ENTITY Sponsor Licence IJ

Section I. Sponsor Licence Ratings

Sponsor licences are subject to a Home Office rating system. Organisations granted a sponsor licence will generally receive an A-rating, which allows them to carry out sponsorship activity under the routes covered by their licence.

Where an existing sponsor fails to meet certain sponsor requirements, the Home Office can in specified circumstances downgrade the licence from an A-rating to a B-rating.

A B-rating indicates that the sponsor must make specified improvements to its compliance arrangements under a Home Office action plan.

1. What is an A-rated sponsor licence?

An A-rating is the standard rating for a sponsor that has been granted a licence and is permitted to undertake sponsorship activity in accordance with the scope of that licence.

An A-rated sponsor can, subject to the requirements of the relevant route:

• sponsor eligible workers;
• assign Certificates of Sponsorship;
• use the Sponsor Management System;
• manage existing sponsored workers; and
• undertake other permitted sponsorship activity.

An A-rating does not mean that the organisation is exempt from future Home Office scrutiny.

The sponsor remains subject to its ongoing duties and UKVI can conduct compliance activity while the licence remains in force.

2. What is a B-rated sponsor licence?

A B-rating is a compliance rating that can be imposed on an existing sponsor in circumstances specified by the sponsor guidance.

A sponsor downgraded to a B-rating is required to follow a Home Office action plan designed to address identified compliance weaknesses.

The sponsor remains licensed, but restrictions apply while it is B-rated.

A B-rating should therefore be distinguished from suspension or revocation.

A-rating

Licence operating normally.

B-rating

Licence remains in force but is subject to an action plan and restrictions.

Suspension

Sponsorship activity is significantly restricted while Home Office concerns are considered.

Revocation

The sponsor licence is terminated.

3. Why can a sponsor licence be downgraded?

Downgrading can arise where the Home Office identifies compliance failures and the applicable sponsor guidance allows the organisation to address them through an action plan.

Potential concerns can relate to areas such as:

• record keeping;
• worker monitoring;
• reporting;
• sponsor management systems;
• key personnel; and
• other sponsor duties.

Not every breach will result in downgrading.

Some breaches can lead to more serious enforcement action, including suspension or revocation, depending on the circumstances and the applicable sponsor guidance.

4. What is a sponsor action plan?

A sponsor action plan specifies improvements the organisation must make to address the compliance weaknesses identified by the Home Office.

The sponsor is required to comply with the action plan within the period specified by UKVI.

The plan can require improvements to areas such as:

• HR systems;
• record keeping;
• worker monitoring;
• reporting procedures;
• sponsor management; and
• other identified compliance controls.

The organisation should treat each requirement in the action plan as a formal regulatory obligation.

5. Is there a fee for an action plan?

Yes. A sponsor that is downgraded and required to follow an action plan must pay the applicable Home Office fee.

Home Office fees are subject to change, so the current amount should be checked when the action plan is imposed.

Failure to pay the required fee can have consequences for the sponsor licence.

6. What restrictions apply to a B-rated sponsor?

A B-rated sponsor is subject to restrictions while it works through its action plan.

In particular, the organisation’s ability to sponsor new workers can be restricted.

The sponsor should check the precise restrictions applying under the current sponsor guidance and its Home Office action plan before undertaking new sponsorship activity.

The organisation remains responsible for its existing sponsored workers and must continue complying with its sponsor duties.

7. What happens to existing sponsored workers?

Downgrading to a B-rating does not automatically terminate the immigration permission of workers already sponsored by the organisation.

The sponsor must continue to meet its duties in relation to those workers.

This includes, where applicable:

• record keeping;
• monitoring;
• reporting;
• maintaining appropriate employment arrangements; and
• complying with wider sponsorship requirements.

The organisation should therefore continue operating its sponsorship compliance systems while completing the action plan.

8. How does a sponsor regain an A-rating?

The organisation must satisfactorily complete the requirements imposed by the Home Office.

UKVI can assess whether the required improvements have been made.

The sponsor should be able to demonstrate not merely that new policies have been written, but that the required compliance improvements have actually been implemented.

For example:

Home Office identifies weak absence monitoring

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Sponsor introduces revised process

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Managers are trained

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Process is implemented

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Records demonstrate that it operates

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UKVI assesses compliance

The objective is operational improvement rather than documentation alone.

9. What happens if the sponsor does not complete the action plan?

Failure to make the required improvements can result in further Home Office action.

Depending on the applicable sponsor guidance and circumstances, this can ultimately place the licence at risk of revocation.

The sponsor should therefore monitor completion of every action-plan requirement and retain evidence demonstrating the changes made.

10. Can a sponsor remain B-rated indefinitely?

No. A B-rating is intended to provide a limited opportunity to remedy specified compliance failures.

