As our previous immigration developments article highlighted, the Government has now confirmed that the increase in the Immigration Health Surcharge (IHS) will come into force in January 2024.   

As a reminder, the IHS is payable by anyone coming to the UK for more than six months, giving them access to the same NHS services as UK nationals and permanent residents.  The IHS must be paid upfront when an applicant submits an application to enter or remain in the UK, at the same time as other immigration fees. In contrast to certain charges (such as the Immigration Skills Charge), employers are not required to pay this charge, though it is common for employers to include the charge as part of an employee’s employment package.

The IHS is set for a huge increase of around 66%, from the current rate of £624 per person per year to £1,035 per person per year. The discounted rate for students and those under 18 is also increasing from £470 to £776 per person per year.

In light of this, employers should:

  • consider the impact this fee  increase will have on recruitment budgets – look ahead to foreseeable recruitment needs to identify whether to continue in light of the increased expenditure or whether to bring recruitment plans forward to avoid higher charges;
  • review sponsorship needs and submit applications for initial sponsorship, extension and/or settlement ahead of the fee rises;
  • consider applying for the maximum duration of five years’ sponsorship to take advantage of a lower IHS throughout the duration of the applicant’s stay in the UK; and
  • review Certificate of Sponsorship (CoS) allocations and request increases so that employers can obtain the right number of CoS ahead of the increase date – consider using the Priority Change of Circumstance service to ensure approval is received within days, not weeks.

Further, many employers currently implement clawback agreements when sponsoring new hires, which allow businesses to claim back any immigration costs paid to the personal benefit of the employee in the event that their employment ends within a certain period of time. The amount that an employee is obliged to repay usually decreases on a sliding scale over the specified time period. Employers who do not already have such protection in place may wish to implement such agreements moving forward in light of the IHS increase.

For sponsorship licence holders, this change could have a big impact:  for practical guidance and assistance, get in touch with a member of our Immigration Team.


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