Sponsor Licence Check Guide UK

Section A: What is a Sponsor Licence?

A sponsor licence is a legal requirement for UK organisations seeking to hire non-UK resident workers under certain work visa routes, such as the Skilled Worker visa.

The sponsor licence forms part of the UK’s points-based immigration system, which replaced free movement post-Brexit and applies to all international workers coming to the UK, excluding Irish citizens.

The sponsor licence ensures that businesses have the legal authority to bring in non-UK employees and meet immigration requirements set by the UK government. It also signifies that the business is trustworthy, capable of meeting legal obligations, and has systems in place to ensure ongoing compliance.

With a sponsor licence, an organisation must follow compliance rules, including maintaining accurate records, reporting changes to the Home Office, and conducting appropriate Right to Work checks. Regular checks by the Home Office ensure that businesses remain compliant and continue to operate within UK immigration laws.

1. Who Needs a Sponsor Licence?

UK organisations looking to hire workers from outside the UK, including the European Economic Area (EEA) and Switzerland, need a sponsor licence. This includes businesses across various sectors, from large corporations to small and medium-sized enterprises (SMEs), that require skilled foreign talent to meet business demands.

Without this licence, companies are unable to issue Certificates of Sponsorship (CoS), which are necessary for employees to apply for a visa.

2. How to Apply for a Sponsor Licence

Sponsor licence applications are made online to the Home Office. You will need to compile extensive supporting documents to evidence that the organisation meets the requirements, which include:

a. The organisation is registered in the UK and operating legally.

b. There are nominated key personnel in place to manage the sponsor licence (e.g., an Authorising Officer and Level 1 user).

c. The organisation has appropriate HR systems in place to monitor and manage sponsored employees effectively.

d. The organisation and its key personnel do not have any unspent criminal convictions related to immigration offences, fraud, or similar crimes.

Table: Sponsor Licence Application Checklist

If the licence is approved, the organisation will be given access to the Sponsorship Management (SMS), which is used to assign Certificates of Sponsorship to sponsored workers, and to manage the licence in accordance with its ongoing compliance duties.

Section B: How to Carry Out a Sponsor Licence Check

While sponsor licence holders gain access to the global talent market, they also take on certain immigration compliance obligations.

Failure to meet these requirements and to keep the licence in good standing can result in severe penalties, including losing the right to sponsor workers, substantial fines, and reputational damage.

Regular sponsor licence checks should be standard compliance practice for organisations employing sponsored workers, to help maintain compliance with Home Office regulations.

1. Why Conduct a Sponsor Licence Check?

Complying with the Home Office regulations requires the organisation to monitor their licence status to ensure they are meeting all legal obligations.

Licence compliance breaches can result in Home Office scrutiny and enforcement action. The Home Office has the authority to impose fines, suspend your licence and ability to sponsor foreign workers, or even revoke the licence altogether in severe cases of non-compliance.

Regularly conducting a sponsor licence check, and checking your licence details and alerts, can act as a valuable prompt to take necessary steps to comply, e.g. updating your company’s address, staff or visa holders’ status, that could otherwise lead to penalties.

It is also advisable to keep more than one Level 1 user to avoid loss of access during absence or resignation.

2. How to Check Your Sponsor Licence: Step-By-Step Guide

Employers should check their sponsor licence status and details regularly using the SMS. They can do this as follows:

Step 1: Log in to the Sponsorship Management System (SMS)

The first step in checking your sponsor licence status is accessing the SMS. This is the UK government’s online platform for managing sponsor licences. You can log in using your username and password provided during the application process.

Step 2: Access the Licence Summary Page

Once logged in, navigate to the “Licence Summary” section within the SMS. This page provides an overview of your business’s sponsor licence, including its status and rating. It is essential to regularly review this page to ensure your licence is in good standing.

Step 3: Review Licence Rating

On the Licence Summary page, check your licence rating. The Home Office assigns ratings such as “A-rated” (full licence) or “B-rated” (requires improvements). If your licence has been downgraded to a B-rating, this indicates non-compliance, and your business will need to take corrective actions as outlined in the Home Office’s compliance plan to restore an A-rating.

