The Tier 2 Immigration Skills Charge (ISC) was introduced by the Home Office on the 6th April 2017. The charge is payable when an employer sponsors an employee on a Tier 2 visa. If the organisation or business holds a Tier 2 sponsor licence and intends to sponsor a worker on a Tier 2 visa, they should consider whether the ISC is payable or exempt.
Under what circumstances are the ISC to be charged?
The ISC is applicable to a Tier 2 worker who is assigned a Certificate of Sponsorship (COS) on or after the 6th April 2017 in the Tier 2 (General) or Tier 2 (Intra Company Transfer) routes unless one of the following exemptions applies:
- If the worker was sponsored on a Tier 2 (General) or Tier 2 (ICT) visa by you or another sponsor before the 6th April 2017 and you are assigning a COS to them, they can make an application from inside the UK to extend their Tier 2 stay with you, or switch to your employment from a different sponsor;
- If the sponsored worker is applying from outside the UK for a visa that is for less than 6 months – for example, if you are sponsoring a worker to the UK for 5 months on a Tier 2 (ICT) visa;
- If the worker is applying for a Tier 2 (Intra-Company Transfer) Graduate Trainee visa;
- If the worker is a Tier 4 student visa holder who is switching immigration category inside the UK to a Tier 2 (General) visa; or
- If the worker is being employed to do a PhD level role (that is, a role that falls under SOC code 2111, 2112, 2113, 2114, 2119, 2150 or 2311).
How much does ISC cost?
The amount of the charge payable depends on the size and nature of the sponsor and the length of the COS assigned. The ISC payable is £364 (per person per year) for small organisations or those with charitable status. If you are a large organisation, the ISC payable is £1,000 (per person per year).
When does ISC need to be paid?
The ISC is payable at the same time when you pay to assign the COS.
Can the company pass the cost on to the worker?
No – it specifically states on the Tier 2 and 5 Guidance that the ISC must not be passed on to the worker.
Does ISC apply on Tier 2 worker’s family members?
ISC does not apply to the family of the worker being sponsored on Tier 2 visa.
Can I get a refund if the employee leaves?
The Tier 2 sponsor guidance confirms that a partial refund will be made if:
- The Tier 2 Visa was refused;
- The worker does not turn up for employment;
- The Sponsor or worker withdraws the application or sponsorship;
- The Tier 2 Visa is granted for less than the period requested on the COS. For example where a 3-year visa was applied for but a 1-year visa is granted;
- The worker starts work and then voluntarily changes to another sponsor – the first sponsor will be paid for the “unused” time; or
- If the worker leaves their job early (except where the visa is curtailed for breach of any conditions attached to the visa).
It should be noted that a partial refund will be in made for each “unused” 6-month period of leave after the first year deduction.