Relocating workers to the UK will become significantly more expensive this month, due to the changes introduced by the UK's Home Office and approved by the UK Parliament in September. The latest pricing updates, which increase visa fees by 15-20%, will apply to various types of visas including short and long-term visits, work sponsorships, and priority services.
The government ascribes the need for increased visa fees to the high cost of managing their borders and the administration overhead of issuing over 2.8 million visas a year. These revisions have made the UK’s upfront immigration fees pricier than many countries including the US, Canada, Germany, and Spain.
Find out more about the changes to visa fees, how they will be implemented, and how they will affect individuals seeking employment in the UK as well as employers.
Overview of UK Visa Pricing Changes
The recent changes, introduced by the Home Office and approved by the UK Parliament are the latest updates to the cost of UK visas, which have risen steadily over the last 20 years.
These changes will affect visas in a broad range of categories and lengths, including visit visas, health and care visas, plus most entry clearance fees and case-specific leave applications to remain in the UK, including those for work and study purposes.
Specific Changes in Fees
Price changes for various UK visas came into effect on the 4th of October 2023. We highlight the affected visa pricing as follows:
Tier 2 General Visas
One of the most affected categories is the Tier 2 (General) visa, which allows skilled workers to come to the UK for employment. The cost of this visa has increased by 2.5%, making it more expensive for employers to sponsor foreign workers. This could deter employers from hiring international talent, as the higher costs may not be justifiable for some businesses.
Work Visas Applied For From The UK
The pricing for a short stay of up to six months rises 15% from £100 to £115. Fees for 2, 5, and 10-year visit visas will undergo a similar increase, to £400, £771, and £963 respectively. Settlement fees are increasing from £1,538 to £1,846 for a 20% increase while citizenship (naturalization) prices will spike by 20% from £1,250 to £1,500. Super Priority service within the UK increases by 25% from £800 to £1,000.
Work Visas Applied For From Outside The UK
Skilled worker visas (3 years or less) from outside the UK will see a similar 15% rise in fees from £625 to £719. Priority services outside of the UK for routes not leading to settlement will increase in price by 100% from £250 to £500.
Post-Study Work Visa
The fees for the Certificate of Sponsorship for Skilled Workers will increase by 20% from £199 to £239.
Tier 2 Intra-Company Transfers
The Tier 2 (Intra-company Transfer) visa, which enables multinational companies to transfer their employees to the UK, has also seen a price increase of 2.5%. This could pose a challenge for companies with global operations that rely on bringing in talent from their overseas offices. The higher costs may lead to a reduction in intra-company transfers, limiting opportunities for employees to gain international experience and contribute to the UK economy.
Impact of Visa Changes for Employees and Employers
The increase in prices will make it more costly for employers to relocate their employees to the UK, these fees will need to be factored into immigration and global mobility budgets to assist new or existing employees with their relocations. These increases are set to significantly impact businesses' ability to attract and retain top talent from around the world.
The visa fees amendment requires employers to reevaluate the overall fees of relocating their talent and new hires to the UK. These include a 20% spike in optional priority processing fees for applications made in the country or during entry clearance.
Accounting for the Immigration Health Surcharge fees (IHS)
Also, employees need to factor in other immigration changes. These include the immigration health surcharge fees (IHS) which have two separate structures, the normal rate and discounted amount for students and individuals below the age of 18. While any individual applying for a work visa longer than six months must pay for the IHS, there are some notable exemptions, such as an applicant for a visitor visa and an applicant for settlement or British citizenship.
Increasing Immigration Skills Charge (ISC) fees
Employers also usually have to factor into their budgets the Immigration Skills Charge (ISC), a sponsor tax usually managed by employers when they cover an employee's relocation process. While this charge was not increased at the same time as visa fees, there are plans to increase the ISC significantly, from £624 to £1,035 for normal applications and £470 to £776 for the discounted category. There is no date announced for this significant price increase, so it may be advantageous for employers to expedite their worker’s UK relocation before these additional fees come into effect.
The high visa fees would add to the growing number of employees immigrating to the UK and the difficulties of integrating into the local community. These are on top of the GBP’s strength compared to other currencies and the No Recourse To Public Funds (NRPF) visa condition. Employees need to broadly consider the factors of relocating to the UK by discussing with employers and adapting their budget accordingly.
“With the UK just getting more expensive, talents from outside the UK are going to look for countries where the relocation is the most effective, they may be reluctant to relocate to the UK and instead, look towards Europe, the United States and Canada. For UK employers this also means focusing on talent already based within the UK,” says Humza Hussain, UK Case Manager at Localyze.
Preparing for the Future of UK Relocation
With the economic uncertainties surrounding Brexit and the talent shortage in many sectors, the ability to attract and retain skilled workers from overseas has become crucial. The increased costs of visas further complicate the hiring process and may hinder businesses' efforts to recruit the best talent.
To navigate these challenges, employers can partner with global mobility experts like Localyze. With a strategic global mobility approach, Localyze can guide businesses and their talents through the complexities of UK visa immigration and relocation, ensuring a smooth transition for all.
Want to discuss how to manage your UK employee relocation and hiring strategy? Get in touch with us!
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