The UK Immigration Skills Charge (ISC) is an important consideration for employers looking to hire skilled workers from outside the UK. This charge applies to businesses sponsoring workers under various visa categories, including the Skilled Worker visa. Understanding the ISC can help you plan your hiring strategies and budget more effectively, ensuring you can attract the talent needed for your organisation’s growth.
Since its introduction in April 2017, the ISC aims to encourage employers to invest in local talent while also filling skill gaps that cannot be met by the domestic workforce. As an employer, you play a key role in this process, and being aware of the fee structure and exemptions can offer significant advantages.
Navigating the complexities of UK immigration can be challenging, but knowing how the Immigration Skills Charge impacts your hiring decisions is essential. This knowledge not only aids in compliance but also helps you make informed decisions about your workforce and future growth.
Overview of the UK Immigration Skills Charge
The Immigration Skills Charge (ISC) plays an important role in the UK immigration system. It requires employers to pay a fee when sponsoring foreign workers, and it aims to support the development of the local workforce. Understanding its components is crucial for employers who plan to hire overseas talent.
Understanding the ISC and Its Purpose
The Immigration Skills Charge is a fee introduced in April 2017. This charge aims to encourage UK employers to invest in training the domestic workforce. It reflects the government’s strategy to manage skills shortages while ensuring that businesses contribute to the growth of local skills.
The ISC helps ensure that when employers hire overseas workers, they also play a part in developing the skills of UK residents. It is a way of balancing the needs of the economy with the goal of improving local employment opportunities.
Determining Who Needs to Pay the ISC
Not every employer needs to pay the Immigration Skills Charge. You will be required to make this payment if you are sponsoring an overseas worker under certain visa categories, such as the Skilled Worker visa.
Some exemptions apply. You do not need to pay the ISC if:
- The worker is applying for less than six months.
- The worker is switching from a student visa to a Skilled Worker visa.
- The worker is in specific PhD-level jobs.
- You qualify as a Scale-up sponsor.
These circumstances help ease the financial burden on employers in specific situations.
Calculation and Payment of the ISC Fee
The cost of the Immigration Skills Charge varies based on the size of your business. For small businesses, the charge is:
- £364 for one year
- £182 for six months
Large businesses, on the other hand, pay:
- £1,000 for one year
- £500 for six months
Employers must ensure that this fee is paid for a minimum of six months. You cannot split the payment over shorter periods. Knowing this can help you budget accordingly when planning to hire international talent.
Certificate of Sponsorship and Visa Application Process
The Certificate of Sponsorship (CoS) is a crucial document for employers sponsoring workers from outside the UK. It serves as proof that you have offered a job, and it’s necessary for the visa application process. Understanding the details related to the CoS, the visa categories that require it, and compliance aspects is essential for successful hiring.
Role of the Certificate of Sponsorship (CoS)
The Certificate of Sponsorship (CoS) is essential for any worker seeking a UK visa under certain categories. This document is unique and contains a reference number linked to both the employer and the employee.
You must assign a CoS once you have a valid sponsor licence. It confirms that you are offering a genuine job to a qualified candidate. The CoS specifies details such as the job title, salary, and employment start date, which helps in determining the eligibility for visa application.
The CoS is not transferable. If your candidate’s circumstances change, a new CoS must be obtained. It’s crucial to ensure all information in the CoS is accurate to avoid issues during the visa application process.
Visa Categories Requiring CoS and ISC
Several visa categories require a CoS and may also involve the Immigration Skills Charge (ISC). The most common category is the Skilled Worker Visa, which allows skilled individuals to work for an approved employer.
Other categories include the Global Business Mobility visas, which support international business activities, and roles under the Charitable Sponsor umbrella. Each category has specific requirements, so thorough knowledge of these is necessary.
The ISC is a fee that must be paid by employers when hiring non-UK nationals. The fee differs based on the size of your organisation, with small employers or charities paying less than larger businesses. Understanding these details helps in budgeting for the overall costs of hiring international talent.
Compliance and Sponsor Licence Requirements
To sponsor an employee, you must possess a valid sponsor licence. This involves meeting several compliance criteria set by the UK Home Office. Keeping accurate records for all sponsored employees is essential for maintaining your licence.
You must ensure that the job offered meets the skill and salary thresholds. Regular audits may occur, and maintaining compliance can prevent your sponsor licence from being revoked.
Staying informed about the requirements and regulations surrounding the CoS process is vital. Failure to comply can lead to penalties and affect your ability to hire international workers in the future.
Exemptions and Refunds
You may not have to pay the Immigration Skills Charge (ISC) in certain situations. Understanding these exemptions can save your organisation money. Additionally, if you’ve already paid the ISC under the wrong circumstances, there are ways to claim a refund.
Identifying Exemptions from the ISC
Several exemptions may apply to your situation. You do not need to pay the ISC if:
- The worker is applying from outside the UK for less than six months.
- They are switching from a student visa to a Skilled Worker visa.
- The position is in a PhD-level occupation.
- You are a Scale-up sponsor.
- The worker had a Certificate of Sponsorship (CoS) assigned before 6 April 2017 that led to an entry grant.
These exemptions are particularly important for charities and small businesses with limited resources. Knowing these rules can make a significant difference in your financial planning.
How to Claim a Refund or Partial Refund
If you find that you have mistakenly paid the ISC, you can apply for a refund. To do this, you need to follow these steps:
- Check your eligibility: Ensure that your case fits the exemption criteria.
- Gather necessary documents: Collect any paperwork related to your payment and the worker’s visa application.
- Submit your request: Contact the Home Office or use the online service to apply for a refund.
- Await response: The processing time can vary, so you might need to be patient.
Partial refunds might be available if the worker’s visa duration changed after payment. Ensure to keep track of any changes for a smoother refund process.
Impact on Employers and the Domestic Workforce
The Immigration Skills Charge (ISC) directly affects your decision-making as an employer when hiring foreign workers. If you sponsor a skilled worker, you must pay this charge, which can be a significant cost, especially for large sponsors.
By incentivising the training of local talent, the ISC aims to boost the domestic workforce. This helps shift focus from relying on foreign workers to developing the local workforce through training and development initiatives.
Key Considerations for Employers:
- Compliance: You need to stay updated on immigration regulations to avoid penalties.
- Costs: The ISC increases your recruitment expenses, impacting your budgeting.
- Skill Development: Investing in local employees can lead to a more skilled workforce.
Smaller sponsors may face a heavier burden from the ISC. They might find it challenging to balance the costs of compliance while competing for top talent.
On the other hand, investing in workforce development through training can create a more resilient and versatile team. Over time, this may reduce dependency on foreign labour.
Summary:
The ISC pushes you toward a more sustainable workforce model, promoting domestic skills while managing the complexities of foreign recruitment. Embracing this change can strengthen your business in the long run.
Need an immigration advice? Get in touch with Bucks Legal to speak to one of our immigration advisers to explore options for your partner visa. Our global business visa experts are here to advise.