United Kingdom – Impact of Rise in Visa, Other Fees on Global Business

United Kingdom – Impact of Rise in Visa, Other Fees

This GMS Flash Alert reports on the new fees for visa, immigration, and nationality applications in the United Kingdom that will come into effect on 18 March 2016.

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New fees for visa, immigration, and nationality applications in the United Kingdom will come into effect on 18 March 2016.

In January 2016, the U.K. government announced its plans to increase fees for visa, immigration and nationality applications, as well as associated priority and premium services.  The U.K. government has expressed that it wishes to reduce taxpayer contributions towards the border, immigration, and citizenship system so that by 2019-2020 the system is essentially self-funded by those who use it.  The new fees will come into effect on 18 March 2016.

WHY THIS MATTERS

The increase in fees for U.K. entry clearance as well as in-country visa applications represents a further cost to businesses that wish to move their global workforce to the United Kingdom.  This increase has the potential to hit global mobility budgets at short notice, in addition to the potential increases in minimum salary requirements in April, the possible widening of the Immigration Health Surcharge to include currently excluded visa categories, and the introduction of an Immigration Skills Charge later this year.  (For prior coverage, see GMS Flash Alert 2016-018, 29 January 2016, and GMS Flash Alert 2016-025, 12 February 2016).

Background – U.K. Visa Fees

On 26 February 2016, the Home Office laid further legislation before the U.K. Parliament (Immigration and Nationality (Fees) Order 2016)1 which, amongst other things, sets out maximum levels on the amount the Home Office can charge for visa applications. Although there are currently no plans to raise fees to the maximum level, the following changes will come into effect on 18 March 2016 (6 April for the Isle of Man):

  • Visas linked most closely to economic growth, such as those offered to workers and students, will be increased by 2 percent;
  • A 2 percent increase will apply to all visit visas;
  • An increase of up to 25 percent will apply to settlement, residence, and nationality fees;
  • An increase of up to 33 percent will apply for optional premium services offered by the Home Office such as the super-premium service and priority visa services overseas.

The application fees for sponsor licence applications will stay at the current rate.

We have outlined below a table of indicative fees for visa categories that will be relevant to U.K. businesses.  Readers may wish to refer to the Home Office’s website2 for the complete list of UK visa categories and fees.

      

Fee Category Current Fee  Fees from 18th March 2016
APPLICATIONS MADE FROM OUTSIDE THE UK
Visit visa < 6 months £85 £87
Visit visa < 2 years £324
£330
Visit visa < 5 years £588 £600
Visit visa < 10 years £737 £752
Settlement
£956 £1,195
Representative of an overseas business £535 £546
Tier 1 (Entrepreneur) £944 £963
Tier 1 (Investor) £1500 £1530
Tier 2 (General), (Intra Company Transfer) –Long Term Staff - 3 years or less £564 £575
Tier 2 (Intra Company Transfer) – Short Term Staff, Graduate Trainee & Skills Transfer £445 £454
Tier 2 (General), (Intra Company Transfer) – Long Term Staff – more than 3 years £1128 £1151
Tier 4 £322 £328
Tier 5 £225 £230
Priority Visa – Non settlement £120 £150
APPLICATIONS MADE FROM WITHIN THE UK
Indefinite Leave to Remain £1500 £1875
Naturalisation £1005 £1236
Leave to Remain – Other £649 £811
Transfer of Conditions (Limited Leave to Remain) £183 £223
Transfer of Conditions (Indefinite Leave to Remain) £260 £308
Tier 1 (Entrepreneur) £1180 £1204
Tier 1 (Investor) £1500 £1530
Tier 2 (General), (Intra Company Transfer) – Long Term Staff - 3 years or less £651
£664
Tier 2 (Intra Company Transfer) – Short Term Staff, Graduate Trainee & Skills Transfer £445 £454
Tier 2 (General), (Intra Company Transfer) – Long Term Staff - more than 3 years £1302 £1328
Tier 4 £439 £448
Tier 5 £225 £230
Premium service £400 £500
Priority postal service £300 £375

KPMG NOTE

The Impact of Fee Growth and Global Mobility 

Taken in isolation, each fee may not appear to have increased to a significant degree.  However, the cumulative effect could be keenly felt by U.K. businesses that rely on their ability to move their skilled and experienced workforce, as well as their emerging talent, to the U.K. for the benefit of their operations and clients.

Perceived Government Aims and Impact on Business

The U.K. government’s aim appears to be reducing the burden of running U.K. Visas and Immigration on the U.K. taxpayer and to install a system where only those who use it pay for it.  While this may be seen by some as a laudable goal, it does not appear to come with a promise of ensuring that these funds will be used to their maximum effect.  This may mean that fees will continue to rise over the next few years, which could put additional financial burdens on U.K. businesses that are trying to stay competitive in a global market.

CONTACTS

For additional information or assistance, please contact your usual KPMG GMS or People Services professional* or one of the following professionals with the KPMG International member firm in the United Kingdom:

 

Punam Birly

Tel. +44 (0) 20 7694 4950

Punam.Birly@kpmg.co.uk

 

Paul Jones

Tel. +44 (0) 20 7311 1475

Paul.Jones2@kpmg.co.uk 

 

Denise Osterwald

Tel. +44 (0) 20 7694 3481

Denise.Osterwald@kpmg.co.uk

 

* Please note the KPMG International member firm in the United States does not provide immigration services

The information contained in this newsletter was submitted by the KPMG International member firm in the United Kingdom.

© 2016 KPMG LLP, a United Kingdom legal liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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