Step 4: Review Alerts and Notifications

The SMS platform will display any alerts or notifications about your sponsor licence, including reminders about upcoming compliance checks or the need to update information. Review these notifications regularly and take action as required, such as reporting changes to your business structure, job roles, or sponsored workers.

Step 5: Check for Assigned and Unassigned Certificates of Sponsorship (CoS)

Within the SMS, you can also review how many Certificates of Sponsorship (CoS) your business has been allocated, how many are assigned to employees, and how many remain unassigned. This is crucial for ensuring you have sufficient CoS available for new hires. If you are running low, you may need to request additional CoS from the Home Office.

Step 6: Update Information or Report Changes

If your business has undergone changes, such as a change in address, company directors, or the employment status of sponsored workers, you must report these changes promptly through the SMS. Failing to update information can lead to compliance issues during an audit.

Step 7: Download Licence History

The SMS allows you to download a history of your sponsor licence activity, which can be useful for tracking compliance and ensuring that all reporting obligations have been met. This record can also be helpful during internal audits or in preparing for a Home Office inspection.

Section C: Sponsor Licence Compliance

Compliance involves more than simply obtaining the licence; it requires ongoing diligence in meeting legal obligations, such as maintaining accurate records, promptly reporting any changes in your business or sponsored employees, and staying up-to-date with evolving immigration laws. Non-compliance can lead to penalties, licence suspension, or even revocation, potentially disrupting your ability to hire foreign workers.

Best practices for maintaining sponsor licence compliance include:

1. Accurate and Consistent Record-Keeping

One of the key responsibilities of a sponsor licence holder is maintaining accurate and up-to-date records for all sponsored employees, notably per the provisions of Appendix D. The Home Office may conduct audits at any time, and having poor records can result in fines or licence revocation.

Keep detailed records of all sponsored employees, including:

a. Copies of passports and visas.

b. Right to work documentation.

c. Records of job titles, salaries, and work locations.

d. Attendance records and any reports of unauthorised absences.

Ensure records are securely stored and easily accessible for internal audits or Home Office inspections.

2. Timely Reporting of Changes to the Home Office

Businesses are required to report certain changes to both the organisation and the sponsored workers to the Home Office within specific timeframes.

Notify the Home Office within 20 working days of any significant changes to your business, such as:

a. Change of business address.

b. Change in company directors or ownership.

c. Changes in key personnel responsible for managing the sponsor licence (e.g., Authorising Officer or Level 1 user).

Report any changes in sponsored employees’ circumstances within 10 working days, such as:

a. Changes to their job role, salary, or work location.

b. If an employee’s contract is terminated or they leave the organisation.

c. If a sponsored worker has been absent for more than 10 consecutive days without authorisation.

3. Regular Use of the Sponsorship Management System

The Sponsorship Management System (SMS) is the primary tool for managing your sponsor licence and reporting changes to the Home Office. Staying actively engaged with the SMS ensures that your licence status, employee records, and certificates of sponsorship are always up to date.

Regularly log in to the SMS to check for alerts or notifications from the Home Office. Ensure all changes to company details and sponsored workers are updated promptly, and review and track your Certificates of Sponsorship (CoS) allocation and request additional CoS if necessary to avoid recruitment delays.

4. Conduct Regular Internal Audits

The Home Office can conduct desktop audits or site inspections to assess compliance with sponsor licence requirements. Internal mock audits can help ensure your records, processes, and reporting obligations are in line with Home Office regulations and ready for inspection at any time.

Carry out periodic internal audits of your HR and compliance processes to ensure that all employee records are accurate and complete. Review your procedures for right to work checks, reporting obligations, and record-keeping to identify any gaps.

Ensure your HR systems can quickly generate documents such as right to work evidence, attendance records, employment contracts, visa details and job descriptions, which are typically requested during Home Office audits.

5. Stay Updated on Legal and Policy Changes

Immigration laws and sponsor licence requirements can change over time. Keeping up with these changes ensures that your business remains compliant and can adapt quickly to new regulations.

Regularly review updates from the Home Office, especially changes to the Immigration Rules that may affect your responsibilities as a sponsor.