The sponsor cannot simply choose to remain permanently B-rated as an alternative to maintaining full sponsor compliance.

The action-plan process is designed to result in the organisation either making the required improvements or facing further consequences under the sponsor regime.

11. Downgrading versus suspension

Downgrading and suspension serve different purposes.

A B-rating generally provides a structured opportunity for the sponsor to address specified compliance weaknesses through an action plan.

A suspension is a more serious enforcement measure under which the Home Office restricts sponsorship activity while it considers concerns about the organisation’s compliance or suitability.

The Home Office’s available response depends on the particular breach and the provisions of the sponsor guidance.

12. Preventing downgrading

Sponsors can reduce the risk of downgrading by maintaining effective compliance systems and periodically testing them.

A practical review can examine:

Records

Are required documents retained?

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Monitoring

Can the organisation track sponsored workers appropriately?

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Reporting

Are relevant changes identified and reported?

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SMS

Is the licence being managed correctly?

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Key personnel

Are the appropriate people in place?

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Employment

Do sponsored roles, salaries and working arrangements remain compliant?

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Audit

Can the organisation demonstrate that its systems work in practice?

Weaknesses should be addressed before they develop into Home Office enforcement issues.

13. Responding to a downgrade

Where the Home Office downgrades the licence, the organisation should identify both the individual failures and their underlying causes.

For example:

Finding

Late sponsor reports.

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Immediate issue

Relevant changes were not reported within the required timeframe.

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Root cause

Line managers did not notify the sponsor team.

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Remediation

Introduce a mandatory escalation procedure and train managers.

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Evidence

Maintain records showing the revised process is operating.

This approach helps the organisation address the compliance system rather than merely correcting individual files.

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Section J. Suspension & Revocation

The Home Office can suspend or revoke a sponsor licence where it identifies serious concerns about an organisation’s compliance with its sponsor duties or its suitability to remain licensed.

Suspension and revocation are distinct enforcement measures.

Suspension restricts the organisation’s sponsorship activity while the Home Office considers compliance concerns.

Revocation brings the sponsor licence to an end.

Both can have significant consequences for the organisation, its recruitment activity and its sponsored workforce.

1. What is sponsor licence suspension?

The Home Office can suspend a sponsor licence where it has grounds for concern about the sponsor’s compliance.

During suspension, the licence remains in existence, but the organisation’s ability to undertake new sponsorship activity is restricted.

The sponsor should continue to comply with its duties towards existing sponsored workers while the licence is suspended.

Suspension can arise following:

• a Home Office compliance visit;
• other compliance enquiries;
• information identified through sponsorship activity;
• concerns relating to sponsored workers;
• discrepancies identified by UKVI; or
• other information available to the Home Office.

A compliance visit is therefore not required in every case before a licence can be suspended.

2. What happens when a sponsor licence is suspended?

The Home Office will notify the sponsor of the suspension and the compliance concerns it has identified.

The organisation should examine the notice carefully and establish:

What allegations have been made?

Which sponsor requirements are engaged?

Which workers or records are involved?

What evidence is available?

What response deadline applies?

The sponsor should then investigate each allegation and prepare its response within the applicable timeframe.

3. Responding to a sponsor licence suspension

A suspension response should be based on the specific allegations made by the Home Office.

A practical structure is:

Home Office allegation

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Applicable sponsor requirement

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Relevant facts

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Supporting evidence

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Accepted / Partially accepted / Disputed

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Remedial action where appropriate

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Sponsor representations

The organisation should avoid making unnecessary admissions before establishing the factual position.

Equally, where a compliance failure clearly occurred, the sponsor should consider how it can demonstrate that the issue has been understood and appropriately addressed.

4. What happens to sponsored workers during suspension?

Existing sponsored workers do not automatically lose their immigration permission merely because the sponsor licence has been suspended.

The sponsor remains responsible for complying with its duties towards those workers.

However, suspension can affect the organisation’s ability to sponsor new workers and can affect immigration applications connected with the sponsor.

The organisation should therefore identify any:

• planned CoS assignments;
• pending immigration applications;
• proposed sponsored recruits; and
• workers with approaching immigration deadlines.

5. Possible outcomes after suspension

After considering the compliance concerns and any representations made by the sponsor, the Home Office can determine what further action is appropriate under the sponsor guidance.

Depending on the circumstances, this can include:

Reinstatement

The suspension is lifted and the licence continues.

Downgrading

Where permitted, the sponsor can be downgraded and required to follow an action plan.

Revocation

The sponsor licence is terminated.

The applicable outcome depends on the findings and the relevant enforcement provisions.

6. What is sponsor licence revocation?

Revocation terminates the organisation’s sponsor licence.

Once the licence has been revoked, the organisation can no longer use that licence to sponsor workers.

