You need a sponsor licence to employ most types of workers from outside the UK, including Skilled Visa workers.
To secure a UK visa sponsorship licence, you will need to make an application to the Home Office and pay the relevant fees.
The Home Office will only grant a sponsor licence to an organisation that can show the roles they are recruiting for, and the workers they intend to sponsor, meet the necessary requirements. The organisation must also have HR systems in place that comply with onerous sponsorship compliance duties.
Sponsor licence guidance
The rules on sponsoring workers are contained within the Home Office’s 200-page Sponsor Guidance document, the ‘Workers and Temporary Workers: Guidance for Sponsors’ and multiple supporting appendices.
There is a considerable amount of information for employers to work through and piece together to understand what a sponsor licence allows, how to make an application and what sponsors are required by law to do to comply with the sponsor licence duties.
In this guide, we will explain the requirements employers have to meet when making a sponsor licence application and the duties they have to comply with once they have secured the licence.
We will share insight into what the Home Office’s UK Visas & Immigration department (UKVI) is looking for in a successful sponsor licence application. As well as dealing with preparation for the licence application, we also cover the practicalities of submitting a sponsor licence application and what to do if the licence application is approved, rejected or refused.
The sponsor licence application form itself is a relatively small part of the process. We will also examine in detail other key aspects of the process which employers may not be familiar with, but which play a critical role in securing a sponsorship licence.
Sponsoring workers from 2021
The end of EU free movement and changes to the UK immigration rules mean that from 1st January 2021, all EU and non-EU nationals coming to the UK to work must now be sponsored by a licensed employer with a sponsorship licence.
The UK’s new points-based system features an immigration route for workers who have an offer a job in a qualifying role from an approved sponsor. Replacing the Tier 2 (General) visa, the new skilled worker route applies to both:
- EU nationals who arrive in the UK after 11 pm on 31st December 2020; and
- Non-EU nationals who apply for a visa on or after 1st December 2020.
EU nationals already resident in the UK on 31st December 2020 will not need to be sponsored. They should instead register under the EU Settlement Scheme by 30 June 2021 to maintain their lawful status.
Irish nationals are also exempt from the provisions and do not need to be sponsored to work in the UK.
While the new rules will make it more challenging for UK employers to hire EU nationals after 2020, other rule changes, such as lower skill and salary thresholds, have been designed to open sponsorship up to a greater number of workers and a broader range of jobs than under the previous Tier 2 visa route.
What is UK visa sponsorship?
Under the UK’s points-based immigration system, the main routes for non-UK residents working in the UK are:
- The skilled worker visa (which has replaced the Tier 2 visa) and
- The intra-company transfer visa
- Tier 5 temporary worker visas
Each of these visa types requires sponsorship by a licensed employer.
To employ workers under either visa, the employer must apply to UK Visas & Immigration (UKVI) (the Home Office division responsible for UK immigration) for a sponsorship licence.
The sponsorship licence grants permission to an organisation to sponsor workers in its business. Only organisations, not individuals, can be licensed ‘sponsors’.
The Home Office relies on the sponsorship regime to prevent illegal working and misuse of the immigration system.
By agreeing to become a sponsor licence holder, you are assuming certain compliance responsibilities and in doing so, exposing your organisation to Home Office scrutiny.
The sponsorship regime is used to ensure that:
- The sponsor is meeting all of the compliance duties expected when sponsoring migrant workers.
- Sponsored workers meet the points requirements and are suitably qualified and skilled with the required language skills.
- The roles being sponsored meet the requirements for skill level, salary and genuineness.
Failure to meet the duties can result in enforcement action, from substantial fines to revocation of the licence, which would result in your visa workers losing their job and having to leave the country.
Which type of sponsor licence?
The majority of migrant workers are sponsored under the skilled worker (formerly Tier 2 General) route.
If your organisation is planning to transfer workers to a UK branch, you will need to apply for an intra-company transfer (ICT) licence.
In some cases, the employer may opt to apply for both to serve its recruitment needs. Employers can apply for the ICT and skilled worker licences at the same time, or make separate applications when the timing suits.
In addition, specific Tier 5 licences cater for temporary roles in the sports, charities and religious fields.
This article will focus on the skilled worker licence. While the majority of the guidance will also apply to other types of licence, there are specific requirements under each licence.
Sponsor licence requirements
The Home Office uses the application process to assess the employer’s ability to meet the eligibility and suitability requirements. A specific sponsor applications team at the Home Office will consider applications for sponsorship.
There are no restrictions on the size or type of organisation that can hold a sponsorship licence, provided they meet the eligibility and suitability criteria for the specific category or tier that is applying for.
Failure to meet either the eligibility and suitability criteria will result in a refused application.
1. The organisation is genuine and operating and/or trading lawfully in the UK.
The organisation must be a bona fide operation. Limited companies, for example, must be registered with Companies House.
