In guidance that took effect yesterday, the Home Office has inserted a new paragraph SW 14.2A into Appendix Skilled Worker, expressly prohibiting sponsors from counting toward the salary threshold any funds that the migrant later pays back to the employer—whether labelled as ‘investment’, ‘training costs’ or ‘immigration fees’. (fivestarinternational.co.uk) The rules also bar employers from recouping sponsor-licence fees or the Immigration Skills Charge from workers across all sponsored routes.
The change targets a growing practice where companies inflate gross pay on certificates of sponsorship, only to deduct visa costs or require equity ‘investments’ that effectively reduce net salary below the minimum. Compliance auditors found such arrangements in 8 % of sponsor files reviewed in 2025, prompting ministers to act.
![Sponsor-Licence Crackdown Bans Salary Kickbacks and Fee Recovery]()
Breaches will now be treated as a ‘serious compliance failure’ with immediate licence revocation and potential five-year bans on re-applying. Transitional relief allows Tier 2 (General) migrants extending with the same sponsor before 1 December 2026 to continue counting certain guaranteed allowances, but only under strict conditions.
Employers should review payroll practices, update assignment letters and cease any deductions linked to immigration costs. Migrant workers asked to sign repayment agreements should seek advice; contracts that conflict with the new guidance are likely unenforceable under UK employment law.
The change targets a growing practice where companies inflate gross pay on certificates of sponsorship, only to deduct visa costs or require equity ‘investments’ that effectively reduce net salary below the minimum. Compliance auditors found such arrangements in 8 % of sponsor files reviewed in 2025, prompting ministers to act.
Breaches will now be treated as a ‘serious compliance failure’ with immediate licence revocation and potential five-year bans on re-applying. Transitional relief allows Tier 2 (General) migrants extending with the same sponsor before 1 December 2026 to continue counting certain guaranteed allowances, but only under strict conditions.
Employers should review payroll practices, update assignment letters and cease any deductions linked to immigration costs. Migrant workers asked to sign repayment agreements should seek advice; contracts that conflict with the new guidance are likely unenforceable under UK employment law.
Source: Five Star International
