UK Immigration Updates: Sponsorship Costs and Electronic Travel Authorisation

The UK Home Office has announced updated policies regarding sponsorship costs for Skilled Workers that will have significant implications for employers hiring or sponsoring international talent.

From January 8, 2025, the next phase of the Electronic Travel Authorisation (ETA) scheme becomes mandatory for non-European nationals, marking a significant shift in how individuals travel to the United Kingdom. This development represents a major change in the entry process and will reshape the way people plan their journeys.

The ETA scheme emphasises the need for proper planning and compliance, with the introduction of new administrative requirements that businesses must address to avoid disruption to their operations.  

CHANGES TO SPONSORSHIP COSTS FOR SKILLED WORKERS

The UK government has implemented a significant policy shift regarding sponsorship costs for Skilled Workers. Effective December 31, 2024, sponsors are prohibited from passing on certain sponsorship costs to Skilled Workers. This change aims to address concerns about work-related debt and exploitation.

PROHIBITED COSTS

The following costs are now prohibited from being passed on to Skilled Workers:

• Sponsor Licence Fee: This includes the fee for new sponsor licence applications or adding the Skilled Worker route to an existing licence, submitted from December 31, 2024 onwards. 
• Certificate of Sponsorship Fee: The fee for a Certificate of Sponsorship assigned on or after December 31, 2024 is also prohibited. 

These prohibitions align with the existing rule against passing on the Immigration Skills Charge to workers. Other immigration-related costs, such as visa application fees, Home Office commercial partner service charges, and Immigration Health Surcharges, can still be recouped by the employer.

PENALTIES FOR NON-COMPLIANCE

Non-compliance with these new regulations can lead to the revocation of the sponsor licence. This can result in reputational damage, financial losses, and significant disruption for existing sponsored workers.

ACTIONS FOR EMPLOYERS

Employers should take the following steps to ensure compliance:

• Review and Update Policies: Review and update internal immigration policies and employment policies related to sponsorship costs. 
• Review and Update Agreements: Review and update employment contracts, side letters, and "clawback" agreements related to sponsorship costs. 
• Budgetary Considerations: Assess the impact of these changes on the company’s budget for immigration and its potential consequences for future recruitment and sponsorship. 

ELECTRONIC TRAVEL AUTHORISATION SCHEME

As set out in our previous LawFlash, the ETA grants permission to travel to the United Kingdom—similar to the US Electronic System for Travel Authorization. The ETA is applicable for UK visitors who do not need a visa for tourism, transit, visiting family and friends, business, or short-term study. It also applies for those coming to the United Kingdom for up to three months on the Creative Worker visa concession and for those coming for a permitted paid engagement.

It is not applicable for those who hold a UK visa, those with permission to reside to live, work, or study in the United Kingdom, or for British or Irish nationals.

KEY DATES AND ELIGIBILITY

The scheme will be mandatory for non-European nationals, including US nationals, from January 8, 2025.

The scheme has been live since October 2023. The roll out dates are as follows:

• Non-European Nationals: As of November 27, 2024, eligible non-European nationals can apply for an ETA for travel to or transit through the United Kingdom from January 8, 2025. 
• European Nationals: Eligible European nationals can apply from March 5, 2025, and will need an ETA from April 2, 2025. 
• Universal Requirement: From April 2025, all travellers to the United Kingdom (except British and Irish citizens) will need either an ETA or an eVisa. 

ETA VS. VISA

The ETA is not a visa and does not grant the right to live or work in the United Kingdom. Visitors are still bound by the visitor visa rules and must comply with these regulations. Those needing to work in the United Kingdom must obtain the appropriate visa before traveling.

IMPLICATIONS FOR BUSINESSES

Employers should review their travel needs for the next six to eight months to ensure affected overseas employees have the necessary ETAs. Failing to obtain an ETA can lead to delays or refusal of entry to the United Kingdom.

Employers may also wish to provide updates to their employees on the rollout of the scheme.

Employees should ensure that they have sufficient passport validity and ensure a timely submission of their ETA application. Employees should flag any concerns they may have about the application as soon as possible.

EUROPEAN TRAVEL INFORMATION AND AUTHORISATION SYSTEM

Businesses should also be aware of the upcoming European Travel Information and Authorisation System, a similar system being implemented by the European Union. This will affect British nationals traveling to the Schengen Area. Travelers from over 60 visa-exempt countries, including the United Kingdom, United States, and Canada, will be impacted. Holders of valid Schengen visas will not require European Travel Information and Authorisation System authorisation.