IHS fee increase - you can't budget for it

13 March 2020

It was confirmed in this week’s Budget that the Immigration Health Surcharge (IHS) will be increasing from £400 to £624 per year of the visa. The IHS is a visa fee applicable to overseas nationals for the NHS. The measure also increases the discounted rate for students, their dependants and those applying for Tier 5 (Youth Mobility Scheme) visas from £300 to £470 per year of the visa. In a new tweak to the previous arrangements, the surcharge will be set at the lower £470 rate for all children under the age of 18. 

These fees will be implemented from October 2020 and be applicable to EU citizens submitting visa applications from 1 January 2021.

Migrants to pay twice

The increase was expected because as part of last year’s election campaign the Conservative government announced in November it would increase the IHS to £625. A £1 discount looks like it has been applied. It was only two years ago that the IHS doubled to £400.

The Chancellor indicated that it was right to ask for migrants to contribute more to their use of the NHS, although this does not reflect the fact that many migrants work and thus are additionally paying in, in exactly the same way as British citizens, via NI contributions or that payment is required regardless of use or availability of private health insurance. This is an additional cost for migrants who already face excessive fees in the UK immigration system and will apply to newly arrived EU citizens for the first time from January 2021.

The government has recently indicated plans to introduce a new “NHS visa” category for doctors and nurses where their applications will be prioritised but the IHS fee would still be taken out of their salary on a monthly basis.  This is a good example of the apparent unfairness and illogical use of the IHS. Even doctors and nurses working hard in the NHS, staving off Coronavirus infections and putting themselves at risk in the process, have to effectively pay twice for use of the NHS. 

Who will build the houses and keep the NHS running?

The Budget also raises wider issues for the post Brexit immigration system.  The Chancellor announced what he described as the biggest ever investment in strategic roads and motorways, £5 billion to extend gigabit-capable broadband to the hardest to reach places (a project which remains incredibly labour intensive) and over £1 billion of allocations from the Housing Infrastructure Fund to build nearly 70,000 new homes across the country.

This does raise the question, as we prepare for the end of free movement in December 2020, who will do the work these projects intend to fund?  In a 2017 APPG report, ‘Building on Brexit’, it was noted in the foreword, “The UK’s construction industry relies on EU builders…The industry is already facing a skills crisis exacerbated by a sharp decline in its workforce.”  There is nothing in the new proposed immigration system which would help bridge this gap and facilitate entry to the  UK of many key construction workers needed to begin making good on these Budget commitments. Even before this Budget, the Federation of Master Builders had criticised the new immigration system for hampering “the construction industry’s capacity to deliver on key projects.”  The announcements this week will simply increase demand for these roles.

Similarly, the proposal to recruit an additional 50,000 nurses raises questions about the UK’s ability to attract and retain talent in the health sector at a time when capacity in the NHS will be even more critical as the UK prepares to deal with a major health crisis. Although nurses will be able to qualify under the new immigration system, there will be costs and bureaucracy for EU nurses which would not have existed under free movement and the UK has already seen a reduction in applications for nurses from the EU since the 2016 referendum.

If you have any queries in relation to the above issues or any other matter, please contact a member of the immigration team.  For employers and individuals seeking to rely on the current free movement rules and lower IHS fees, we are happy to discuss options and how best to pre-plan.

About the authors

Katie Newbury is a senior associate in the immigration team at Kingsley Napley.  She has experience across a wide spectrum of UK immigration matters. Her particular expertise includes applications made under Tier 1 of the Points Based System, complex personal immigration matters, as well as the immigration implications of international surrogacy and adoption.

Tim Richards is a solicitor with extensive experience in corporate and private client immigration matters and is responsible for the knowledge management and ‘know-how’ development for the immigration team. Tim has wide-ranging experience across UK immigration law.

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