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The immigration health surcharge: how does it work?

Over and above the complex visa applications and business immigration regulations you need to abide by, employers who recruit from overseas to fill job vacancies in their UK businesses will also need to know about the immigration health surcharge and the impending changes. Here’s our guide for employers on the immigration health surcharge and how it works.

What is the immigration health surcharge?

The immigration health surcharge (IHS) was introduced by the UK government in April 2015. Currently the Immigration Rules require most non-EEA nationals to pay the immigration health surcharge as part of their Home Office immigration application process.

The legal authority for the IHS is contained in the Immigration (Health Charge) Order 2015. This statutory instrument was made under the powers contained in section 38 of the Immigration Act 2014. It was updated in 2018 by the Immigration (Health Charge) (Amendment) Order 2018. This Order increased the IHS fees with effect from the 8 January 2019. The IHS fees will rise again in October 2020.

What does the immigration health surcharge pay for?

The immigration health surcharge was introduced by the UK government as a means of ensuring that non-EEA migrants coming to stay in the UK for more than six months to work, study, or to join their family in the UK make what is referred to as a ‘fair contribution towards the costs of the National Health Service’.

Rather than pay on a ‘pay as you go’ private basis for their National Health Service use, non-EEA visa applicants are required to pay a set fee in case they require the use of NHS resources whilst in the UK. This payment is in addition to the Home Office immigration application fee. The government says the amount of the IHS is calculated to represent a proper financial contribution to the cost of each visa applicant’s potential use of the NHS.

Money raised through the IHS is paid into general government funds. It is then distributed to devolved health administrations with an estimated near billion raised since the immigration health surcharge was first introduced in 2015. 

Will the end of free movement affect the immigration health surcharge?

The end of free movement for EU citizens will occur on the 1 January 2021. After that date any EU citizens arriving in the UK to live, work or study for more than six months will be subject to the same immigration controls as non-EEA nationals. EU citizens will therefore need to pay the immigration health surcharge as the Immigration Rules will apply equally to non-EEA and EEA citizens unless the EU national has secured:

As the IHS can run into several thousand pounds for a visa holder and their dependant family members it is important that employers encourage all existing EU workers to apply for settled status under the EU Settlement Scheme. Obtaining settled status avoids additional administrative burdens on the employer and the associated costs of the EU employee becoming subject to immigration control through failing to make a settled status application by the June 2021 cut off deadline.

For more information on how employers can prepare for the end of free movement and the new UK points based immigration system, which comes into force on the 1 January 2021, read our guide to the new points based immigration system

Why could the immigration health surcharge be considered controversial?

The immigration health surcharge is sometimes considered a controversial charge because:

  • The IHS is payable by migrants who come to the UK and contribute to the UK economy and to the National Health Service through payment of UK income tax and other taxes such as national insurance payments. It is therefore argued that the IHS is a form of double taxation.
  • The IHS is payable by entrepreneurs who secure start-up visas, innovator visas or global talent visas and who are investing in the UK economy, creating jobs and paying UK taxes.
  • The IHS is payable even if an employer has taken out private health insurance for all their employees.
  • The IHS is payable in addition to the Home Office immigration application fee.
  • The IHS fee has increased from £200 for most visa applicants per year when it was first introduced in 2015, to £400 per person per year in January 2019, to £624 per adult applicant per year with effect from October 2020. This equates to an increase of 312 percent over a five-year period.
  • There is no provision to pay the IHS by monthly instalments. The IHS fee must be paid at the time of the visa application for the full period of the visa.
  • The IHS is not refunded if a visa holder does not use the National Health Service whilst living and working in the UK.
  • The IHS is being extended to include all EU citizens who will be subject to immigration control after the end of free movement on the 1 January 2021, thus increasing recruitment costs for UK employers.
  • The IHS is payable at a flat rate and is not linked to the salary of the Tier 2 (General) visa applicant or other type of visa holder.  

Who has to pay the immigration health surcharge?

The immigration health surcharge must be paid by most visa applicants and their dependants seeking leave to enter the UK unless their application is for six months or less. Furthermore, those applying for limited leave to remain from within the UK must also pay the IHS even if they are seeking less than six months of leave to remain.

Who is exempt from paying the immigration health surcharge?

Employers and entrepreneurs should be aware that applicants are exempt from paying the immigration health surcharge if:  

  • They are applying for a visitor visa – this includes those applying for a business visit visa to carry out permissible business activities. The list of permissible business activities can be accessed here. If you need NHS treatment whilst in the UK on a visitor visa you have to pay for any NHS provided healthcare at the point of use.
  • They are applying for Indefinite Leave to Remain.

The government has produced a list of limited exceptions from paying the IHS.

In addition to the list of those exempted from paying the HIS, the COVID-19 pandemic has resulted in planned exemptions from the IHS for migrant workers in the NHS, health and social care sectors.

What treatment does the immigration health surcharge cover?

Many visa applicants assume that as they are being asked to pay an immigration health surcharge the National Health Service will cover all their medical needs. That isn’t necessarily the case. The IHS does not cover the cost of:

  • Prescriptions
  • Eye tests
  • Dental check-ups and treatment
  • Assisted conception

Is there a reduction in the immigration health surcharge if you have private health insurance?

