Money, money, money…

Hot on the heels of the recently introduced visa and citizenship fees hike (Visa and citizenship fee hike imminent | Bindmans LLP) which came into effect on 4 October 2023, the next anticipated costs increases are due to come into effect mid-January 2024.  In the September 15 visa fees announcement which detailed the changes (mostly 15-20% increases across the board), the Home Office indicated that the Immigration Health Surcharge would increase sometime later in the year.

In accordance with legislative requirements, the Home Office have now laid an Order before Parliament for the Immigration Health Surcharge costs increase to come into effect 16 January 2024. Hold on to your hats as the Immigration Health Surcharge fee upsurge represents an astounding 66% rise.

What is the Immigration Health Surcharge (IHS)?

The IHS, introduced in April 2015, is a charge payable by everyone applying for a visa for the UK. It is usually levied on visa applications where:

• a person is applying for permission to enter the UK for six months or more; and
• a person is making a visa application from within the UK for any length of time

It should also be noted that the when making a visa application with a shortfall between 6-12 months (such as a family visa application where the visa is granted for 33 months), the charge is rounded up to a full year!

The IHS allows UK visa holders to access the National Health Service (NHS) and is an integral part of the visa application process. Even if a visa applicant holds private medical insurance, the IHS must usually be paid (unless exempt – see below). Additionally, even if the IHS has been paid, certain services must still be paid for – such as prescriptions, eye tests, dental treatments.

Some visa applications are exempt from the IHS or pay a reduced fee. Where exempt, some visa applicants must still obtain an IHS reference number.

What is the cost of the Immigration Health Surcharge (IHS)?

Again, the IHS is payable when:

• Usually applying from outside the UK for a visa for more than six months.
• When applying from inside the UK regardless of the length of time being applied for – except for ILR applications.

Currently the IHS is:

• £624 per person per year.
• £312 when applying for a visa for six months or less.
• £624 when applying for more than six months but less than one year.
• £235 for Student visas, Youth Mobility Scheme visas or for an applicant who is under 18.

The Increased IHS from January 2024:

• The new (general) Surcharge cost will be £1035 per person per year.
• Student visas, Youth Mobility Scheme visas or for an applicant who is under 18 – the increase will be to £776 per person per year.

Impact:

The eye-watering 66% increase in the Immigration Health Surcharge will have a very direct impact on all visa applicants. The upfront IHS costs before paying the visa application fee, Priority Processing and Value Added Service fees, appointment fees and any other visa related costs will now range from:

• £1035 (increased from £624) per person for a 12-month visa.
• £5175 (increased from £3120) per person for a 5-year visa.
• £18,110 for a family of four for a 5-year visa (two adults and two children) (increased from £10,940).

Justifying the new gravity defying hikes, John Glen, the Chief Secretary to the Treasury, said:

We plan to increase the rates of the Immigration Health Surcharge, which have been frozen for the past three years, despite high inflation and wider pressures facing the economy and the system in general, to ensure that it covers the full healthcare costs of those who pay it…. That increase to the Surcharge will help to fund the pay rise for doctors.

The union representing junior doctors, general practitioners and hospital consultants, Unite, as well as immigration lawyers (including Bindmans LLP), advocacy groups, opposition politicians and charities have rightly expressed concern and dismay at the surge in the Surcharge. Visa holders with the right to work are already required to have National Insurance contributions (NIC) deducted from their salaries at source and these contributions (as with all NIC) already help fund the NHS. Arguably, this hike in the Immigration Health Surcharge, which is ten times the rate of inflation (the September 2023 UK rate of inflation was 6.7%) can be regarded as an unfair double taxation on migrant workers.

Tanya Goldfarb, Head of our Business Immigration Team, comments:

Looking ahead, it will be interesting to track the repercussions of this double whammy of visa fee increases and the IHS spike – the direct ramifications they will have on the UK economy should not be underestimated.

Such colossal visa costs may well lead to a downturn in work sponsorship; result in fewer international students applying to the UK’s world class universities (and the restrictions on student dependant visa applications, also due to come into effect in 2024, will be a further disincentive); and potentially fewer businesses seeking to expand into Europe will consider the UK an attractive place to land.

Please note the information contained in this article is not legal advice and should not be relied on as such.