UK Home Office made £329 million profit from Skilled Worker visas in a year but will not replace the Sponsor Management System until late 2028

The National Audit Office (UK independent spending watchdog) has released a report about the Skilled Worker visa, re-branded in 2020 from the Tier 2 (General) visa route. 

This report confirms that in 2023-2024 the cost of running the Skilled Worker visa route was around £109 million and the Home Office received about £438 million from Skilled Worker applications, suggesting a net profit of £329 million to ‘fund all areas of its work on immigration’. The report does not go into further detail about where the money is spent or how these figures have been reached.

A large proportion of this ‘profit’ comes from the Immigration Health Surcharge that helps the NHS (£1.8 billion in 2023-24) across the UK and the Immigration Skills Charge (£0.7 billion), which is meant to fund the Department of Education by the National Audit Office says that the DfE does not directly receive this income, so it is unclear how the money is allocated by HM Treasury, or spent.

The report also highlights the following:

1. In 2023-24, £2.6 billion was raised from all visa fees. Visa and citizenship fees are increasing again in April 2025.
2. The current ‘Sponsor Management System’ (an online portal used by sponsors to generate certificates of sponsorship and report changes to the Home Office) will not be updated until the end of 2028. By then it would have been in operation for 20 years. There are few websites that are fit for purpose after two decades.
3. Since 2021, 85,500 people have had their Skilled Worker visa application disappear from the visa casework system. This would suggest investment in IT is critical.
4. Immigration audits are up by almost 50%, predominantly digital audits. 
5. In 2024 there were 46 full time compliance officers. In 2021 there were 65.
6. The Home Office gave £200,000 of ex-gratia payments and priority service refunds in just 6 months of 2024 due to system errors. 

The report made some interesting findings:

1. Sponsor guidance is complicated and difficult to navigate.
2. The Home Office does not sufficiently understand the root causes of common issues with applications [for Skilled Worker visas].
3. An application is deemed ‘complex’ by the Home Office when it cannot be resolved within the service standard processing time. This happened in over 30% of applications during the summer peak in 2023. 
4. The Home Office does not analyse complaint actions and does not have good management information on the outcomes of administrative reviews.
5. The Home Office does not fully understand what happens to people who have entered the UK on Skilled Worker visas. Apparently, exit check analysis on Skilled workers have not been undertaken since 2020.
6. The Home Office and HMRC share some data on salaries and working hours, but this is not yet sufficient to allow the Home Office to identify non-compliance.
7. [The Home Office] does not fully understand how the route is being used, its contribution to the economy, or impacts on skill shortages across different sectors and regions.
8. The Home Office cannot be confident it is achieving value for money from its management of the Skilled Worker visa route.

I hope that the findings by the National Audit Office are considered carefully by the Home Office and changes are made to ensure value for money and that the IT systems are fit for purpose given the move to a fully digital immigration system.

Immigration law and policy is subject to regular change. If you have any questions, please contact Paul McCarthy.