There are no stipulations in the guidance that the organisation should have been trading for any particular period of time, but there should be someone resident in the UK working at the organisation who is available to liaise with the Home Office on any queries relating to the application.
2. The organisation is based in the UK.
Without operating or trading presence in the UK, the application will be refused. If the organisation does not occupy premises in the UK but operates a virtual business model, it may still apply for a sponsor licence. However, it will need to clearly evidence that it can meet its sponsor duties and obligations and that it is operating or trading lawfully in the UK.
UKVI will look to ensure a potential sponsor:
- Is offering a genuine vacancy which meets the skilled worker criteria. The Home Office may request additional information to verify the specific nature of the role and its duties and to confirm that the role actually exists. Exaggerated job descriptions to meet the skill level requirements are likely to raise suspicions that the vacancy is not genuine.
- Has the HR and recruitment systems in place to render it capable of complying with the sponsor duties and responsibilities, and evidencing that compliance. The Home Office reserves the right to investigate sponsor compliance by conducting a site inspection before (as well as after) the licence is granted.
- Is “honest, dependable and reliable”. This means the organisation and its owners, directors and appointed key personnel do not have any unspent criminal convictions.
- Does not represent a threat to immigration control with no evidence of any previous non-compliance by the organisation.
- If relevant, has the appropriate planning permission or Local Planning Authority consent for the type of business operated at the trading address.
The genuineness test should be approached as a business case. The Home Office will want to see the reasons why you require a sponsor licence and a foreign national for the vacancy.
If you can present convincing business reasons as to why you need a licence and a particular role, the application will meet the genuineness test.
The genuineness test can be applied at any time during the life of your sponsor licence; when your organisation is making an application for a sponsor licence, or during a licence compliance visit, or when you request a Certificate of Sponsorship. The same criteria apply in all instances.
The genuineness test looks at the role(s) you are recruiting foreign nationals for and how these roles fit within your organisation as a whole.
You will need to demonstrate that in all cases, the role to be filled by the migrant worker is a ‘genuine vacancy’. This means you have to prove:
- That the role meets the requirements of the relevant category, i.e that it fits with one of the Standard Occupation Codes listed by the government.
- That the role ‘fits’ with your organisation, i.e that it seems reasonable that an organisation of your type, operating in your sector, should need that ‘kind’ of role. For example, if you are a small restaurant seeking to appoint an HR Manager, the Home Office might deem that an HR Manager does not fit the needs of a small business with only a dozen members of staff.
- If you have already identified an individual who you wish to appoint to the role, that their previous employment or training ‘fits’ with this new role, i.e that you won’t be paying an individual an extra £10k a year to deliver the same role simply to meet the salary requirements of the category.
If the Home Office has any concerns that a vacancy is not genuine, they may request the employer to provide additional information or evidence. This means employers will also need to take care to ensure that job descriptions accurately reflect the role. Failure to provide this evidence within the requested time could result in the application being refused.
The visa applicant may also be subject to additional scrutiny where it is suspected that a vacancy is not genuine. The Home Office may ask the applicant to provide additional evidence or information (usually within 28 days), or the applicant may also be asked to attend an interview, where the caseworker will assess the applicant’s knowledge of the role, relevant experience relative to the role, knowledge of the sponsor in the UK, explanation of how they were recruited and any other relevant information.
The Home Office policy guidance states that while this additional level of scrutiny will not be required in most cases, special attention should be paid to ‘high-risk’ sectors. High-risk sectors are not defined, but we would suggest that any application involving carers or the hospitality industry should expect greater scrutiny. The applicant’s previous immigration history will also be taken into account when considering the ‘genuineness’ of the application.
If you do not have a specific role in mind but are applying for the licence in advance of future need, the Home Office will still have many of the same questions about the type of role you plan to recruit for in the future, and they will make the same assessment as to whether this role fits with the organisation as a whole.
Sponsor licence duties
When applying for a sponsorship licence, the organisation is committing to adhere to certain administrative duties designed to ensure the prevention of illegal working.
Fundamentally, compliance with the duties ensures comprehensive and up to date records are maintained by sponsors that must be made available to the Home Office for inspection at any time.
The Home Office uses the licence application process to evaluate the employer’s ability to meet these sponsor duties.
The duties, as prescribed in the Home Office’s Sponsor Guidance, are as follows:
- Monitoring & reporting
- Absence monitoring
- Notifying the Home Office of changes in circumstances
Sponsors must keep records relating to their sponsored workers and their right to work in the UK documentation, NI numbers (where applicable) as well as the history of and up-to-date contact details.
The employer must retain copies of documents as specified in Appendix D, such as:
- Immigration status documents, including their period of leave to remain/stay in the UK)
- Biometric residence permit
The sponsor must also keep records of sponsored workers’ contact details, both retaining past contact details and having a system in place to identify and update any changes in contact information.