The Immigration Rules do not provide for a reduction in the immigration health surcharge if the visa applicant has the benefit of private health insurance, either taken out personally or provided by an employer. This is the case however comprehensive the private health insurance policy.  

When can you use the National Health Service if you have paid the IHS?

You can use the National Health Service if:

  • You have paid the immigration health surcharge or you are in an exempt category and don’t need to pay it and
  • Your visa has been granted by the Home Office.

Although a person who has paid the immigration health surcharge is entitled to use the NHS in the same way as any UK citizen or person with settled status, those who pay IHS (in addition to any other UK or other taxes they pay whilst living and working in the UK) don’t get any preferential treatment when it comes to waiting times or the types of treatment that the NHS will fund and provide.

Does the IHS still cover NHS treatment if a visa is curtailed?

When you pay the immigration health surcharge you pay upfront for the length of your visa. However, an employee’s visa may be curtailed or ended earlier than anticipated. For example:

  • If an employer has their sponsor licence revoked and the Tier 2 (General) visa holder can't secure alternative employment with a sponsoring employer or
  • The sponsored worker is made redundant and can't obtain another job with an employer who holds a Home Office issued sponsor licence.

If a visa is curtailed or ended early the Immigration Rules say that a person subject to UK immigration control becomes liable for the cost of NHS hospital treatment from the date the visa expires even though the IHS was paid up to the date of the original visa period.

How much is the immigration health surcharge?

 The amount of the immigration health surcharge depends on:

  • The type of visa
  • The duration of the visa
  • With effect from October 2020, if the applicant is applying for a dependant visa if they are over or under the age of eighteen

The Immigration Rules and regulations specify the current annual immigration health surcharge charge per person at £400 per year per applicant (£300 for a limited number of visa categories).

In October 2020, the IHS will increase to £624 per year per applicant (£470 for a limited number of visa categories, such as students). From October 2020 applicants under the age of eighteen will pay the lower rate of £470 per year rather than the full rate of £624 per year.

The exact amount of the immigration health surcharge depends on how much leave is granted by the Home Office as the Immigration Rules say that an applicant must pay half of the yearly amount if the visa application includes part of a year that is less than six months. The applicant has to pay a whole year of IHS fees if their visa application includes part of a year that is more than six months.

How do you calculate how much immigration health surcharge is payable?

The Immigration Rules say that the whole of the immigration health surcharge has to be paid upfront at the time of the visa application. The calculation often isn’t as simple as checking the current annual IHS figure and multiplying by the number of years that the visa is being applied for. That is because the Immigration Rules don’t allow visa applicants to apportion the IHS fee to a daily or monthly amount.

If the duration of leave is not a round number of years the IHS must be rounded up to the nearest half year. The government online immigration health surcharge calculator can be accessed here.

Do the dependants of business visa holders have to pay the IHS?

Each visa dependant must pay the Immigration Health Surcharge, including dependant children under the age of eighteen. The Home Office does not provide a discount on the amount of the IHS however large the family.

However, the government has said that when the IHS fees rise in October 2020 dependant children under the age of eighteen will be liable to pay the IHS fee of £470 (applicable to a small number of visa applicants) rather than the standard IHS fee of £624 per year per applicant. This means that from October 2020 a family of four travelling to the UK for a sponsored worker to take up employment on a three year Tier 2 (General) visa will pay £6,564 in upfront IHS fees. If the family were to make their visa applications prior to October 2020 then the IHS would amount to £400 each per year of the visa amounting to £1,200 per year and £4,800 in total.

Can the immigration health surcharge be paid early?

Immigration solicitors are starting to receive enquiries about whether the immigration health surcharge can be paid early given that with the published IHS price rises it will cost a family of four an additional £1,764 in IHS charges if their visa application is made after the IHS fees are increased in October 2020.

The Immigration Rules say that a visa application can be submitted prior to the planned travel to the UK. Therefore, for some employers and visa applicants it may make financial sense to submit the visa application early and prior to the rise in IHS fees. Likewise, it may be prudent to submit a switch application or visa extension application prior to the October 2020 IHS fee increase.

How is the immigration health surcharge paid?

The immigration health surcharge is paid on the date of the submission of the visa application to the Home Office. If you apply online for the visa then as part of the application process a visa applicant is asked to pay the IHS fee, normally by online payment.

Payment of the IHS fee is therefore required before determination of the visa application and prior to the visa biometric appointment. The payment of the IHS fee generates an IHS reference as proof that the IHS fees have been discharged and to enable the visa applicant to then submit their online visa application.

Is the immigration health surcharge refunded if a visa application is refused?

If the visa application is refused, then the visa applicant will receive a refund of the immigration health surcharge within six weeks of the visa refusal. A partial refund will be provided if the Home Office grant a visa for a shorter period than that applied for by the visa applicant.


What next?

If you are an employer needing information on the management of your sponsor licence and how best to get ready for the new UK points based immigration system and the end of free movement, our business immigration solicitors can help. Call us on 0800 689 1700, email us at enquiries@hjsolicitors.co.uk or fill out the short form below with your enquiry.

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