As of 9 April 2025, significant revisions to the Immigration Rules and Home Office guidance have been implemented, fundamentally altering the responsibilities of UK sponsors in relation to Skilled Worker visas. These changes primarily focus on how salary thresholds are assessed and introduce new prohibitions and requirements for sponsors. Under the new regulations, a Skilled Worker who appears to earn above the salary threshold and the going rate for their specific occupation may still not satisfy the salary requirements if deductions are applied to their wages. This situation could lead to the initial rejection of the Skilled Worker application or place the sponsor at risk of compliance action for violating their sponsorship obligations. Deductions related to immigration expenses, business or investment costs, and loan repayments will all lower the worker's salary for compliance purposes. However, deductions for genuinely voluntary benefits, such as salary sacrifice schemes, will not be counted as reductions to the net salary. A notable risk arises from how sponsors manage immigration-related costs. Some sponsors may choose to loan the Immigration Health Surcharge and visa application fees upfront, subsequently recouping these expenses through monthly deductions from the worker's salary. If these deductions result in the Skilled Worker's salary falling below the required threshold, the sponsor could find themselves in breach of their obligations. Additionally, any investments made by a Skilled Worker in the sponsor's business will also be treated as deductions under the new rules.

A Tax Alert prepared by EY's People Advisory Services, and attached below, provides additional details.