The Immigration Skills Charge in 2026: What UK Employers Need to Know (and Plan For)

For UK employers that rely on sponsored talent, the Immigration Skills Charge (ISC) has quietly become one of the most significant - and most misunderstood - costs of hiring internationally.

Introduced to encourage investment in the domestic workforce, the ISC is not a fee you can negotiate, reduce, or pass on to employees. It is a fixed cost of sponsorship, payable upfront, and from December 2025 it will increase sharply.

In this article, we explain what the Immigration Skills Charge is, how much it will cost from 2026, who is exempt, and why getting it wrong can quickly turn into a compliance problem - not just a budgeting issue.

What is the Immigration Skills Charge?

The Immigration Skills Charge is a mandatory levy paid by UK employers when sponsoring workers under the Skilled Worker visa or the Global Business Mobility Senior or Specialist Worker route.

It was introduced in 2017 with a clear policy objective: to discourage over-reliance on overseas labour and to fund domestic training through the UK education system. The funds raised go directly to the Department for Education.

Crucially, the ISC must be paid by the sponsor. It cannot be recovered from the worker, either directly or indirectly. Any attempt to pass the cost on - through deductions, clawback clauses or side agreements - is treated as a serious breach of sponsor duties.

When does the Immigration Skills Charge apply?

The charge applies every time an employer assigns a Certificate of Sponsorship (CoS) for an eligible route, unless a specific exemption applies.

That includes:

• New Skilled Worker hires

• Extensions of existing Skilled Worker visas

• Sponsor changes requiring a new CoS

• Senior or Specialist Worker transfers under Global Business Mobility

The charge does not apply to dependants, and it does not apply where entry clearance is for less than six months from outside the UK. However, for in-country applications, the length of leave does not remove the obligation.

The ISC must be paid in full at the point the CoS is assigned. The visa application will not progress until payment has cleared.

How much will the Immigration Skills Charge cost in 2026?

From 16 December 2025, the Immigration Skills Charge will increase by around 32%.

For medium and large sponsors:

• £1,320 for the first 12 months

• £660 for each additional six-month period

For small sponsors and charities:

• £480 for the first 12 months

• £240 for each additional six-month period

The charge is calculated upfront based on the full length of sponsorship stated on the CoS. This means a three-year Skilled Worker visa will attract a significantly higher immediate cost than many employers expect.

The key point to understand is that the Home Office does not charge annually. It charges in blocks - one year plus six-month increments - and even small changes to the CoS end date can materially affect the total payable.

Who counts as a small sponsor?

Whether you pay the higher or lower rate depends on your organisation’s size at the time the CoS is assigned.

Generally, a sponsor will qualify as “small” if it meets at least two of the following:

• Annual turnover of £10.2 million or less

• Total assets of £5.1 million or less

• 50 employees or fewer

Charitable sponsors must be properly registered or able to evidence charitable tax status.

If the wrong rate is paid, UKVI will require a top-up - and errors in classification can attract scrutiny during audits.

Are there any exemptions?

Yes - but they are limited and tightly enforced.

Common exemptions include:

• Health and Care Worker visas

• Certain PhD-level and research roles

• Workers switching from Student to Skilled Worker inside the UK

• Some EU nationals transferring under the Senior or Specialist Worker route for up to three years

• Assignments of less than six months from overseas

Exemptions must be evidenced. Claiming one incorrectly can result in backdated charges, refusal of applications, or compliance action.

Can the Immigration Skills Charge be refunded?

Refunds are possible, but they are not guaranteed and should never be relied upon for budgeting.

Full or partial refunds may be available if:

• The visa application is refused or withdrawn

• The worker never starts employment

• The worker leaves early or moves to another sponsor

• The sponsored period granted is shorter than expected

Refunds are processed through the Sponsor Management System and typically take up to 90 days.

Importantly, there is no refund if the worker remains employed by the same sponsor in a different role, or if their leave is curtailed due to sponsor non-compliance.

Why the Immigration Skills Charge is also a compliance issue

Many employers treat the ISC as a finance problem. In reality, it is a compliance risk.

Failure to pay the charge correctly and in full invalidates the Certificate of Sponsorship. That leads to visa refusals, wasted recruitment costs, and potential Home Office scrutiny.

Passing the cost to the worker - even unintentionally - is viewed as a serious breach of sponsor duties and can result in licence suspension or revocation.

As Home Office audits become more data-driven and enforcement-focused, mistakes around ISC payments increasingly surface during wider compliance checks.

Planning ahead: what sponsors should be doing now

With higher ISC rates approaching, employers should be reviewing:

• Which roles genuinely require sponsorship

• The length of sponsorship being requested on CoS

• Whether any exemptions legitimately apply

• How sponsorship costs are tracked internally

• Whether finance, HR and immigration processes are aligned

At Imminova, we see the biggest risks arise not from bad intent, but from fragmented systems - where payroll, HR and sponsorship decisions are not connected.

Our platform helps employers manage sponsorship costs, CoS assignments and compliance obligations in one place, reducing errors and improving audit readiness.

Final thoughts

The Immigration Skills Charge is not new - but it is becoming more expensive, more visible, and more tightly enforced.

For UK employers hiring globally, the question is no longer whether the ISC applies, but whether your organisation is set up to manage it properly, transparently and compliantly.

Getting it right protects more than your budget. It protects your licence, your people and your ability to grow.