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United Kingdom: Clarification on Costs That Can be Recouped from Sponsored Workers

September 4, 2025

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  • United KingdomUnited Kingdom

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At a Glance

  • The UK Home Office has recently provided clarity on costs that can and cannot be recouped from sponsored workers.
  • It has also clarified the meaning of rules introduced in April 2025 on costs that can be claimed back but that will reduce the salary of Skilled Workers for the purposes of the minimum salary calculation.
  • Sponsors of foreign workers in the United Kingdom should ensure that they comply with policies on recoupment of fees, as failing to comply with these requirements could lead to refused or curtailed visa applications, and/or adverse action being taken against a sponsor’s licence.

The situation

The UK Home Office has recently provided clarity on costs that can and cannot be recouped from sponsored workers. Due to increasing sponsorship costs, it is important that sponsors understand what they can lawfully recoup from workers and what costs need to be covered by sponsors in order to remain compliant with the law.

A closer look

  • Examples of costs that can never be reclaimed from any sponsored worker:
      • Licence fees (and associated legal costs for applying for or maintaining the licence);
      • Certificate of Sponsorship (CoS) fees;
      • Immigration Skills Charges; and
      • Legal fees that relate to assigning a CoS.
  • Skilled Worker costs that can be reclaimed. The following are examples of costs that can be reclaimed from Skilled Workers, but are deemed ‘business costs, immigration costs or investment’ and therefore reduce the salary for the purposes of minimum salary level (MSL) calculation include:
      • Visa fees;
      • Immigration Health Surcharge (IHS);
      • Priority fees (only where the worker had a genuine choice);
      • Legal fees relating to a visa application (only where the worker had a genuine choice); and
      • Dependant fees.

  • Clawback clauses which are conditional (where repayments only need to be made if the worker leaves their employment early) are not considered to be deductions from salary for the purpose of the rule. However, they must be reasonable and not in place to prevent sponsored employees from leaving their employment.
  • Loans. Genuine loan arrangements should not impact MSL calculations. However, where a sponsor is paying directly for items or costs (such as IHS) and then recouping from the applicant, this is not considered a loan and will impact the MSL.
  • Implementation. The rule on MSL calculations sets out how salaries will be considered at the application stage for Skilled Worker visas submitted on or after April 9, 2025. The Home Office is not reassessing salaries set out in past applications. However, the prohibition on passing on associated legal fees for Skilled Worker CoS issuance is applied from December 31, 2024, and not when the guidance was clarified in April.
  • Calculation. Deductions will be averaged over the duration of the visa for the purpose of salary confirmation, rather than calculated at the actual repayment rate.

Background

On April 9, 2025, a new salary deduction rule came into force for Skilled Workers, as reported in our alert, updated March 12, 2025. This rule affects how the Home Office calculates whether a worker’s salary meets the minimum threshold. This rule is designed to prevent salary thresholds from being met through certain payments made by employees themselves.

The changes in April also clarified a change in December 2024 that legal fees in relation to assigning a Skilled Worker CoS cannot be reclaimed and extended this to other sponsorship.

Impact

Employers should ensure that their policies on recoupment of fees comply with these rules and that permitted recoupments are factored into salary calculations.

Failure to comply with these requirements could lead to refused or curtailed visa applications, and/or adverse action being taken against a sponsor’s licence.

Looking ahead

The clarification demonstrates the UK Home Office’s intention to restrict the practice of recovering sponsorship costs from sponsored workers and to ensure that Skilled Workers receive the salary offered to them.

This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to [email protected].

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  • United KingdomUnited Kingdom

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