Subscribe to government or legal alerts that provide updates on UK immigration laws and sponsor licence policies.

Engage with immigration law specialists for guidance and support on any upcoming changes and how they may impact your business.

6. Training for Key Personnel

Key personnel, such as the Authorising Officer, Level 1 user, and HR managers, are central to sponsor licence management. They must be fully aware of their responsibilities to ensure compliance with Home Office regulations.

Provide ongoing training for key personnel on sponsor licence duties, including record-keeping, reporting obligations, and using the SMS.

Ensure that key personnel are aware of the consequences of non-compliance and the importance of timely action.

Assign a backup Level 1 user or additional compliance officers to avoid any disruptions in case of staff turnover or absence.

7. Monitor Employee Visa Expiry and Right to Work

Employers must ensure that all sponsored workers have valid visas and the right to work in the UK. Overlooking visa expiration dates can lead to serious legal and financial penalties.

Implement a system for tracking the visa expiration dates of all sponsored employees. Notify employees well in advance of their visa expiration date and provide support for visa renewals if applicable. Ensure right to work checks are conducted properly for all new hires and that documentation is kept on file.

Section D: Using the SMS for Sponsor Licence Checks & Compliance

The Sponsorship Management System (SMS) is used by employers to manage and administer their sponsor licence.

Managing a sponsor licence involves meeting a range of compliance requirements set by the UK Home Office. Regularly checking your licence status through the SMS allows you to meet your compliance duties and manage compliance risks.

Businesses may encounter several common issues when checking or maintaining their licence, which, if unresolved, can lead to penalties, suspension, or even revocation of the licence.

1. Outdated Company Information

One of the most frequent issues businesses face is failing to update company information on the Sponsorship Management System (SMS). This includes changes to the company’s address, directors, or key personnel, such as the Authorising Officer or Level 1 user.

Businesses must promptly update any changes to their organisation through the SMS. This ensures that the Home Office has accurate records and prevents potential compliance issues. Failure to update details within 20 working days could result in penalties or licence suspension.

2. Failure to Report Changes in Sponsored Workers’ Employment

Another common issue is the failure to report changes to the employment status of sponsored workers. This includes changes in job role, salary, or work location, as well as situations where a worker leaves the company or switches to a different visa category.

Businesses are required to report any significant changes in a sponsored worker’s circumstances within 10 working days through the SMS. Ensure that HR or the responsible staff are well-informed about this requirement to prevent lapses in reporting, which could lead to fines or a downgraded licence.

3. Non-Compliance with Record-Keeping Obligations

Many businesses fall short of maintaining proper records for sponsored workers, including right to work documentation, visa expiration dates, and proof of salary payments. These records are essential for passing a Home Office audit.

Implement a robust internal system for maintaining all necessary documentation, including digital copies. Regular internal audits should be conducted to ensure that all required information is up-to-date and readily available in case of a Home Office inspection.

4. Insufficient Monitoring of Sponsored Workers

Failure to properly monitor sponsored workers, particularly in terms of attendance and reporting unauthorised absences, is a common issue that can lead to non-compliance.

Ensure that your business has a system in place for tracking employee attendance and reporting absences of more than 10 consecutive working days to the Home Office. This is required under the sponsor licence conditions and helps maintain your compliance status.

5. Downgraded Licence Rating

The Home Office can downgrade a sponsor licence from an A-rating to a B-rating if compliance issues are identified, such as failure to meet reporting obligations or maintain proper records.

If your licence is downgraded, the Home Office will provide a compliance action plan outlining the steps you need to take to restore your A-rating. Address these issues promptly, follow the plan carefully, and work with an immigration lawyer if needed to ensure that your business meets all compliance standards.

6. Insufficient Allocation of Certificates of Sponsorship (CoS)

Businesses sometimes run out of Certificates of Sponsorship (CoS), which are essential for sponsoring new workers, or fail to request additional allocations in time.

Regularly review your CoS allocation via the SMS and request additional certificates if you anticipate needing more. Requests can take several weeks for approval, so plan ahead to ensure you can meet recruitment timelines.

