Are UK work visa costs taxable for employees?
There are lots of reasons why you would want to bring an overseas employee to work in the UK. It’s usually for:
- Inter-company transfers to exchange and grow international experience.
- Senior management coming to help with the running of the UK business.
- Expanding employees’ skills to transfer to different offices.
- Filling gaps in recruitment needs where suitable local candidates haven’t been found.
Post-Brexit, the cost burden of bringing employees from overseas to work in the UK has greatly increased. The European pool of workers is now subject to immigration controls, meaning the use of immigration lawyers is increasing to meet the strict requirements. These costs are making the process very expensive, especially when you include the fixed amounts for the visa itself.
What does it cost to get a UK work visa?
As well as any legal fees to use an immigration specialist, there are fixed costs to get a work permit for an employee coming to the UK. Here’s a selection of the main costs for 2026.
Employer-only costs that can’t be passed onto the employee
For a medium or large employer:
- Sponsor licence: £1,682.
- Certificate of sponsorship (per employee): £525.
- Immigrations skills charge (per employee): £1,320 for first 12 months and £660 for each additional six months.
Employee borne costs:
- Skilled worker visa: up to £1,865 depending on circumstances.
- Immigration healthcare surcharge: £1,035 per year.
There may be more fees to take into account, such as an assessment of an overseas qualification or to use the priority visa service.
Is the visa a taxable benefit in kind?
Yes. If the employer pays for the skilled worker visa or the immigration healthcare surcharge, these are taxable benefits in kind. HMRC says the certificate of sponsorship and immigration skills charge are also taxable benefits in kind despite the employer not being allowed to pass the costs onto the employee. The sponsor licence relates to all employees and should not be a taxable benefit, though.
Legal costs to get these documents also form part of the taxable benefit. The taxable benefit on a three-year posting to the UK for a large employer could easily be close to £10,000 before taking into account additional legal fees.
Is there any tax relief available against this taxable benefit in kind?
HMRC has confirmed that the cost of obtaining a visa to come to the UK is a travel expense and tax relief may be available. However, if the individual is already in the UK (eg renewing a visa), the visa costs don’t count as travel expenses and will be fully taxable.
Before 6 April 2025, non-UK domiciled individuals coming to the UK were not taxable on travel between their home country and the UK for their first five years. Even though non-domicile status has ended, the relief is still available for qualifying new residents or non-UK residents.
A qualifying new resident is someone who has not been a UK tax resident in the 10 tax years before their arrival. In contrast to the old non-domicile rules, a UK national can claim relief where they meet the 10 years of non-residence criteria. Qualifying new residents can claim relief on travel expenses for the first four tax years.
Where an employee is joined by their family, any visa costs for those family members will also be taxable on the employee. Once again relief may be available for qualifying new residents relating to their spouse and minor children.
Are there any other reliefs available?
If the employee doesn’t qualify as a new resident, relocation relief may still apply. Though, that relief is limited to a total of £8,000 and is likely to have been swallowed up by other qualifying relocation expenses such as transportation.
Where the individual is coming to the UK on assignment for 24 months or less, relief may be available under the temporary workplace rules.
For individuals who can’t benefit from any of the above, the combined cost of obtaining the visa will be taxable on the individual. Once the second phase of mandatory payrolling of benefits starts in April 2028, affected employees are likely to find significant deductions going through their payslips.
What do employers need to do?
We’re aware that HMRC has been working with a third party (presumably the Home Office) to identify employers who have issued certificates of sponsorship. HMRC is now raising questions with those employers to determine how they have treated these costs (focusing on the certificate of sponsorship and immigration skills charge).
Where they have not been reported either on the employee’s P11D or as part of a PAYE settlement agreement, HMRC states that there has been a reporting failure.
Employers need to review their processes for determining if visa costs are taxable on the employee. When claiming relief under the qualifying new resident rules, the employer should not automatically assume that an individual meets the criteria. Ten years is a long time, and employees themselves may not be aware what their tax residence status was in previous years, especially if they had no income to report at the time – like those who studied in the UK for a year or two.
To discuss how UK work visa costs should be treated for tax and reporting purposes, or to review your current compliance approach, please get in touch with Jo Webber, Ian Jones or your usual RSM contact.