Earlier this year, we informed you about the government’s plans to raise visa and nationality fees, which came into effect on October 4, 2023. These fee hikes included application fees, except for a significant increase in the Immigration Health Surcharge (IHS), which was anticipated to be implemented ‘later in the autumn.’ Recently, more details about this planned increase have emerged following the presentation of a draft version of The Immigration (Health Charge) (Amendment) Order 2023 in parliament last week.

To recap, the Immigration Health Surcharge (IHS) is an additional fee applicable to individuals applying to reside in the UK for over 6 months. This payment grants access to NHS healthcare during their stay and must be paid in full at the time of visa application submission. The impending change will see a substantial 66% rise in the IHS, increasing from the current rate of £624 per year to £1,035 per year. For children, the rate will rise from £470 to £776 per year.

The government’s rationale for this increase is to ensure that the surcharge covers the entire healthcare expenses of those paying it. Nevertheless, their reasoning has been met with criticism. Doctors in Unite condemned the hike as “immoral and divisive,” arguing that migrants, like other workers, already contribute to NHS funding through general taxation. They perceive this increase as an unjust double taxation on migrants for the same service.

This planned increase will undoubtedly create an additional financial burden for individuals funding immigration applications for themselves and their families, as well as for employers who may cover or subsidise these fees for sponsored employees.

In contrast to the October 2023 visa fee increments, this order mandating the IHS increase requires approval from both Houses of Parliament before it takes effect. The draft order specifies that it will commence no earlier than January 16, 2024, or the twenty-first day after the order is made, allowing for a potential delay if parliamentary approval is not swift.

Individuals affected by the IHS raise should plan ahead accordingly. Applicants may need to set aside more funds than initially anticipated for their upcoming applications or consider whether they qualify for a fee waiver to ensure they can continue residing in the UK.

Employers might need to reassess their recruitment strategies and budget allocations to maintain their ability to sponsor workers and secure the most skilled professionals in their field. Many businesses currently use clawback agreements when hiring new employees, allowing them to reclaim costs paid for the employee’s benefit. It’s likely that more employers will turn to such agreements to manage this increase.

If feasible, it’s advisable to submit any impending applications for entering or remaining in the UK as soon as possible to avoid these heightened fees, provided the applicant’s current immigration status and settlement pathway allow for it. If there’s uncertainty about proceeding with an application before January 16, 2024, seeking specialised legal advice before moving forward is strongly recommended.