Increase in Immigration Skills Charge from 16 Dec 2025: What UK Employers Need to Know

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The Home Office has confirmed that the Immigration Skills Charge (ISC) will increase by 32% from 16 December 2025. This is a significant cost change for any UK employer sponsoring overseas workers, and preparation before the deadline could save thousands of pounds per hire.

For related support, explore Annaizu’s sponsorship compliance software, mock audit inspection readiness and mock audit preparation.

For 2026 checks, cross-check the latest GOV.UK immigration skills charge before making sponsorship or visa decisions.

Key Takeaways

Essential Points for UK Employers

• The Immigration Skills Charge will rise by approximately 32% from 16 December 2025.
• The charge applies to most Skilled Worker and Senior or Specialist Worker visa sponsorships.
• Employers who assign Certificates of Sponsorship before 16 December 2025 will pay the current lower rate.
• Certain categories of workers are exempt from the charge entirely.
• Planning CoS assignments ahead of the deadline is the most direct way to reduce costs.

What Is the Immigration Skills Charge?

The Immigration Skills Charge is a levy paid by UK employers when they sponsor an overseas worker on certain visa routes. It was introduced to encourage employers to invest in training the domestic workforce. The charge is paid upfront when a Certificate of Sponsorship (CoS) is assigned and is calculated based on the size of the sponsoring organisation and the length of the visa being granted.

Current Rates Before 16 December 2025

• Small or charitable sponsors: £364 per year of sponsorship
• Medium or large sponsors: £1,000 per year of sponsorship

New Rates From 16 December 2025

• Small or charitable sponsors: £480 per year of sponsorship
• Medium or large sponsors: £1,320 per year of sponsorship

For a large employer sponsoring a worker on a five-year Skilled Worker visa, the charge will rise from £5,000 to £6,600 - an increase of £1,600 per worker.

Which Visa Routes Does the ISC Apply To?

The Immigration Skills Charge applies when employers assign a CoS on the following routes:

• Skilled Worker visa
• Senior or Specialist Worker visa (part of the Global Business Mobility route)

It does not apply to all immigration routes. Employers should confirm which route their worker will use before assuming the charge is payable.

Who Is Exempt From the Immigration Skills Charge?

Not every sponsored worker triggers the ISC. The following categories are exempt:

• Workers switching from a Student visa who completed their studies at a UK higher education institution
• Workers on a PhD-level occupation (those in occupation codes classified at RQF level 8 or above in certain circumstances)
• Graduate Trainee workers under the Global Business Mobility route
• Workers sponsored by a UK higher education institution
• Workers sponsored by a charity with a relevant charitable status

Employers should review each CoS individually to determine whether an exemption applies before calculating expected costs.

How Is the Charge Calculated?

The ISC is calculated based on the length of permission being granted, not the length of the contract. It is paid in six-month or twelve-month blocks depending on the visa duration.

Example Calculation for a Large Employer (Post-December 2025 Rates)

• Visa duration of one year or less: £1,320
• Visa duration of two years: £2,640
• Visa duration of three years: £3,960
• Visa duration of five years: £6,600

Example Calculation for a Small Employer (Post-December 2025 Rates)

• Visa duration of one year or less: £480
• Visa duration of two years: £960
• Visa duration of three years: £1,440
• Visa duration of five years: £2,400

What Counts as a Small Sponsor?

A small or charitable sponsor is one that meets at least two of the following criteria under the Companies Act 2006:

• Annual turnover of no more than £10.2 million
• Balance sheet total of no more than £5.1 million
• No more than 50 employees

Charities registered with the Charity Commission, OSCR or the Charity Commission for Northern Ireland also qualify for the lower rate regardless of size.

What Should UK Employers Do Before 16 December 2025?

Employers who are planning to sponsor overseas workers in early 2026 should consider whether it is possible to assign the Certificate of Sponsorship before the December deadline. The rate that applies is determined by the date the CoS is assigned, not the date the visa application is submitted or the worker starts employment.

Steps to Take Now

1. Review your current recruitment pipeline and identify any overseas workers who will need sponsorship in the coming months.
2. Confirm whether those roles qualify for the Skilled Worker or Senior or Specialist Worker route.
3. Check whether any exemptions apply to reduce or eliminate the ISC for those workers.
4. Assess whether your organisation qualifies as a small sponsor for the lower rate.
5. If CoS assignment is feasible before 16 December 2025, work with your HR or immigration team to prioritise those cases.
6. Update your immigration budget to reflect the new rates for any sponsorship taking place from December onwards.

Is the ISC Refundable?

In limited circumstances, a partial refund of the Immigration Skills Charge may be available. Refunds can apply where:

• The visa application is refused
• The visa is granted for a shorter period than applied for
• The worker's employment ends significantly earlier than the CoS end date

Refunds are not automatic. Employers must apply through the Sponsor Management System and provide supporting evidence. Processing times can vary, and refunds cover only the unused portion of the charge.

Does the ISC Affect the Worker?

The Immigration Skills Charge is the legal responsibility of the sponsoring employer. It cannot be passed on to or recovered from the worker being sponsored. Attempting to recoup this cost from the sponsored worker, whether directly or indirectly, breaches the sponsor licence conditions and could result in licence suspension or revocation.

How Does This Fit Into the Wider Cost of Sponsorship?

The ISC increase is one of several costs that UK employers must account for when sponsoring overseas workers. A full cost picture for a single Skilled Worker hire on a five-year visa at a large organisation from December 2025 might include:

• Sponsor licence application or renewal fee
• Certificate of Sponsorship fee: £525 per worker
• Immigration Skills Charge: £6,600 (large sponsor, five years)
• Worker's visa application fee
• Immigration Health Surcharge paid by the worker (currently £1,035 per year)
• Legal or advisory fees where professional support is used

For employers sponsoring multiple workers each year, the combined impact of the ISC increase will be material and should be built into workforce planning budgets as soon as possible.

Frequently Asked Questions

When exactly does the Immigration Skills Charge increase take effect?

The new rates apply to any Certificate of Sponsorship assigned on or after 16 December 2025. CoS assignments made before that date will be charged at the current lower rates.

Can I assign a CoS now for a worker who will not start until 2026?

Yes. The rate that applies is determined by the CoS assignment date, not the worker's start date or visa application date. Assigning the CoS before 16 December 2025 will lock in the current lower rate, provided you have an available undefined CoS allocation or a defined CoS already approved.

What happens if my CoS allocation runs out before the deadline?

If you need to request additional defined CoS allocations, you should submit a request to the Home Office through the Sponsor Management System as early as possible. Allocation requests can take time to process and there is no guarantee of approval before the deadline.

Does the ISC increase apply to visa extensions and renewals?

Yes. The ISC is payable whenever a new CoS is assigned, including for in-country extensions and renewals of sponsored employment. If a worker's CoS for an extension is assigned on or after 16 December 2025, the new rates will apply.

Is the ISC deductible for tax purposes?

The Immigration Skills Charge is generally treated as a business expense and may be deductible against corporation tax. Employers should confirm the tax treatment with their accountant or tax adviser, as individual circumstances vary.

Will there be further increases after December 2025?

The Home Office has not announced further increases beyond the December 2025 change at this time. However, ISC rates have increased before and may increase again in future years. Employers should monitor Home Office announcements and factor in the possibility of future rises when making long-term sponsorship commitments.

Conclusion

The 32% rise in the Immigration Skills Charge from 16 December 2025 is a significant cost increase for UK employers who rely on overseas talent. Acting before the deadline where possible, reviewing exemptions carefully, and updating immigration budgets now are the most effective ways to manage