UK Employers Slammed With Higher Sponsorship Fees In Immigration Shake‑Up

UK employers sponsoring migrant workers are also experiencing a steep increase in costs following the government's decision to raise the Immigration Skills Charge (ISC) from 16 December 2025.

The ISC, which gets charged to employers who hire overseas talent using the Skilled Worker visa route, has been increased substantially, which is a cost that businesses are struggling to afford, as they are battling inflation and soaring operational costs.

According to immigration law specialists at DavidsonMorris, the rise is part of a broader immigration shake-up aimed at reducing net migration and increasing employers' accountability.

The ISC was first introduced in 2017 to encourage UK businesses to invest in training domestic workers rather than hiring them from abroad. The charge must be paid when the employers give a Certificate of Sponsorship to the migrant worker.

Under the new rules, however, the cost has increased significantly. For large employers, the fee for each sponsored worker is now £1,320 per annum, whereas small and charitable organisations have to pay £480 per annum. Over a 5-year sponsorship period, this is equivalent to £6,600 for large employers, and £2,400 for smaller organisations.

Impact On Key Sectors

Industries such as agriculture, hospitality, and technology are likely to be hardest hit. These sectors have long relied on migrant workers to fill gaps in the domestic labour market.

The higher ISC charges could add millions to recruitment costs, with a knock-on effect of worsening staffing shortages in the agriculture sector. Similarly, in the case of hospitality businesses, already struggling with soaring energy bills and lower consumer spending, the higher cost of sponsorships may be unsustainable.

Compliance And Enforcement

The ISC increase is coming along with more stringent enforcement measures. Employers would now face tougher compliance checks, with civil penalties for illegal working increased to £60,000 per breach. The government has made it clear that businesses must have strong right-to-work checks and keep proper records in order to avoid fines.

Legal experts warn that small and medium-sized businesses may be disproportionately impacted as they often lack the resources to put in place comprehensive compliance systems. Larger corporations, meanwhile, are at risk of their reputation if found in breach of immigration rules.

Administrative Context

The increase in sponsorship fees is part of the government's wider immigration strategy to reduce net migration and also strengthen border security. Ministers believe the ISC increase will give employers the incentive to invest in skills development of UK workers to lower reliance on overseas labour.

However, business groups have criticised the move, warning that it will undermine competitiveness and deter international talent. The Confederation of British Industry (CBI) has previously warned against measures that make the UK less attractive for talented migrants, emphasising the importance of global talent in driving innovation and growth.

Balancing Costs And Competitiveness

The challenge facing policymakers is to balance the need to control migration against the economic realities of labour demand. While the ISC increase may win in the short term, it risks creating problems for employers who struggle to recruit skilled workers from within the country.

The government's move to increase sponsorship fees is a major step in the UK's shift in immigration policy. Employers are now faced with increased costs and requirements, and the increase in the ISC is adding to the financial pressures on recruitment.

For sectors that are dependent on migrant labour, the changes could prove challenging and raise questions about the sustainability of current workforce models. Whether the ISC increase achieves its intended objectives or worsens labour shortages remains to be seen.