Immigration Skills Charge (ISC) Refund: Employer's Guide 2026

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The Immigration Skills Charge (ISC) is a fee UK employers pay when sponsoring overseas workers on a Skilled Worker or Senior or Specialist Worker visa. In certain circumstances, employers can reclaim some or all of that money. This guide explains when a refund applies, when it does not, and what steps to follow to claim one.

For related support, explore Annaizu’s sponsorship compliance software, secure document management and Sponsor Management System support.

Key Takeaways

Essential Points for Employers

• The ISC refund is only available in specific circumstances - not every early end to a sponsorship qualifies.
• Refunds are calculated on a per-month basis for each full six-month period unused.
• Employers must notify the Home Office promptly when a sponsored worker leaves or a visa is curtailed.
• The refund process is handled through the Sponsor Management System (SMS).
• Delays in reporting can reduce or eliminate the refund an employer would otherwise receive.

What Is the Immigration Skills Charge?

The Immigration Skills Charge is a levy paid by UK employers when they assign a Certificate of Sponsorship (CoS) to a worker applying for a Skilled Worker visa or a Senior or Specialist Worker (Global Business Mobility) visa. It is paid upfront and covers the full period of sponsorship stated on the CoS.

How Much Is the ISC?

The charge is set per worker and per year of sponsorship. Small or charitable sponsors pay a lower rate than medium or large sponsors. The rates are reviewed periodically, so employers should check the current figures on gov.uk before assigning a CoS.

• Small or charitable sponsors: lower rate per year of sponsorship.
• Medium and large sponsors: higher rate per year of sponsorship.
• The charge is calculated in six-month blocks, so a three-year CoS requires payment for six blocks upfront.

When Can an Employer Claim an ISC Refund?

A refund is available when the worker's visa ends earlier than the period covered by the ISC payment. The Home Office will refund the charge for any full six-month periods remaining after the visa ends.

Circumstances That Qualify for a Refund

• The worker's visa application is refused after the ISC has been paid.
• The worker withdraws their visa application after the ISC has been paid.
• The employer withdraws the CoS before the worker uses it.
• The sponsored worker leaves the job and the employer reports this to the Home Office, resulting in curtailment of the visa.
• The worker's leave is curtailed by the Home Office for reasons unrelated to employer fault.

How the Refund Is Calculated

Refunds are based on complete six-month periods that were paid for but not used. If a worker leaves four months into their first six-month block, no refund is due for that block. Any full subsequent six-month blocks that were pre-paid will be refunded.

1. Identify the date the worker's visa ended or was curtailed.
2. Count the number of full six-month blocks remaining in the paid period.
3. Multiply those blocks by the relevant rate for your sponsor size.
4. That total is the maximum refund amount.

When Is an ISC Refund Not Available?

Not every early end to a sponsorship entitles the employer to a refund. There are several situations where the charge is non-refundable.

Situations Where No Refund Is Issued

• The worker switches to a different visa route while still employed by the same sponsor.
• The worker is granted indefinite leave to remain (ILR) before the visa expires.
• The sponsor licence is revoked due to sponsor non-compliance.
• The employer fails to report a worker's departure in time and the Home Office does not curtail the visa.
• The visa is cancelled because the worker breached immigration conditions through their own actions.

How to Claim an ISC Refund

The refund process is managed through the Sponsor Management System. Employers should act promptly as soon as a qualifying event occurs, since delays can affect eligibility.

Step-by-Step Process

1. Log in to the Sponsor Management System using your authorising officer or level one user credentials.
2. Report the change in circumstances - for example, that the worker has left your employment.
3. The Home Office will curtail the worker's visa where appropriate.
4. A refund notification will be issued automatically if you are entitled to one based on the remaining paid blocks.
5. The refund is returned to the card or account used to make the original ISC payment.

Timeframes to Be Aware Of

Sponsors must report a worker's cessation of employment within ten working days of the worker leaving. Missing this deadline does not automatically cancel a refund entitlement, but it can complicate the calculation and, in some cases, affect whether the visa is curtailed at all.

ISC Refunds and Sponsor Compliance

Claiming an ISC refund is directly linked to meeting your sponsor duties. Accurate and timely reporting through the SMS is required both to remain compliant and to trigger any refund you are owed.

Reporting Obligations That Affect Refund Eligibility

• Report a worker's last day of employment within ten working days.
• Report if a worker does not turn up for their first day.
• Report significant changes to the worker's role or salary that were not covered by the original CoS.
• Keep the SMS updated with current contact details and key personnel records.

Practical Tips for UK Employers

Keep Payment Records

Always retain confirmation of your ISC payment, including the amount paid and the payment method. The refund is returned to the original payment source, so records help resolve any disputes quickly.

Act Quickly When a Worker Leaves

The sooner you report a worker's departure, the sooner the curtailment process begins and the clearer your refund entitlement becomes. Late reporting is one of the most common reasons refunds are delayed or reduced.

Review Your CoS Before Assigning It

Assigning a CoS for a longer period than necessary results in a higher ISC payment upfront. While refunds are available in qualifying circumstances, they are not guaranteed. Matching the CoS period accurately to the employment period helps manage costs from the outset.

Frequently Asked Questions

Can I get an ISC refund if my worker resigns?

Yes, if the worker resigns and you report this through the SMS within the required timeframe, the Home Office will curtail the visa. You will then receive a refund for any full six-month blocks that were pre-paid but unused.

How long does an ISC refund take to process?

The Home Office does not publish a fixed processing time. In practice, refunds can take several weeks to several months. Ensuring your SMS report is accurate and complete helps avoid unnecessary delays.

Is the ISC refunded if the visa application is refused?

Yes. If the worker's visa application is refused after you have paid the ISC, you are entitled to a full refund of the charge. The refund is processed automatically and returned to the original payment method.

Can I claim an ISC refund if the worker gains ILR?

No. If the worker is granted indefinite leave to remain before their current visa expires, the ISC is not refunded for the remaining period. This is one of the situations explicitly excluded from the refund scheme.

What happens to the ISC refund if my sponsor licence is revoked?

If your licence is revoked due to non-compliance, you will not be entitled to an ISC refund for the affected workers. This makes maintaining compliance central not only to your sponsorship obligations but also to protecting the financial investment you have made in the charge.

Do I pay the ISC again if I assign a new CoS to the same worker?

Yes. Each new CoS assignment requires a fresh ISC payment covering the period of the new sponsorship. There is no carry-over from a previous payment.

Conclusion

Understanding when an ISC refund is available - and acting promptly through the Sponsor Management System - can help UK employers recover meaningful sums that would otherwise be lost. Annaizu helps sponsors stay on top of reporting obligations, CoS management and sponsor compliance so that refund opportunities are not missed and sponsor duties are met on time.