The Autumn Budget 2026 has changed the tax treatment of two payments employers make when sponsoring a worker: the Immigration Skills Charge and the Certificate of Sponsorship fee. Under the change, an employer's payment of either charge will not be treated as a taxable benefit in kind. The change applies to payments made on or after 28 October 2026, and the government says it will introduce legislation in Finance Bill 2026-27 to give it effect. This is general information about a Budget announcement, not personal immigration or tax advice; individual cases should be checked against official guidance or a regulated adviser.

What the Budget changed

Before this change, there was no specific exemption, and views differed on whether employer-paid sponsorship fees should be treated as a taxable benefit. In some cases, HM Revenue and Customs took the view that they should. Legal and tax commentators have described the announcement as welcome certainty for employers that pay these fees on behalf of a worker, while noting that it does not resolve the position for payments made before 28 October. Employers with open enquiries or PAYE Settlement Agreement filings have been advised to consider the potential impact and to watch for updated HMRC guidance.

Why employers welcomed the clarification

The measure is narrow. It concerns only the tax treatment of these two employer payments; it does not change Skilled Worker salary thresholds, visa fees, the Immigration Health Surcharge, or any other part of the sponsorship system. Separate Budget announcements on salary thresholds, the Graduate visa and curtailment periods are subject to their own timetables, mostly in spring 2027. Employers should therefore not treat this tax clarification as a wider relaxation of sponsorship rules, and should confirm the current rules on GOV.UK before acting.

What has not changed

Sources: GOV.UK, Budget 2026, Pinsent Masons.