7. Unannounced Home Office Audits

Businesses may face unannounced audits from the Home Office to check sponsor compliance. Unprepared businesses could fail to meet record-keeping or reporting standards, risking penalties or licence suspension.

Conduct regular internal audits of your HR processes and sponsor licence compliance. Ensure that all records are up-to-date and easily accessible for any potential Home Office audit. Having a dedicated compliance officer or legal adviser on hand can help manage this process effectively.

Section E: Consequences of a Revoked Licence

Non-compliance with the UK Home Office’s stringent rules could result in the revocation of your sponsor licence. The impact of losing your sponsor licence extends beyond the inability to hire international talent—it can also lead to fines, legal action, and long-term damage to your company’s standing with regulatory authorities.

1. Loss of the Right to Sponsor Foreign Workers

One of the most immediate and severe consequences of a lapsed or revoked sponsor licence is the loss of your company’s right to sponsor skilled foreign workers. This means:

a. Inability to Issue New Certificates of Sponsorship (CoS)

You will no longer be able to issue Certificates of Sponsorship (CoS), which are required for foreign workers to apply for work visas. This will halt any ongoing or planned recruitment of international talent.

b. Impact on Existing Sponsored Employees

If your licence is revoked, your existing sponsored workers’ visas may be curtailed by the Home Office. This typically gives them 60 calendar days (or less if their visa expires sooner) to find a new sponsor or leave the UK. Curtailment notices are issued individually and may vary depending on circumstances. This could lead to the loss of valuable staff and disrupt business operations.

2. Financial Penalties

In the case of a downgraded licence rating (from A to B), businesses are often required to implement a compliance action plan, which comes with additional costs. These plans are designed to help businesses restore compliance but can involve fees, time, and effort to execute.

Beyond licence enforcement action, employers that are found to be in breach of the prevention of illegal working regulations can face significant financial penalties. The Home Office may impose fines if you are found to have breached your right to work duties. These fines can be substantial, with penalties of up to £45,000 per breach for a first offence or £60,000 per illegal worker for repeat offences.

3. Legal Action and Criminal Liability

In more serious cases of non-compliance, businesses may face legal consequences, including:

a. Criminal Prosecution: In cases where businesses are found to have knowingly employed workers without the legal right to work, or if they fail to meet serious compliance obligations, criminal prosecution may follow. Directors and managers could face personal liability if found to be complicit in these breaches.

b. Immigration Enforcement Action: The Home Office may carry out immigration enforcement visits and investigations, particularly if non-compliance is suspected. This could result in public scrutiny and reputational damage.

4. Damage to Reputation and Future Opportunities

A lapsed or revoked sponsor licence can have long-term repercussions on your business’s reputation:

a. Loss of Trust with Clients and Partners: Losing your sponsor licence may signal to clients, partners, and other stakeholders that your business is not in compliance with legal regulations. This could erode trust and affect future business opportunities.

b. Difficulty in Reapplying for a Licence: Once your licence has been revoked, reapplying for a new licence can be challenging. The Home Office may be less likely to approve a new application if there is a history of non-compliance or previous revocation. Businesses will have to demonstrate significant changes and improvements in their processes to regain their licence.

5. Operational Disruption

The revocation of a sponsor licence can disrupt not only your recruitment efforts but also your overall business operations.

Without the ability to hire skilled foreign workers, your business may struggle to fill key roles, which could lead to increased recruitment costs or delays in finding qualified talent.

If you rely on skilled foreign workers for essential business functions, losing your sponsor licence could cause delays in ongoing projects or even lead to cancellations if critical roles remain unfilled.

Section F: How to Check an Employer’s Sponsor Licence

Workers may want to check an organisation’s sponsor licence to ensure the company can legally sponsor them.

1. Reasons to Check an Employer’s Sponsor Licence

As a worker, you may need to verify whether your potential or current employer in the UK holds a valid sponsor licence, either in preparation for your visa application or if you are an existing sponsored worker.

Only employers with a valid licence can issue the Certificate of Sponsorship (CoS) needed for workers to apply for a UK visa.

If the employer does not have a valid sponsor licence, your visa application will not be accepted, and you won’t be able to legally work in the UK.

