium or large sponsors, or £364 per year of the visa for small or charitable sponsors.

What should individuals and employers do? 

These fee increases will have a significant impact on individuals wishing to come to the UK or who wish to extend their permission to stay, as the fee increases also apply to those who are already in the UK. 

Further, at a time when many employers are finding it difficult to fill vacancies and are increasingly relying on sponsoring non-UK/non-Irish nationals, this will also have a real impact on employers.

We recommend:  

• Employers and individuals submit any pending applications as soon as possible. It's not yet been announced when the higher fees will come into effect, but we would encourage individuals and employers to submit applications as soon as they can to try to avoid the fee increases. Immigration fees regulations are normally laid before Parliament at least 21 days before they take effect, but in certain circumstances the 21 day period may be departed from.
• In the case of sponsored employees, if it's possible to apply before the fees increase, employers should consider sponsoring the employee for five years from the outset, rather than three years, so as to avoid paying the higher fees to extend leave after three years.
• Employers make sure they carry out right to work checks at the point at which an employee's leave is due to expire. Unfortunately, there may be a higher risk that employees do not extend their leave given the high costs. Employers may wish to consider whether to offer a loan or financial assistance to employees. 
• Employers consider whether to include a clawback in the employee's contract requiring them to pay back some or all of the fees if the employee leaves earlier than planned. However, employers may not recover from the employee the cost of assigning the certificate of sponsorship or the cost of the Immigration Skills Charge.
• Employers consider the short and longer-term impact of these fee increases on their recruitment budgets and consider whether there are any alternative options to sponsoring non-UK/non-Irish nationals, such as training more settled workers.
• Employers take legal advice if they decide not to extend the sponsorship of an existing employee due to the increased costs as there is a risk that this could give rise to claims for unfair dismissal and/or indirect race discrimination.
• Employers take advice as to whether any exemptions may apply in relation to any of the fees or other costs. For example, lower application fees currently apply if the sponsored employee will be undertaking a role on the shortage occupation list. Also, employers do not have to pay the Immigration Skills Charge if they are sponsoring a national from an EU country under the Senior or Specialist worker route if the person normally works in the EU for an EU business but is temporarily transferring to work for a linked entity in the UK for less than 36 months.