Immigration update: key things for HR to know for 2025

In the last few months of 2024 and early 2025, we have seen numerous proposed updates and clarifications relating to the UK immigration system that may impact employers. We have highlighted the key issues employers need to know about if they use the immigration system to sponsor and employ migrant workers.

Certificate of Sponsorship fee (and other charges) to increase

The UK Government has recently announced that various immigration fees are likely to increase. These changes were laid before parliament on 16 January and are therefore subject to parliamentary approval. If implemented the changes most likely to impact employers are as follows:

Some other immigration fees are also due to increase, but these are less likely to be relevant to UK employers. A list of the proposed increases can be found on the government website here.

The increase to the fee for a Certificate of Sponsorship ('COS') is significant (more than double the current cost). Employers who sponsor a significant number of employees may wish to revise their budgets for sponsorship to take account of these increased costs for the coming year. The Certificate of Sponsorship fee must be paid for by the employer and cannot be charged back from the employee.

These fees are additional to the Immigration Skills Charge which is a mandatory employer cost which it must pay when sponsoring an employee. Some employers also elect to pay for visa application fees (but this is not mandatory).

A precise date for implementation is not yet known. If the changes are approved, they will be implemented as soon as parliamentary time allows. Therefore, employers who plan to sponsor someone in the near future may wish to consider doing so as soon as possible to increase the likelihood of the current, lower COS fee applying.

Recoupment of immigration related costs

The UK Government has also recently tightened up some of the rules about which immigration costs can be charged to the employee being sponsored. Employers have always been prohibited from passing on the costs of the Immigration Skills Charge. However, the government have now clarified that it is also unlawful to pass on the costs of the Certificate of Sponsorship fee (or indeed any costs relating to the sponsor licence itself).

The latest sponsor guidance which was published on 31 December 2024 states that the employer is responsible for paying the sponsor licence fee and associated administrative costs including premium services. It states that the licence will normally be revoked if the Home Office find that the employer has recouped or attempted to recoup any part of that fee or associated administrative costs on or after 31 December 2024.

Similarly for any CoS assigned on or after 31 December 2024 it states that the licence will normally be revoked if the CoS fee (or any part of it) has been recouped or if the employer has attempted to recoup it.

Employers should therefore review their repayment/claw back agreements and practices to check that they do not capture any costs which cannot be passed on to the employee.

Almost 40% of licences refused and increase in compliance visits

Finally, in late 2024 the UK Government published data which indicates that the number of sponsor licence applications not being granted has increased significantly. The data shows that between July and September 2024, UKVI received 8,299 sponsor licence applications, of which 5,054 licenses were granted, and 3,245 applications were not granted (which includes both applications withdrawn and those rejected). This means that around 39% of applications were not granted in this period.

This is indicative of UKVI taking a different approach to granting sponsor licences (albeit the formal sponsor licence guidance has not changed). Calls have been made for UKVI to clarify the criteria they are considering when processing these applications to allow more clarity around this. Some employers may find taking legal advice on this process before applying more critical than ever (as a cooling off period applies if an application is refused before a new application can be made).

Data released by UKVI in 2024 also shows that the number of Skilled Worker sponsor licences revoked or suspended has increased significantly. The number of licences revoked in Q2 of 2024 was more than double the number in Q1 and almost five times the amount in Q4 of 2023.

Therefore, it is more important than ever than employers are on top of their sponsor duties compliance obligations to ensure they do not have to face the reputational and operational issues that can arise from a sponsor licence revocation.

Brodies offer audits if you wish us to check your compliance processes and to make recommendations for improvements. Read our interactive brochure for more details. 

More information

For further detail on any of these changes or to discuss sponsor licence applications or compliance, please contact Elaine McIlroy or Erin McLafferty from Brodies Employment and Immigration team.