Increased visa fees to fund public sector pay - Boodle Hatfield

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14 Jul 2023

Increased visa fees to fund public sector pay

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Zoe Jacob View profile
2 min read

Yesterday's decision to increase public sector pay by 6% came at a very real cost to employers who are reliant on migrant workers. Those who employ Skilled Worker migrants often cover the Home Office fees associated with the individual, and sometimes their family's, visa applications. The cost of doing so has now risen exponentially in a bid to raise the £1 billion needed to fund the pay increase.

The Immigration Health Surcharge - a charge levied on most migrants to the UK, to fund the cost of access to the National Health Service - will rise 66% from £634 to £1,035 per migrant, per year.  The discounted figure for students and children under the age of 18 will rise from £470 to £770 per migrant, per year. 

The practical impact of the change is that for a family of four, applying for a five year visa to relocate to the UK for the purposes of one parent's work, the Immigration Health Surcharge alone will cost in excess £18,000. This is on top of the Immigration Skills Charge (which must be paid by the employer at a rate £1,000 per Skilled Worker migrant, per year for a medium or large company) and visa application fees, which are currently £1,235 per applicant. The visa application fees themselves are also set to increase by as much as 20% in a further bid to raise the necessary £1 billion. 

For many UK businesses who rely on migrant labour to fill crucial roles, in light of the domestic skills shortage, yesterday's announcement is a blow which will need to be factored into future budgets. What the announcement does tell us however, is that Government still expects high migration in the near-term and indeed, is attempting to balance the public finances on this basis. 

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