Employment contracts should also be retained for all sponsored workers. Employers should note that the Home Office may review contract terms to ensure they are consistent with the details on the Certificate of Sponsorship assigned in relation to salary and job role.
Effective right to work checks ensure the employer does not breach the prevention of illegal working regime, by conducting document checks in the prescribed manner, and ensuring those workers with time-limited permission are subject to follow-up checks to verify continued right to work.
Failure to meet the right to work requirements can result in a financial penalty and enforcement action.
Monitoring & reporting
The employer must have in place systems and processes to track and monitor sponsored employees, reporting within ten working days if the sponsored individual:
- Fails to start work when expected
- Has ten days of consecutive unauthorised absence
- Has their contract terminated earlier than expected e.g. resignation
- Moves into another immigration category, for example, from the skilled worker visa to indefinite leave to remain (regardless that the Home Office should have a record of this fact)
The sponsor also has to notify the Home Office of any reasonable concerns or evidence that a sponsored worker is in breach of the conditions of their stay in the UK.
The sponsor has to ensure all sponsored employee absences are authorised and recorded, including sickness, annual leave, study leave and overseas travel. The employer should have in place and follow, an effective sickness absence procedure.
Notifying the Home Office of certain changes in circumstances
Key personnel listed on the sponsor licence must still be employed or engaged by the sponsor, and if there have been any changes, these must be reported to UKVI via the SMS.
If the organisation has moved premises, the change of company address must be notified to the Home Office. Should the Home Office wish to conduct an unannounced site inspection, they will need the correct information to attend the correct premises.
While details of UK branches are not stored in the SMS, sponsors are advised to keep separate records of any changes to the organisation’s UK network, such as opening or closing branches, for clarity of which addresses are on the licence.
The same principle applies to overseas branches, subsidiary companies and linked entities. It is best practice to update UKVI each time a linked entity overseas is established or closed.
Immigration compliance audit
Where the Home Office determines an organisation’s HR systems are not adequate to comply with the sponsor duties, they may refuse the licence.
In preparation for the application, it is advisable to conduct an internal audit of existing HR systems to identify potential issues and breaches of the requirements, and for these to be addressed prior to applying to the Home Office. As well as checking systems, it will also be important to check if practices and procedures at any physical addresses where the organisation’s sponsored employees would carry out their employment duties, to ensure compliance.
Which roles can be sponsored under the Tier 2 skilled worker visa?
Not all roles can be sponsored under the skilled worker licence.
There are skill and salary levels that must be met, and certain sectors and niches are excluded.
Any proposed sponsored role must meet the criteria for sponsorship and attain the requisite 70 points under the visa route. This includes skill, salary and language requirements, as follows:
|Job offer by approved sponsor||Mandatory||20|
|Job at appropriate skill level||Mandatory||20|
|Speaks English at required level||Mandatory||10|
|Salary of £20,480 to £23,039 or at least 80% of the going rate for the profession (whichever is higher)||Tradeable||0|
|Salary of £23,040 to £25,599 or at least 90% of the going rate for the profession (whichever is higher)||Tradeable||10|
|Salary of £25,600 or above or at least the going rate for the profession (whichever is higher)||Tradeable||20|
|Job in a shortage occupation as designated by the Migration Advisory Committee||Tradeable||20|
|Education qualification: PhD in a subject relevant to the job||Tradeable||10|
|Education qualification: PhD in a STEM subject relevant to the job||Tradeable||20|
The new points requirement for the skilled worker visa allows applicants to trade certain points. For example, it may be possible to trade a salary level lower than the applicable threshold, provided additional points are attained under another attribute.
Suitable skill level for sponsored workers
To qualify for the skilled worker (and ICT) visa, the role will, in most cases, need to be at Regulated Qualifications Framework (RQF) level 3 (A level equivalent) or above.
The skill level is notably lower under the new system; a move intended to ease the transition from the end of EU free movement by allowing a greater number of roles to qualify for the route.
How to match a role to the correct SOC code
Jobs that are eligible under the skilled worker route are listed in the new Appendix Skilled worker, and identified by a Standard Occupational Classification (SOC) code and ‘related job titles’.
For Tier 2 visa applications being made prior to 2021, the list of SOC codes is found under Appendix J.
As well as the SOC code, the Appendix provides a brief job description and example job tasks to help employers match roles to the correct SOC code.
Likewise, job descriptions which copy the example job tasks verbatim can also raise suspicions as to the genuineness of the role and its alignment to the selected SOC code.
If you are unsure as to which SOC code is correct, it can be helpful to use the ONS coding tool and searching by job title. You can then cross-reference the code provided with the Home Office Appendix to confirm the SOC code is correct.
You will then be able to check the RQF level assigned to the role, and whether this meets the required minimum level for the route.
