Cost of sponsor licence

The cost of a skilled Sponsor Licence

On April 06, 2021 | In Sponsor Licence | By A Y & J Solicitors

Over the recent years, the Government has frequently increased the costs incurred by organisations seeking to sponsor individuals to work in the UK. Here, we take a look at the exact sponsorship costs for skilled workers. 

Organisations should be aware of the associated costs of skilled worker sponsorship at the outset to ensure that it is a feasible option. Of course, the costs associated with using specialist recruitment agencies can also be significant, and, in many cases, the cost of sponsorship may be worthwhile vs specialist recruitment agent’s fees.

Skilled Worker Sponsorship

Organisations that wish to sponsor workers will first need to apply to the Home Office to obtain a Sponsor Licence. Once an organisation holds a sponsor licence, it will then be able to sponsor non-EEA nationals and EU citizens to do the skilled roles.

The Home Office costs

The costs associated with the sponsor licence depend on whether an organisation is considered a small company or a medium/large company.  An organisation will be deemed a small company if it meets the definition set out within Section 382 of The Companies Act 2006. To meet this definition, two out of the following three requirements must be met:

  • The company must have a turnover of no more than £10.2 million.
  • The company must have a balance sheet total of no more than £5.1 million.
  • There must be no more than 50 employees.

If an organisation meets at least two requirements, it will be classed as a small company; otherwise, it will be required to pay the higher fee when applying for a sponsor licence. An organisation will also automatically be classed as a large company if it is a:

  • public company;
  • insurance company;
  • banking company; or
  • an e-money issuer.

The current fee payable for small companies to obtain a sponsor licence is £536 and  £1,476 for large companies.

The application process can be expedited for an additional cost of £500, subject to meeting the requirements.

The Certificate of Sponsorship (CoS) and Immigration Skills Charge

The first step to bringing over the desired skilled worker will be to assign a CoS to any individuals who are to be sponsored. This fee is currently £199.

In 2017 the Home Office introduced the Immigration Skills Charge, as set out within the Immigration Skills Charge Regulations 2017. While this fee is not payable concerning those who are switching from the Tier 4 Student route into the Skilled Worker category, it applies in most other circumstances. It is set at a rate of £1,000 per year of sponsorship for large companies and £364 per year for small ones.

This fee is payable when assigning a CoS, and it cannot be passed along to the worker. The sponsoring organisation must pay it.

If a large organisation were to sponsor an individual for three years, payment of £3,000 would be required at the time of assigning the CoS, in addition to the £199 CoS fee.

The Immigration Skills Charge is designed to encourage British businesses to recruit and train UK employees and discourage overseas sponsorship. However, it will take time for the charge to be used to develop the skills of the settled workforce. It will, unfortunately, therefore, not benefit those organisations that have an immediate skills shortage now.

Visa application fee and the Immigration Health Surcharge (IHS)

While the visa application fee and Immigration Health Surcharge both apply to the individual applicant rather than the sponsoring organisation, many organisations choose to cover the entire visa application process’s costs.

The visa application fee varies depending on the duration of the migrant’s sponsorship and whether an individual is making their application within or outside the UK. However, the current fee range falls between £610 – £1,408 and generally increases each April.

In addition to the visa application fee, the Immigration Health Surcharge (IHS) is also payable and is now £624 per year for those applying under the Skilled Worker route. Using the above example again, an individual who is to be sponsored for three years would need to pay £1,872 for the Immigration Health Surcharge when submitting their application for leave.

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