Can visa fee refunds really unlock growth for UK employers?

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08/07/2026

Can visa fee refunds really unlock growth for UK employers?

The government recently announced plans to reimburse visa costs for fast-growing companies in a bid to supercharge the start-up economy. But how impactful will this measure really be, asks Victoria Welsh?

The government’s proposal to reimburse visa costs for certain high-growth employers is a welcome acknowledgement of a longstanding issue: the UK’s immigration system is expensive, complex and, occasionally, makes the UK market less accessible for the very businesses it is trying to attract.

For companies operating in the government’s strategically important sectors such as clean energy, life sciences and digital and technology, access to international talent is essential.

These businesses often rely on highly specialised skills that are not readily available in the domestic labour market, particularly at the pace required to scale. Reducing the cost of hiring overseas workers is therefore a sensible policy objective.

But the real question is not whether the proposal is well-intentioned. It is whether it will work in practice.

What does the scheme offer?

The scheme itself – a visa fee reimbursement grant for ‘scale-ups’ — is far more limited than it first appears.

It is not a broad-based reduction in immigration costs, nor does it address the structural challenges within the sponsorship system. Instead, it is a targeted grant aimed at a very specific group of businesses.

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To qualify, companies must meet strict scale-up criteria, including demonstrating 20% year-on-year growth over a three-year period and having had a minimum employee base of 10 employees three years ago.

These are historic thresholds, meaning businesses either qualify already or they do not. Combined with the narrow focus on ‘high growth’ sectors, this dramatically limits the number of companies likely to benefit.

This is particularly relevant in digital and technology, where many innovative companies are still in early or emerging stages of growth.

These businesses may be developing cutting-edge capabilities – from artificial intelligence to advanced data infrastructure – but will not meet the historic growth criteria required to qualify, simply because they’ve not been operating long enough yet.

Reducing the burden

For those who do meet the criteria, however, the scheme could still prove valuable.

Sponsoring overseas workers is expensive, with employers required to cover all sponsorship costs and often expected to fund visa application fees and the immigration health surcharge for the sponsored worker and, often, also dependants.

To put that into context, even a straightforward three-year sponsorship for a single worker can exceed £6,000 in core visa and sponsorship fees alone, before legal or priority processing costs are added.

With funding capped at £5,000 per worker and £25,000 per company, per year, the scheme is clearly designed to offset that upfront burden.

Reducing even part of this cost could help businesses move ahead with hires they might otherwise delay – particularly where critical skills cannot be sourced domestically.

However, that value depends entirely on what ‘visa costs’ the reimbursement will include or whether £5,000 per worker will be based on the full sponsorship period or the annualised cost.

Without that clarity, businesses are being asked to make recruitment decisions without knowing the true level of support available.

What are the limitations?

In fast-moving sectors such as technology, hiring demand is not confined to senior specialists. Companies rely heavily on mid-level and operational roles – including data analysts, IT support technicians and infrastructure specialists – to scale effectively.

However, the reforms last summer removed around 180 roles from eligibility, including several of these roles, which employers continue to struggle to fill.

A condition of sponsorship for these jobs is that dependants are excluded, resulting in lower take-up regardless of any visa fee refunds.

Of course, businesses must already hold a sponsor licence in order to sponsor workers and therefore to access the scheme, further restricting the effective reach.

Some businesses may be thinking this scheme could open up recruitment budgets and justify a sponsor licence application.

However, applications are increasingly complex, can take weeks or months to prepare and be processed, with refusals exceeding 50%.

A rejection or refusal will cause delays potentially fatal to a business using the scheme, given it is time-limited and operating on a first-come, first-served basis. Once the funding is gone, it’s gone.

Future risks

The most significant risk for many employers may not be visa costs at all, but sponsor licence compliance.

High-growth businesses are often changing rapidly, through investment, restructuring ownership or international expansion. These developments can all have implications for sponsor compliance obligations.

At the same time, Home Office compliance enforcement is stricter than ever, with compliance checks and audits, and revocations, at their highest level for many years.

Compliance breaches that businesses may not always anticipate are causing significant upheaval. Employers considering the scheme therefore, need to assess not only the upfront benefit of reimbursement, but the long-term compliance burden that comes with sponsorship.

High-growth businesses are often changing rapidly… These developments can all have implications for sponsor compliance obligations

Where a grant recipient experiences compliance issues, it is not clear how the scheme’s terms will interact with this. For example, if a business receives reimbursement and subsequently loses its sponsor licence, could funding be clawed back?

There are also longer-term cost implications that the scheme does not address. Sponsorship is not a one-off expense.

A typical hire may require visa extensions after three years, and future settlement routes – particularly if Earned Settlement reforms extend qualifying periods – could mean employers are supporting costs over a much longer period, potentially up to ten years. Businesses must therefore consider the full lifecycle cost of international hires, not just the initial visa.

A welcome step

Visa fee reimbursement is a welcome step, particularly for growth businesses that rely on international talent.

However, it remains a narrow intervention within a much broader sponsorship system that continues to present financial, administrative and compliance challenges.

If the government wants the scheme to have a meaningful impact, it should provide greater clarity on what costs are covered, address the wider barriers facing sponsors and consider extending support to earlier-stage businesses with strong growth potential.

Without those changes, the policy risks helping only a small number of companies while leaving many of the UK’s most innovative businesses facing the same challenges as before.