Checking the licence rating is also important, as a B-rating could indicate compliance problems that may lead to your visa application being refused or losing your visa sponsorship if the employer’s licence is revoked.

2. Step-by-Step Guide to Checking an Employer’s Sponsor Licence

The sponsor licence checking process is relatively straightforward. Complications can arise, however, if you are unable to find the employer or if their licence is not the correct type or rating to sponsor you.

Step 1: Access the UK Government’s Official Sponsor Licence Register

The UK Home Office maintains a public register of licensed sponsors, which is regularly updated. This register contains the names of all employers in the UK who hold a valid sponsor licence, allowing them to sponsor foreign workers under different visa routes.

Step 2: Download or View the List

Once you access the page, you can either view it on the website or download the list as a PDF or a CSV file for more comprehensive use, allowing you to filter and search the data.

The list is organised alphabetically by the employer’s name and includes details such as the organisation’s name, their sponsor licence number, and the type of licence they hold (either for workers, temporary workers, or both).

Step 3: Search for Your Employer

To verify if your employer or potential employer has a sponsor licence, use the search or “find” function in your document viewer (usually Ctrl + F on Windows or Cmd + F on Mac) to type in the name of the organisation.

Ensure you check the correct spelling of the company’s name, as it must match the name listed on the sponsor register exactly.

The sponsor may also be listed under its legal name, not its trading name. If in doubt, confirm the exact registered name with the employer.

Step 4: Check the Type of Licence

If you find your employer on the list, confirm that they hold the correct type of licence based on the work you will be doing:

a. Worker Licence: This covers long-term, skilled employment under visa routes like the Skilled Worker Visa or Senior or Specialist Worker Visa (Global Business Mobility).

b. Temporary Worker Licence: This covers short-term employment or specific visa categories like Creative Worker or Charity Worker.

Some employers hold both licences, while others may only have one, depending on the type of work they typically sponsor.

If you are unsure about whether the employer holds the correct type of licence for your intended visa, ask the employer to check and confirm their status.

Step 5: Confirm the Licence Rating

The register also indicates the licence rating:

a. A-Rating

This means the sponsor is fully compliant with the Home Office’s regulations and can sponsor workers without restrictions.

b. B-Rating

A B-rated sponsor licence indicates that the employer has failed to fully comply with their sponsor duties and is currently under review by the UK Home Office. A B-rating also means that the licence is at risk and could be revoked if they don’t meet compliance requirements.

An employer with a B-rating would usually not be able to issue a new CoS to hire a new sponsored worker, but they may continue to employ existing sponsored workers with a valid CoS.

If you have been offered a job by a B-rated sponsor, ask the employer the following questions:

i. Why was the licence downgraded? Understanding the reason for the downgrade will help you assess whether the issue is likely to affect you as a sponsored worker.

ii. What steps are being taken to restore the A-rating? Confirm that the employer is actively working to comply with the Home Office’s action plan. A proactive employer will likely resolve the issues quickly, which can improve your situation as a sponsored worker.

iii. Will the B-rating affect my visa application? Ensure the employer is transparent about whether they can sponsor you while under the B-rating.

iv. Can the organisation still assign a Certificate of Sponsorship? B-rated sponsors can continue to sponsor existing workers whose CoS were issued before the downgrade, but they will generally be subject to Home Office-imposed restrictions, such as suspending the ability to assign new CoS or sponsor new workers until they have restored their A-rating by completing the Home Office’s action plan. Confirm that the employer can still sponsor you under their current rating. Without a valid CoS, your visa application will not be processed by the UK Home Office.

If you are uncertain about the organisation’s licence rating, take professional advice, since any issues with your CoS can result in your visa application being refused.

3. What to Do if the Employer is Not on the Register of Licensed Sponsors

If you cannot find the employer’s name on the sponsor register, your options could include:

a. Asking the Employer Directly

In some cases, the company may have applied for the licence but is not yet on the public register. Inquire whether they have applied and when they expect to receive their licence.

b. Consult an Immigration Advisor 

If you are unsure or concerned about the legitimacy of the employer’s licence, consult a qualified immigration adviser for guidance on your situation.

c. Avoid Applying for a Visa

Do not proceed with a visa application until you have verified that the employer holds a valid sponsor licence. Without a valid licence, the employer cannot issue a Certificate of Sponsorship (CoS), and your visa application will likely be refused.

