Immigration Skills Charge to Increase from December 2025: What Employers Need to Know

Earlier this month, the UK Government confirmed that the Immigration Skills Charge (ISC), a key element of the UK’s sponsorship system, will rise by 32% from 16 December 2025. This change, introduced through the Government’s latest Immigration White Paper, forms part of a broader strategy to reduce net migration and encourage employers to invest in developing the domestic workforce through upskilling and training initiatives.

What is the Immigration Skills Charge (ISC)?

The Immigration Skills Charge is a mandatory fee that licensed sponsors must pay each time they assign a Certificate of Sponsorship (CoS) to a worker applying under eligible visa routes such as:

• Skilled Worker

• Global Business Mobility – Senior or Specialist Worker

The charge applies whether the worker is:

• Applying from outside the UK for entry clearance to work in the UK for six months or more; or

• Applying from within the UK for permission to stay, even if for less than six months.

The New ISC Rates

Under the draft regulations, the increased rates will apply to all Certificates of Sponsorship assigned on or after 16 December 2025.

Type of Sponsor	Current Annual ISC Rate	New Rate (from 16 Dec 2025)
Small companies and charities	£364 per year	£480 per year
Medium and large companies	£1,000 per year	£1,320 per year

This means that sponsoring a Skilled Worker on a five-year visa could cost a large company up to £6,600 in ISC alone.

Who Will Be Affected?

The increase will affect all UK employers who either:

• Hold an existing sponsor licence and continue to assign Certificates of Sponsorship after 16 December 2025; or

• Plan to apply for a new sponsor licence to employ Skilled Workers or Global Business Mobility Workers.Employers who assign a CoS before that date will continue to be charged the current rate.

  
  

Are There Any Exemptions?

Certain sponsored workers are exempt from the Immigration Skills Charge, including:

• Workers switching from the Student route to the Skilled Worker route;

• Workers sponsored under specific occupations listed as exempt by the Home Office; or

• Cases where the ISC does not apply under international trade obligations or reciprocal agreements.Employers should always check the latest Home Office guidance before assigning a CoS to confirm whether the ISC is payable.

Practical Implications for Employers

Employers planning to sponsor new workers later this year should consider timing carefully:

• If possible, assign the CoS before 16 December 2025 to benefit from the lower rate

• Budget for the new rates in future recruitment plans, particularly if sponsoring multiple workers

• Review internal policies on reclaiming the ISC from employees, as the fee must be paid by the sponsor and cannot legally be passed on to the worker.

---

At Lace Law, we support businesses across the UK with sponsor licence applications, Skilled Worker recruitment, and Home Office compliance. Our team can:

• Review your licence structure and compliance systems;

• Advise on cost planning for sponsorship; and

• Ensure your Certificates of Sponsorship are correctly issued ahead of the ISC increase deadline.If your business plans to hire overseas talent later this year or early 2026, it is worth reviewing your sponsorship timelines now.

Contact Lace Law today to schedule a consultation with one of our immigration specialists.