Home Office Reports £18.7 Million in Erroneous Immigration Health Surcharge Refunds and Recovery Efforts

The Home Office disbursed at least £18.7 million in erroneous refunds under the Immigration Health Surcharge reimbursement scheme because payments were issued for periods not aligned with the underlying IHS payments, GB News reported. The department's annual report for 2025/26 stated that officials are attempting to recoup the funds, though recoverability remains uncertain.

The IHS requires overseas workers to pay £1,035 annually for each year of their visa and students and children to pay £776 per year.

GB News reported that the full extent of the losses is still being calculated. The same report recorded total wasteful expenditure approaching £100 million during 2025/26. This included £22.9 million spent on the Atrium Hotel in Hounslow, west London, under a nine-month contract signed in August 2025 that left the property empty throughout the period.

The contract had been secured in anticipation of a surge in asylum applications that would have caused the Manston processing centre in Kent to breach its legal operational requirements. Improved efficiency measures and lower-than-expected demand meant the hotel was never used.

Additional losses listed in the report were £3.2 million on deportation flights that were subsequently cancelled and classified as fruitless payments.

The Home Office also lost £35.2 million on a contract with CGI IT UK Ltd to upgrade the Police National Database that had been approved in January 2024 and was terminated due to repeated delays, escalating costs, and failure to provide a credible delivery plan.

Separately, the department wrote off £14.9 million on a former Ministry of Defence site at Northeye in Bexhill, East Sussex, after acquiring it to house asylum seekers. The site was never brought into operation due to excessive remediation costs, and the Home Office recovered none of its initial investment.