Prohibited Cost Recovery (Effective 31 December 2024)

On 31 December 2024, UKVI updated its Sponsor Guidance to clarify what can and cannot be recouped from sponsored workers. Sponsors must not seek to recover the following: 

• Certificate of Sponsorship fee (£525 standard)

• Sponsor licence fees and associated administrative costs (e.g. £1,476 for medium/large sponsors)

• Immigration Skills Charge

• Legal or administrative costs linked to the sponsor licence management or visa processes, especially where the worker has no genuine choice in obtaining advice 

⚠️  Non-compliance risks sponsor licence revocation : If UKVI discovers that a sponsor has been recouping these costs, including where agreements merely suggest potential recovery of these costs, it will revoke the company’s sponsor licence.       

New Deduction Rules Introduced on 9 April 2025 

From 9 April 2025, further updates introduced new restrictions on salary deductions. These rules apply to any deductions, including those linked to loans or investments:

• Employers must ensure that any deductions from a Skilled Worker’s salary, do not bring their salary below the required sponsorship thresholds.

• This applies particularly to workers earning just above the minimum salary requirements.

• Average salary over the sponsorship period (e.g. 3 years) is considered in the assessment.

• Exceptions exist for genuine optional benefits, such as salary sacrifice schemes, which do not need to be deducted.

Risks for Employers Providing Loans or Clawback Agreements

• Employers offering loans for visa-related costs (e.g. visa fees, IHS, Priority Service) must ensure repayments do not reduce pay below salary thresholds.

• Clawback agreements (requiring repayment of visa fees upon early resignation) could be treated as loans if triggered and employer must ensure any repayment does not bring the salary below the minimum going rate salary, potentially breaching sponsorship rules.

• These risks are particularly likely where the worker’s salary is only just above the minimum salary threshold or where any repayment triggered is particularly large.

• Sponsors are advised to seek legal advice before enforcing clawback provisions under the new framework.

Current Salary Thresholds

• Until 21 July 2025: £38,700 or the  relevant “going rate” for the role (whichever is higher)

• From 22 July 2025: £41,700 or the “going rate”