Revocation is therefore fundamentally different from suspension.

Suspension = licence remains in existence while enforcement issues are considered.

Revocation = licence ends.

7. Why can a sponsor licence be revoked?

The sponsor guidance specifies circumstances in which the Home Office can or must revoke a licence.

Potential grounds can relate to matters such as:

• serious breaches of sponsor duties;
• improper use of Certificates of Sponsorship;
• sponsorship of workers in roles that do not meet applicable requirements;
• non-genuine vacancies;
• salary non-compliance;
• illegal working;
• inaccurate or misleading information;
• failures to maintain required records;
• failures to report relevant changes;
• failure to cooperate with UKVI;
• failure to comply with an action plan; and
• other conduct affecting sponsor suitability.

The precise consequences depend on the particular breach and the applicable sponsor guidance.

8. Mandatory and discretionary revocation

An important distinction exists between circumstances where the sponsor guidance requires revocation and circumstances where the Home Office has discretion.

Where mandatory revocation applies, establishing the relevant facts can require the Home Office to revoke the licence.

Where the Home Office has discretion, the decision involves an assessment under the applicable sponsor guidance.

The first question in an enforcement case should therefore be:

What specific revocation provision is the Home Office relying on?

This determines the significance of factual challenges, remediation and other representations.

9. What happens to sponsored workers after revocation?

Revocation of the sponsor licence can have serious consequences for workers sponsored by the organisation.

The Home Office can take action affecting their immigration permission because the sponsorship on which that permission was based has ceased.

However, licence revocation should not be described as automatically cancelling every sponsored worker’s immigration permission at the exact moment the sponsor’s licence is revoked.

The individual worker’s position depends on their circumstances and any subsequent Home Office action affecting their permission.

Employers should therefore assess affected workers individually.

10. Do workers automatically have 60 days after revocation?

No universal rule guarantees every sponsored worker exactly 60 days following sponsor licence revocation.

Where the Home Office takes action to cancel a worker’s immigration permission following the loss of sponsorship, the resulting period depends on the applicable Immigration Rules, the worker’s existing permission and their individual circumstances.

Employers should therefore avoid telling sponsored workers automatically that they have “60 days to find another sponsor”.

The individual’s Home Office decision and immigration position need to be considered.

11. Right to work following revocation

Sponsor licence status and an individual employee’s right to work are related but distinct issues.

The employer should establish:

What immigration permission does the worker currently hold?

Has the Home Office taken action against that permission?

Does the worker currently retain a right to work?

What restrictions apply?

Employment decisions should be based on the worker’s actual immigration and right to work position rather than on the licence revocation alone.

12. Can a worker move to another sponsor?

A sponsored worker affected by revocation may be able to obtain sponsorship from another appropriately licensed employer, provided the worker and new role satisfy the requirements of the relevant immigration route.

The new employer would ordinarily need to:

Hold the appropriate sponsor licence

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Offer an eligible role

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Assign a new Certificate of Sponsorship

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Worker makes the required immigration application

The former sponsor’s CoS cannot simply be transferred to the new employer.

13. Is there a right of appeal?

There is no general statutory right of appeal against Home Office decisions to suspend or revoke a sponsor licence.

This makes the opportunity to respond to Home Office compliance concerns particularly important.

Where revocation has already occurred, the organisation should consider whether any applicable Home Office process is available and whether the decision may be susceptible to legal challenge.

14. Judicial review

An unlawful sponsor licence decision can potentially be challenged by judicial review.

Judicial review is concerned with the lawfulness of the Home Office’s decision-making rather than providing a general merits appeal.

Depending on the circumstances, relevant public law issues can include:

• procedural unfairness;
• material errors of fact;
• incorrect application of the sponsor guidance;
• failure to consider relevant evidence;
• failure to follow applicable policy;
• irrationality; or
• other public law errors.

Judicial review is subject to strict procedural requirements and time limits. Organisations considering challenge should act promptly.

15. Business and employment consequences

Suspension or revocation can extend beyond immigration administration.

The organisation may need to assess:

• existing sponsored workers;
• pending immigration applications;
• planned recruitment;
• right to work;
• employment contracts;
• potential dismissals or other employment action;
• critical workforce dependencies; and
• business continuity.

Immigration and employment law consequences should be considered together.

16. Immediate response to Home Office enforcement

Where a sponsor receives a suspension or revocation decision, a practical response is:

Preserve evidence

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Identify every allegation and finding

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Identify the applicable sponsor guidance

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Establish the facts

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Assess whether findings are correct

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Determine whether the relevant consequence is mandatory or discretionary

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Take appropriate remedial action

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Assess representations or legal challenge

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Identify affected workers and pending applications

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Manage employment and operational consequences

This keeps the regulatory response separate from, but coordinated with, the organisation’s workforce response.

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