The government has revealed that thousands of people applying for visas in the UK were wrongfully charged for language tests, but the Home Office is still requesting the payments because it needs the money.The government hurried to deal with what it called a "tough" issue. Since 2008, a business known as Ecctis Ltd. has been collecting payments for certification evaluations and language tests and transferring them to the government without any legal backing, leaving the system vulnerable to legal challenges.The discovery was made when the government sought to renew the company’s contract earlier this year.

The Home Office is now seeking to rush through legislation to make it legal to charge up to £400 for the tests.Ministers are also looking at either establishing a “restitution” scheme whereby millions of pounds could be reimbursed to visa applicants, or tabling retrospective legislation to avoid a payout.

The House of Lords secondary legislation scrutiny committee, which is examining a proposed change to the law to make future charges legal, said it was shocked to discover that in the meantime the Home Office was continuing to bill visa applicants for the services.charging for these services would have significant potential impacts on the public purse”.

She wrote: “Given the options under consideration and the significant impacts associated with suspending charging for these services, the department has determined that fees should continue to be charged until such a time as the position in respect of previously charged fees is confirmed.

“This will also serve to ensure there is consistency of treatment in both the fees that have been historically charged and those charged in the period between the issue being identified and the appropriate legislation coming into force. The department, however, appreciates the challenging nature of this position given the lack of extant legal authority for the charging of these fees, and is working at pace to clarify the position.”

The government has informed the Lords committee that it does not know how many people have been affected nor what the cost of refunding them might be but that Ecctis earned £50m from such fees over the last three years.

The Lords committee has criticised the new government for its lack of transparency over the situation and its treatment of visa applicants.

It wrote: “We are shocked that the Home Office puts more weight on consistency with the past approach – which is known to be unlawful – than on consistency with the law as it stands today. We welcome the Home Office considering options for those who have paid inappropriately in the past, but we are concerned about the treatment of current users paying fees now.”

Applicants for a wide range of UK visas must prove their proficiency in English or that they have the appropriate qualifications to work for a designated employer in the UK.Ecctis, a not-for-profit company that manages a number of national agencies, charges £140 plus VAT for English language proficiency tests and £210 plus VAT for qualification equivalency assessments.

Naga Kandiah, a public law solicitor at MTC Solicitors, said the government was mistreating applicants who were already paying large sums for their visas.

He said: “During the current financial crises, it is unfair to place an extra burden on visa applicants to pay fees to sit the English language tests. This is despite the Home Office increasing visa fees to one of the highest in Europe.”

The Home Office has been approached for comment.