UK Immigration Health Surcharge 2026: Refund Logic, Exemption Rules, and What HR Systems Need to Handle

The UK immigration health surcharge (IHS) is a mandatory prepaid contribution to NHS services, levied on most non-EEA visa applicants. As of 2026, the standard rate is £1,035 per person per year (£776 for students and Youth Mobility visa holders). For HR teams sponsoring workers and their dependants on multi-year Skilled Worker visas, this is a material budget item that belongs in your cost modelling.

This post covers the exemption logic, refund edge cases, and what your immigration workflows need to track.

Current rate structure

Total IHS = annual rate × visa duration in years (fractions round up to the next full year for payment; refunds apply only to complete unexpired full years).

Example: 5-year Skilled Worker visa for a principal applicant + partner + 1 child (under 18):

• Principal: £1,035 × 5 = £5,175
• Partner: £1,035 × 5 = £5,175
• Child: £776 × 5 = £3,880
• Total: £14,230

Exempt categories — your system needs to flag these

Not all visa applicants pay the IHS. Your HR intake workflow should capture enough information to determine whether an exemption applies before the application goes to UKVI. Exemptions include:

Route-level exemptions (surcharge never applies):

• Standard Visitor and Short-Stay Visitor visas
• Transit visas
• Some Settlement (ILR direct) applications — check current UKVI guidance

Category-level exemptions:

• NHS and registered social care workers sponsored by an eligible employer (and their dependants) — this exemption has been in place since 2020 and remains active
• Children in local authority care
• Individuals granted leave under the National Referral Mechanism (modern slavery / human trafficking)
• Afghan nationals on ARAP, ACRS, or the Afghan Citizens Resettlement Scheme
• Ukrainian nationals on the Ukraine Family Scheme and Homes for Ukraine Scheme

Fee-waiver holders: If UKVI grants a fee waiver on human rights grounds, IHS is also waived automatically.

For NHS-sponsored workers specifically: if you're an NHS trust or a registered adult social care provider, verify that your sponsorship record is correctly categorised in the Sponsor Management System (SMS). The IHS exemption is tied to the sponsoring organisation's registration, not just the route.

Refund logic

The IHS is paid upfront. Refunds apply in the following scenarios — and your compliance system should track these if you're managing sponsored employees:

Full refund

• Visa refused: Automatic refund, no separate claim needed
• Application withdrawn before decision: Full refund

Partial refund (complete unexpired years only)

• Permanent departure from UK before visa expiry: Applicant can claim IHS refund for remaining complete years. Fractions of years are non-refundable.
• Grant of ILR or British Citizenship before visa expiry: IHS for the period beyond the settlement grant date is refundable — complete years only.

No refund

• If the applicant leaves temporarily but intends to return
• If less than one complete year remains on the visa

Refund process: Claims go to the UKVI IHS Refund Service. Processing typically takes several weeks. The claim must be submitted by the applicant, not the sponsor.

What to build in your HR tracking system

If you're building or maintaining an HR immigration module, here's what the IHS logic requires:

def calculate_ihs(applicant_type, visa_duration_years, is_nhs_employer=False):
    """
    Calculate total IHS cost for a visa application.
    Returns 0.0 if applicant is exempt.
    visa_duration_years: float, e.g. 5.0 or 2.5
    """
    EXEMPT_TYPES = ['visitor', 'transit', 'settlement_direct']

    if applicant_type in EXEMPT_TYPES:
        return 0.0

    if is_nhs_employer:
        return 0.0  # NHS/social care worker exemption

    ANNUAL_RATES = {
        'skilled_worker': 1035,
        'family': 1035,
        'student': 776,
        'youth_mobility': 776,
        'dependent_under_18': 776,
    }

    import math
    rate = ANNUAL_RATES.get(applicant_type, 1035)
    # IHS is calculated on rounded-up years
    years_charged = math.ceil(visa_duration_years)
    return rate * years_charged


def calculate_refund_on_settlement(ihs_paid, original_visa_years, years_remaining):
    """
    Calculate IHS refund when worker achieves ILR before visa expiry.
    Only complete full years are refunded.
    """
    import math
    annual_rate = ihs_paid / original_visa_years
    complete_years_remaining = math.floor(years_remaining)
    return annual_rate * complete_years_remaining

Fields to track per sponsored worker:

• IHS payment reference number (from application confirmation)
• IHS amount paid
• Visa start date and expiry date
• NHS employer flag (for exemption)
• ILR / citizenship grant date (to trigger refund alert)
• Departure date (if applicable)

Integration with application cost modelling

If you're building a visa cost calculator or an immigration budget tool, IHS is one of several line items that needs to compound across dependants. ImmigrationGPT provides a reference implementation for calculating full visa costs, IHS included, across common UK visa routes. The sponsor register search also lets you verify whether an employer holds an active licence before your team begins the sponsorship process.

Current IHS rates in context

The standard rate has increased significantly since the surcharge was introduced at £200/year in 2015. The trajectory:

The 2023 increase (from £624 to £1,035) was the largest single jump. As of this writing in 2026, the rate remains at £1,035 — but HR teams should monitor UKVI announcements, as the rate is set by statutory instrument and can change with relatively short notice.

This post is for informational and technical reference purposes. UK immigration rules change frequently. For advice specific to your organisation's circumstances, consult a regulated immigration adviser.