Employer paid visa and immigration fees

When an employer pays an employee’s own visa application fee or immigration health surcharge, it is meeting a bill the employee owes, so the payment is normally taxable earnings and attracts Class 1 National Insurance. Fees the employer owes as a sponsor, such as the certificate of sponsorship fee and the immigration skills charge, are a different matter because they are not the employee’s debt. The £8,000 relocation exemption only covers listed categories of removal cost, and visa fees are not named in them.

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Who is legally responsible for each immigration cost?

The tax answer starts with who owes the money, so it helps to separate the costs of a typical sponsored work visa:

Cost	Who owes it	Where the rule is set out
Visa application fee	The applicant, and each dependant for their own application	GOV.UK Skilled Worker visa guidance
Immigration health surcharge	The applicant, paid as part of the online application	GOV.UK healthcare surcharge guidance
Certificate of sponsorship fee	The sponsoring employer	GOV.UK sponsor guidance
Immigration skills charge	The sponsoring employer	GOV.UK sponsor guidance

GOV.UK’s Skilled Worker guidance tells the applicant they will need enough money to pay the application fee and the healthcare surcharge, and gives the example of a two year application from Argentina costing £819 plus £1,035 a year surcharge, £2,889 in total. Dependants aged 18 or over usually pay the same surcharge. By contrast, the sponsor guidance says the employer must pay the certificate of sponsorship fee and the immigration skills charge itself, and that its licence may be revoked if it asks the sponsored worker to pay those fees or any costs linked to its application.

Why is paying the employee’s visa fee taxable?

HMRC’s pecuniary liability principle at EIM00580 says that where an employer pays a debt that the employee owes to a third party, the payment is money’s worth and counts as earnings under section 62 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA). It makes no difference whether the employer pays voluntarily or under a contract. A visa application fee or surcharge paid by the applicant is exactly that kind of debt, so an employer that pays or reimburses it is normally paying earnings.

Paying for the employee’s partner and children is no different. EIM20504 explains that a benefit provided by the employer for a member of the employee’s family or household, which includes a spouse or civil partner and children, is charged on the employee.

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Can the relocation exemption cover visa costs?

The exemption in Part 4 Chapter 7 ITEPA removes tax from the first £8,000 of qualifying removal expenses and benefits (EIM03103). The expenses must fall within the categories in section 272, which EIM03108 lists as disposal of the old home, acquisition of the new home, transporting belongings, travelling and subsistence, domestic goods for the new home and certain bridging loan costs. Visa fees and the immigration health surcharge are not named in any of those categories.

Travel is covered. Section 281 includes travel facilities for the employee and family for preliminary visits and for the move itself from the former home to the new one. EIM03116 adds that a foreign national coming to the UK may get a separate deduction for travel costs under the overseas employment rules, and where that applies the travel falls outside the £8,000 limit, so the employee can have the travel costs and up to £8,000 of removal costs free of tax.

The other conditions still have to be met: the employee must change their main residence because of the new job or a change of duties or workplace, the new home must be within reasonable daily travelling distance of the new workplace, and the costs must be met by the end of the tax year after the one in which the job starts. EIM03104 says HMRC will usually accept that the main residence has changed if the employee has become UK resident. Our guide to the relocation expenses exemption covers the categories and time limit in detail.

An employer that wants to treat visa fees or the surcharge as part of the £8,000 is therefore taking a position that the legislation and HMRC’s published list do not support in terms, and should record its reasoning. Visa extensions and switching applications made from inside the UK, with no change of main residence, are outside the relocation exemption altogether.

What about the sponsor’s own fees?

The certificate of sponsorship fee, £525 per certificate on a Worker licence, and the immigration skills charge are charges the sponsor owes. The immigration skills charge for a medium or large sponsor is £1,320 for the first 12 months and £660 for each further six months, and no charge is due for the worker’s dependants. Because neither is a debt of the employee, the pecuniary liability principle does not apply to them. It is still sensible to keep evidence that the sponsor paid them as its own liability, from its own account, and never passed them on to the worker.

How are taxable visa payments reported?

The method depends on how the employer pays. EIM00590 explains that where the employer pays the employee’s bill direct to the third party, PAYE cannot be operated on the payment, so it is reported on form P11D. Where the employer gives the employee the cash to pay, or reimburses them, PAYE must be operated through payroll like salary. For National Insurance, NIM13180 says that where the employee made the contract and the employer pays or reimburses, the payment is Class 1 earnings, not a Class 1A benefit. An immigration application is made by the applicant, so in most cases the payment is Class 1 earnings in the pay period it is made. See our guides to benefits in kind and form P11D and to whether items attract Class 1 or Class 1A.

Employers that prefer to bear the tax can consider a PAYE Settlement Agreement for items that are minor, irregular or impracticable. GOV.UK lists relocation expenses over £8,000 as an example of an irregular item, but regular or contractual payments cannot be included.

Illustration: a new hire from abroad

Illustration only. A medium sized company recruits a software engineer from Argentina on a two year Skilled Worker visa. It pays the £819 application fee and £2,070 surcharge for the engineer, the same again for her husband, a £525 certificate of sponsorship fee and £2,640 of immigration skills charge. It also pays £3,000 for flights for the couple and £2,500 to ship their belongings.

The certificate and skills charge, £3,165, are the company’s own liabilities as sponsor.
The flights and shipping, £5,500, fall within the relocation categories and are inside the £8,000 limit, assuming the other conditions are met.
The two application fees and two surcharges, £5,778, are the couple’s own liabilities. On HMRC’s published guidance they are taxable on the engineer, through payroll if reimbursed or on form P11D if paid direct, with Class 1 National Insurance in either case.

What mistakes come up?

Treating every immigration cost the same way. The sponsor’s fees and the applicant’s fees have different tax results.
Assuming the £8,000 relocation exemption covers anything connected with moving to the UK. Only the listed categories qualify.
Forgetting the dependants. Fees and surcharges paid for a partner and children are taxed on the employee.
Putting a clawback clause in the contract that requires the worker to repay the certificate of sponsorship fee or skills charge if they leave. The sponsor guidance warns that asking the worker to pay these costs can lead to the licence being revoked.
Paying the extension fee years later and treating it as relocation. There is no change of residence, so the exemption does not apply.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.