Increase in immigration fees

UK immigration fees will increase at 9:00am on 4 October 2023. The proposal for the fees was announced this July.

The increased fees are intended to partly fund public sector pay increases and will affect employer sponsors as well as individuals who apply to come to live and work in the UK.

The most significant changes include:

• Work and visit visas will increase by 15%;
• priority processing for non-settlement applications will increase by 100%, from £250 to £500;
• optional super priority service for in-country applications will increase by 25%, from £800 to £1,000;
• indefinite leave to remain application fees will increase by 20% from £2,404 to £2,885;
• fees to register or apply for British citizenship will increase by 20%;
• the fee for an Electronic Travel Authorisation (ETA) has also been set at £10; and
• the Immigration Health Surcharge is also set to increase from £624 per year to £1,035 per year. However, this remains subject to Parliamentary approval. It is not anticipated this rise will come into force on this year.

Impact on employers

Employers who sponsor workers should be mindful of these fees and take appropriate action such as reviewing upcoming applications and submitting these ahead of the price increase if possible.

Employers should consider business continuity and right-to-work compliance issues where an existing employee is unable to extend their immigration permission due to unaffordability.

The ETA will not be rolled out until 2024, but applications can be made from 25 October 2023. As the £10 fee has been confirmed, employers can start to estimate potential impacts on their budgets based on the average number of visitors the business invites to the UK annually. Policies should also be put in place to cover when the business will cover ETA costs for visitors.

Comment

Some of these fee increases are substantial and as employers will need to accommodate higher recruitment costs going forward, they may need to alter how the visas are funded. One approach is to consider implementing clawback agreements, which would require a worker to repay a portion of the visa fees if they leave employment within a set period of time. Employers should ensure these agreements are reasonable in order to be enforceable.

In the short term, the increase in fees means employers and employees alike will find it more financially challenging to work in the UK. It could be that the UK is increasingly pricing itself out of the international labour market.