Section G: Summary

A sponsor licence check is an important process, both for UK businesses that hire foreign workers and for workers to confirm an employer’s sponsorship permission.

Employers need a valid sponsor licence to legally sponsor skilled workers from outside the UK under the points-based immigration system. Regularly checking the status of a sponsor licence ensures that a business remains compliant with Home Office regulations, as non-compliance can result in penalties, suspension, or even revocation of the licence.

Key risks for businesses include missing important licence updates or failing to report changes to sponsored employees’ roles or circumstances. Non-compliance with sponsor duties could lead to the licence being downgraded to a B-rating, limiting the ability to sponsor new workers and requiring a compliance action plan to restore the A-rating. If the licence is revoked, existing sponsored employees could lose their visas and the business would lose the right to hire international staff.

Section H: Need Assistance?

DavidsonMorris are leading sponsor licence lawyers. Our comprehensive, cost-certain sponsor licence services cover all areas of immigration and employment support you need to sponsor workers in full compliance with Home Office regulations, including guidance on sponsor licence checks and management. Contact us for expert support.

Section I: Sponsor Licence Check and Compliance FAQs

What is a sponsor licence?

A sponsor licence is an official permit issued by the UK Home Office that allows businesses to hire and sponsor foreign nationals for work visas under the UK’s points-based immigration system. It is essential for any business that wants to employ skilled workers from outside the UK.

Who needs a sponsor licence?

Any UK-based business or organisation that wishes to hire workers from outside the UK, including from the European Economic Area (EEA) and Switzerland, needs a sponsor licence to legally sponsor these workers for visas.

Why is it important to regularly check my sponsor licence status?

Regularly checking your sponsor licence status helps you maintain compliance with Home Office regulations, avoid penalties, and ensure your business can continue to sponsor foreign workers. It also helps avoid suspension or revocation of your licence, which could impact your ability to hire overseas talent.

How do I check my sponsor licence status?

You can check your sponsor licence status through the UK government’s Sponsorship Management System (SMS). Simply log in using your credentials to view your licence summary, rating and any alerts or notifications.

What happens if my sponsor licence is revoked?

If revoked, your current sponsored employees may lose their visas and have to leave the UK, and you won’t be able to sponsor any new employees until you reapply and are approved.

How often should I check my sponsor licence status?

You should check your sponsor licence status regularly, ideally, every few months or whenever there are significant changes to your business or sponsored employees.

What are the common reasons for a sponsor licence being downgraded or revoked?

Common reasons include failure to maintain accurate records, not reporting changes to your business or sponsored employees (such as job roles or absences), and non-compliance with Home Office requirements during an audit. Inconsistent right to work checks and failing to meet sponsor duties are also frequent causes.

How do I renew my sponsor licence?

Sponsor licences no longer need to be renewed. Unless your licence is withdrawn or revoked, it will remain valid and your organisation remains subject to the licence compliance requirements.

What are my record-keeping obligations as a sponsor?

As a sponsor, you are required to keep detailed records for all sponsored workers. This includes copies of their passports, visas, right to work documentation, employment contracts, attendance records, and reports on salary and job role changes. These records must be up-to-date and available for Home Office inspections.

Can I apply for a sponsor licence if my business is new?

Yes, new businesses can apply for a sponsor licence, but they must demonstrate that they are legitimate and have the necessary HR systems to meet sponsor duties. You’ll need to provide appropriate documentation, such as business registration, proof of premises, and financial records.

How long does it take to get a sponsor licence?

It typically takes up to 8 weeks for the Home Office to process a sponsor licence application. You can apply for priority processing for an additional fee to speed up the process.

What should I do if my sponsor licence is downgraded to a B-rating?

If your licence is downgraded to a B-rating, the Home Office will issue a compliance action plan outlining the steps you need to take to restore your A-rating. Follow the plan carefully and implement the required improvements to avoid further penalties or licence revocation.

Section J: Glossary

Section K: Additional Resources