Refugee Numbers Surge in the UK: Asylum Applications Hit 20-Year High as 30,000 Remain In Hotels – But Who Pays the Bill?
- TBA
- Sep 17
- 4 min read
Last week, the High Court ruled that the Bell Hotel in Epping, England, must stop accommodating asylum seekers, with around 140 residents ordered to leave by 12 September 2025.
The case followed charges against an asylum seeker accused of attempting to kiss a 14-year-old girl. The incident sparked local protests and fuelled wider demonstrations across the country against the growing number of asylum seekers entering the UK.
Despite a later appeal reversing the decision, the precedent set has since emboldened other communities, where residents have staged further protests outside hotels used for asylum accommodation, demanding action from local councils and even calling for an end to the government’s resettlement programme. The government now faces mounting pressure on changing immigration policy.
Asylum applications at record levels
Home Office data shows that the UK received 111,000 asylum applications in the year to June 2025 – a 14% increase on the previous year, and higher than the previous peak in 2002.
There are currently 71,000 unresolved cases awaiting an initial decision, affecting around 91,000 individuals, including family members. Meanwhile, 32,059 asylum seekers are still being housed in hotels – slightly higher than when Labour came to power, but well below the 2023 Conservative-era peak of 56,000.
Despite the decline, government figures released in July showed that hotel accommodation alone cost £2.1 billion.
In total, asylum-related spending in the year to March 2025 reached £4.76 billion, covering direct cash support and housing costs. This figure excludes the costs of policing Channel crossings.
Who pays for asylum accommodation?
Many people ask: where does the money for asylum seekers and refugees actually come from? Is it funded directly by taxpayers’ contributions?
General taxation
The UK has no dedicated immigration tax system.
Most asylum-related expenditure comes from the central government’s general taxation pool. Income tax, VAT, corporation tax and other revenues are combined into the public spending pot, from which the Home Office budget is allocated through the annual Budget or supplementary budgets.
According to the Office for Budget Responsibility (OBR), UK public spending for 2024/25 is expected to reach around £1.28 trillion, with a portion assigned to the asylum system.
Higher visa and immigration fees
The Home Office also offsets part of its costs through service charges.
In the Spring Budget 2025, the government confirmed that visa and passport fees would increase from April 2025 to help cover additional Home Office expenditure. While not ringfenced for asylum costs, this measure highlights how migration-related fees now act as a fiscal buffer.
However, asylum seekers do not pay the Immigration Health Surcharge (IHS), so higher fees do not translate into direct cost recovery from refugees themselves.
Effectively, asylum accommodation is paid for by general taxpayers, alongside international students and legal migrants who contribute through elevated visa fees.
The wider impact of rising asylum numbers
For many UK taxpayers, the growing number of asylum seekers represents not just a financial cost but also added strain on public services and housing. Calls to reform or even halt asylum resettlement are growing louder.
Since 2022, responsibility for asylum accommodation has expanded to around 282 local councils, bringing the issue into communities nationwide. This has raised challenges for social cohesion and local policing.
In addition, asylum seekers are typically entitled to basic healthcare and education for their children, which places extra pressure on the NHS and local schools.
The view from TB Accountants
The UK is engaged in a difficult balancing act.
On one hand, it must uphold international refugee conventions and demonstrate a commitment to human rights and humanitarian obligations.
On the other hand, the government is under pressure to tighten border controls and deter illegal migration in response to public opinion and taxpayer concerns.
Labour pledged during the election campaign to eliminate the asylum backlog and phase out hotel accommodation by the end of the current parliamentary term in 2029, projecting annual savings of £1 billion.
However, while progress has been made in reducing the backlog, record new application numbers suggest that the financial and social pressures remain as strong as ever.
The global refugee crisis is therefore set to be one of the toughest tests of Labour’s ability to govern effectively – and possibly one of the most decisive issues in future UK elections.
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