UK Tightens Immigration Rules, Raising Costs for Foreign Workers and Employers

London: The UK government’s decision to tighten immigration rules has cast a shadow over the “British dream” of overseas job aspirants, including a large number of Malayalis. A sharp increase in visa fees and immigration-related charges has significantly raised the financial burden on both foreign workers and UK employers, prompting concerns that overseas recruitment may decline sharply in the coming months.

Employers Face Heavier Financial Burden

The latest measures are aimed at discouraging employers from hiring workers from abroad. A key change is the 32 per cent increase in the Immigration Skills Charge (ISC), which came into effect on December 16.

Under the revised structure:

• Large sponsors must now pay £1,320 per worker per year, up from £1,000.
  
  
• Small businesses are required to pay £480 per year, compared to £364 earlier.

For a five-year sponsorship, a large employer would have to pay £6,600 upfront under the ISC alone. As current regulations prohibit employers from recovering this cost from the sponsored worker, many businesses are reportedly reconsidering or scaling back foreign recruitment plans.

Higher Salary Threshold and Health Surcharge

Further compounding the challenge is the sharp increase in the minimum salary threshold for work visas, which has been raised to £38,700. In addition, the Immigration Health Surcharge now stands at £1,035 per person per year.

For a family of four applying for a five-year visa, the combined cost of the health surcharge alone can approach £40,000, making migration to the UK financially prohibitive for many middle-income applicants.

Shift Towards Domestic Workforce

The UK government has made clear its intention to prioritise domestic workers by investing in training and upskilling the local workforce, rather than relying on overseas labour. Sectors such as technology, healthcare, engineering and hospitality—traditionally dependent on migrant workers—are already feeling the impact.

Several employers in these industries have reportedly frozen hiring, citing increased tax liabilities and rising employment costs outlined in the latest budget.

Tougher Outlook for Overseas Workers

With the UK unemployment rate crossing five per cent, economists warn that job opportunities for foreign workers are likely to become increasingly scarce in the coming years. The tightening of immigration norms, coupled with rising costs for employers and applicants alike, is expected to make securing employment in the UK significantly more difficult for overseas candidates.