The 2022 Cost of Sponsoring Overseas Workers on UK Work Visas

With the introduction of additional sponsored routes under the new global business mobility visa, the UK government has confirmed its commitment to requiring businesses and employers to hold a Home Office issued sponsor licence in order to recruit and employ most overseas workers who want to work in the UK on work visas.

The requirement for a sponsor licence, and the cost of it, means UK employers need to work out the affordability of recruiting from overseas. Sponsorship Licence lawyers can help UK businesses with looking at the option of applying for a sponsor licence and the economics and affordability.

UK Online and London Based Immigration Solicitors and Sponsorship Licence Lawyers

For advice on sponsor licences call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.

Costing a sponsor licence

Costing a sponsor licence is important, whether you are a PLC or small London  restaurant in desperate need of staff. That’s because unless you know the real cost of hiring an overseas worker you can't accurately assess whether the sponsor licence application process is the best route for your business to follow.

Remember that when you are costing a sponsor licence, you need to carry out a similar accurate costing for the alternatives, such as the cost of recruitment agents and staff turnover or the increased cost of in-house staff training to try and ensure new staff can pick up the skills they need because you’ve had to recruit non-skilled workers with a view to training them rather than sponsoring skilled worker visa holders.

It maybe that your business concludes that business immigration is actually the cheaper route or that you should try both approaches; recruit from overseas whilst developing an apprentice training programme.

Whatever route your business choses you can't make informed choices until you have accurately costed all options and assessed whether those options will meet your short, medium and planned long term recruitment needs.

The cost of a sponsor licence

The cost of a sponsor licence needs to be broken down as your business has the cost of the actual sponsor licence application and the ongoing costs (such as a sponsor licence renewal application as your sponsor licence will only last for four years or the administrative costs of sponsor licence management) and the costs of sponsoring an individual overseas worker on a work visa, such as the skilled worker visa or health and care worker visa.

The costs need to be carefully assessed as the total costs will depend on the size of your business ( the sponsor licence application fee is cheaper if your business falls into the category of small company). The expense will also depend on the number of overseas workers you need to hire and whether your business agrees to pay some of their costs. This may be necessary if your competitors are offering to pay these fees for new recruits or are offering golden handshakes.

The sponsor licence application fee

The 2022 sponsor licence application fee (payable to the Home Office to process the application) ranges from £1,476 to £536. The fee is the higher figure if your business is classed as a ‘large sponsor’ and lower if you fall into the definition of a charity or ‘small business’.

The definition of a small business for a sponsor licence application

The Home Office guidance says your company will fall into the definition of ‘small’ if it meets two of the following eligibility criteria in a financial year:

• Your turnover is not more than £10.2 million
• Your balance sheet total is not more than £5.1 million
• The number of your employees does not exceed 50 (the number of employees is calculated using the average number across the financial year)

The sponsor licence fee is payable every four years when you make a sponsor licence renewal application, although the renewal fees may go up or down depending on whether your company still meets the eligibility criteria for a small or large company.

The cost of sponsoring a skilled worker visa applicant

An employer has to pay some costs for each skilled worker visa applicant they choose to sponsor. Those costs can't be offloaded to the overseas recruit (for example, by deductions from wages or saying the payments are a loan to the employee). The costs of sponsoring each individual skilled worker visa applicant depend on whether your company is classed as large or small.

The costs are:

• Certificate of sponsorship – this is £199 per sponsored employee. A skilled worker visa applicant can't apply for a skilled worker visa without a certificate of sponsorship
• Immigration skills charge – the cost of the immigration skills charge depends on the size of the business. It costs £364 per year for a small business and £1,000 per year for a company that is classed as a large business. A business can't pay the immigration skills charge in yearly instalments – you have to pay the full amount and that depends on the length of the worker’s visa

The above two costs have to be paid by the employer. The following costs are payable by the employee, although many employers offer to pay them in sectors where there is a real skills shortage and recruitment crisis. The skilled worker visa application costs are:

• The skilled worker visa application fee – the skilled worker visa application fee depends on the nature of the job and whether the visa applicant is applying for their visa from within the UK or from overseas. For example, if the job is on the shortage occupation list, the fee is cheaper. The application fees range from £479 to over £1,200
• The immigration health surcharge – the immigration health surcharge fee depends on the length of the visa but the annual cost is £624. The cost is payable up front so mounts up if a skilled worker visa applicant is applying for a three or five year visa.

In addition to these costs, if a skilled worker visa applicant wants to bring their family to the UK with them then the family members will need to meet the eligibility criteria for a dependant visa and will need to pay the dependant visa application costs, unless an employer is willing to fund the dependant visa fees and the immigration health surcharge for the dependant visa applicant. This may be the case if your new recruit is a highly skilled tech or digital specialist and an employer knows that they can't just put an existing employee or a new UK recruit on an apprentice training programme to get the same highly experienced and in demand worker.

Is the cost of a sponsor licence worth it?

The UK is reporting full employment so if UK businesses want to expand or need to recruit to fill vacancies brought about by staff departures etc, they may have little choice if they want to meet their business goals. Sponsorship Licence lawyers can help your business work through its immigration and employment options to work out the best solution for your company.

UK Online and London Based Immigration Solicitors and Sponsorship Licence Lawyers

For advice on sponsor licences call the expert London immigration lawyers at OTS Solicitors on 0203 959 9123 or contact us online.