Immigration Health Surcharge increases: how acting now could save you money

Although the Government has announced changes to immigration policy and increases to fees, there is still time for businesses and schools to make significant cost savings if they act quickly.

Senior Associate Sarah Keeley outlines the changes and key dates employers and employees should be aware of.

What costs are increasing?

Visa application fees were increased significantly in October 2023.  However, the more significant cost increase – the increase to the Immigration Health Surcharge (IHS) – is not yet in force.  Throughout January 2024 and potentially longer it should still be possible to submit and pay for visa applications online that benefit from lower costs overall.

How much will the costs rise by?

The IHS is an annual fee paid by visa holders to allow them to access the National Health Service.  It is currently £624 per year for adults but is set to rise to £1,035 per year. 

It’s currently £470 per year for children, students, student dependants and individuals who have applied under the Youth Mobility Scheme route but will increase to £776 per year. Given that the IHS is paid by both the main visa holder and each dependant family member, and is paid upfront based on the length of the visa itself, the cost difference is substantial for both individual and families.

When will this happen?

The Government originally announced this increase would come into effect “no earlier than 16 January 2024”.  However, the increase still needs to be approved by Parliament on 10 January 2024, and would not take effect for 21 days after that date.   The change cannot therefore take place until February 2024 at the earliest.  

What should employees do now?

Employees still have time to make visa applications and secure their right to work in the UK for up to a further five years at a significant lower cost, provided their employer is willing to sponsor them.  

What action should employers take?

There is still time to consider your workforce needs and to bring sponsorship forward and make visa applications on the lower rates throughout January 2024 and potentially longer.    

Consider your existing workforce and whether you have any employees currently working for your organisation on the basis of a time-limited permission that you would want to retain in the long term.  Also consider if any expedited application in early 2024 would be beneficial for the organisation and the individual.  

It is not necessary to wait until any Graduate visa expiry date to consider sponsorship.  If you know you would like to retain the employee in the longer term, it could make financial sense to issue Certificate of Sponsorship to support a Skilled Worker visa application before the IHS comes into force (and certainly before the April 2024 changes significantly reduce the number of roles available for sponsorship).

This action is particularly necessary if their role is likely to be ineligible for sponsorship after April 2024 due to the general salary increases discussed here.