Increase to the Immigration Health Surcharge: Fair or Folly?
The UK Government has announced an increase to the Immigration Health Surcharge (IHS), which is a fee currently paid by non-EU migrants to help fund the UK’s National Health Service (NHS). The IHS was originally £200 per person per year, which was increased to £400 in January 2019 and is now set to climb to £624 from 27 October 2020. This means that for one migrant sponsored for five years, the IHS alone would amount to £3,120 (which must be paid up front). A reduced charge of £470 will apply to students and their dependant family members, Youth Mobility Scheme migrants and any applicants under the age of 18.
This will create a huge financial burden for families traveling to the UK - for example, a family of four (two parents and two children under 18) would pay an IHS of £10,940 for a five year work visa. Importantly, the IHS is paid in addition to the other filing fees applicable to UK visa applications, which can also amount to thousands of pounds.
If you’re thinking the IHS won’t be a problem for migrants as it will be paid by wealthy employers who are sponsoring the visas, that’s not always the case - many employers are small/medium sized businesses who request at least part-payment by the migrant. Indeed, many specialist workers are sponsored by non-profits including hospitals which are run by the NHS. Additionally, some migrants don’t have a business backing their application at all – e.g. visas for the family members of a British citizen. This means that for a British citizen abroad who wishes to return to the UK with his non-British wife and two non-British children, the family will need find £7,820 to pay the IHS (along with around £7,668 for filing fees) for five years of immigration permission.
The rationale behind the IHS increase stems from Government research showing that migrants in the UK cost the NHS around £624 per year. In response, the UK Government claims it is ‘only fair’ that migrants pay this amount into the NHS, as British citizens are expected to contribute to the NHS year-round through their National Insurance contributions. Yet, this reasoning has a fatal flaw: migrants working in the UK also need to pay National Insurance contributions, meaning they are already double-paying for access to the NHS and this double-payment is now set to increase. Many migrants also have private healthcare through their employers and are not even using the NHS (though this is understandably difficult to track). At the very least, if the UK Government is truly concerned with fairness then any migrants who have paid the IHS should be exempt from paying National Insurance contributions.
The IHS increase is especially important in light of the new post-Brexit Points Based System, which will see EU migrants sponsored in the same fashion as non-EU migrants - including paying the IHS and other visa fees. For employers who are planning to continue employing EU workers arriving in the UK after December 2020, this will come at a huge cost. As has been widely reported, certain sectors where the resident workforce simply does not provide sufficient workers (e.g. healthcare, hospitality and construction) will be hardest hit by these increased costs, which will be unavoidable if they are to keep their businesses fully staffed. British organisations must now start to allocate large recruitment budgets in order to continue to access the workers they need come 2021 (which will come as a shock, as hiring EU workers is currently free of charge).
Indeed, if the economy is affected by Coronavirus in the way experts are currently predicting, many businesses simply will not have the necessary budget to sponsor migrant workers, which in turn may leave them short-staffed and unable to generate necessary revenue. Many NHS-run hospitals will be affected in this way, and it goes without saying that hospitals cannot afford to be short-staffed at any time much less in the midst of a global pandemic. In response to this concern, the UK Government has announced that applicants for the new Health and Care Visa (launched 4 August 2020) will be exempt from paying the IHS - this is a great start, however the list of professions eligible for this visa does not include a number of key care worker positions, meaning a number of workers sponsored by the NHS will still pay the IHS. Given that the IHS is intended to fund the NHS, this seems hard to justify.
Eversage contends that the UK Government must urgently re-think its plans to increase the IHS. Specifically, we propose the following modifications:
Exemptions for Shortage Occupation roles to prevent short-staffed sectors being disproportionately affected by the high fees;
Allow the IHS to be paid in annual payments by direct debit, rather than requiring a lump sum up front;
Exemption from paying National Insurance contributions where the individual can provide proof of having paid the IHS;
A full exemption for anyone sponsored by the NHS.
If you or your business will be affected by the changes, please get in touch – we would love to hear your views.