The requirements can be said to be met where the visa applicant is not educated to the required RQF level but can evidence relevant job experience. However, where a visa applicant has neither the requisite qualifications nor relevant work experience, the Home Office is likely to refuse the sponsorship licence application and/or the worker’s visa application for failing the genuine vacancy test.
Certain roles are exempt from the skill level requirement, including those that feature on the Shortage Occupation List and specific creative industry roles.
Minimum salary thresholds for skilled workers
One of the key sponsorship requirements is that the salary you pay sponsored workers must be above a certain minimum threshold.
Unfortunately for employers, this is not a straightforward area of the licence, since different minimum salary levels apply to different types of workers.
In effect, the applicable threshold will depend on the job role and whether the worker is classed as a new entrant or an experienced worker.
The employer has to pay whichever is the higher of the ‘going rate‘ or the relevant general minimum salary threshold.
A going rate applies to every job type, and this varies by role. For example, the going rate for lab technicians is £18,200 while for mechanical engineers it is £33,400.
As well as considering the relevant going rate, there is also a ‘general minimum threshold’ for new entrants, i.e. workers under the age of 26 at the time of their visa application, Student Visa to Skilled Worker switchers and university ‘milk round’ recruits, and the general minimum threshold for all others, classed as ‘experienced workers’.
You take the relevant threshold salary and compare it to the general minimum salary:
- In 2020: new entrants is £20,800 or £30,000 for experienced workers under the rules in 2020.
- From 2021: the general thresholds will decrease to £17,200 for new entrants and £25,600 for experienced workers.
The minimum salary you have to pay a sponsored worker is the higher of the two figures.
In some circumstances, the applicable minimum salary to attain the 20 points is a lower threshold of £20,480 or above. This would apply if the individual has a STEM PhD relevant to the role or if the job features on the Shortage Occupation List.
New entrant transition into experienced worker
The guidance states that a sponsored worker can only be considered a ‘new entrant’ for a maximum of three years, regardless of their circumstances.
Sponsors should plan for any future increase in the applicable minimum salary should the worker ‘transition’ during the course of their employment.
Pro-rata hours when calculating minimum salary
The minimum thresholds are set on the basis of a 39-hour week. If the individual’s working hours will be greater than this, the minimum salary will be pro-rata’d on the basis of 39 hour week, and this figure must meet the relevant salary threshold.
Where the individual’s pro-rata salary does not meet the threshold, the application requirement will be deemed not to have been met.
Sponsor licence management & compliance
Appointing key personnel
Another important consideration when preparing your application will be who to appoint as your ‘key personnel’.
Sponsor licence holders are required to nominate individuals who will assume specific responsibilities to manage the licence in compliance with Home Office guidance. These are referred to as key personnel. The roles are:
The Authorising Officer (AO) should be an individual in a senior position in the organisation with responsibility for recruitment and/or HR. They should preferably have oversight of HR processes, systems and people involved in the management and operation of the licence.
Only one AO can be appointed at any one time and it is essential to always have an AO in place. If the AO leaves the organisation, goes on overseas assignment, or takes a leave of absence such as maternity or sabbatical leave, someone else will need to be appointed to the role, even where on a temporary basis, to ensure continuity of cover.
This is the person the Home Office will contact in relation to the organisation’s application and the licence on an ongoing basis. The key contact’s details are to be provided when the licence application is made.
Only one key contact can be appointed at any one time. It is possible to appoint a legal representative as the key contact, and in many cases, this may be a practical solution to enable the legal representative to have direct contact with the Home Office about the application.
Level 1 user
Level 1 users will use the Sponsor Management System (SMS) to administer the licence on a day to day basis. Multiple level 1 users can be appointed at any one time, although it is good practice not to appoint too many to ensure accountability. During the application stage, the level 1 user must be an employee, but once granted, it is possible to appoint additional level 1 users, which can include a legal representative.
Level 2 user
Similar to level 1 users, level 2 users are appointed to carry out administrative tasks on the licence, albeit with fewer permissions than level 2 users.
Who to appoint as key personnel?
The key personnel must be nominated within the licence application form.
To allow for smaller employers, it is possible for the same person to hold multiple roles, while larger companies may opt to appoint different people. In most cases, the key contact, for example, is likely to also act as a level 1 user.
The sponsor must always have a minimum of one employee who is a “settled worker” i.e. a worker who is not subject to immigration control and therefore does not have restriction on their stay in the UK).
The employer has to ensure those appointed as key personnel meet the suitability requirements, as prescribed under the sponsor guidance. Each of the key personnel must:
- Be permanently based in the UK throughout the duration of their role.
- Be a paid staff member or engaged by the UK organisation as an officeholder, with some exemptions which, for example, allow legal representatives to be appointed to certain key personnel roles.
- Not have an unspent criminal conviction for a relevant immigration offence.
SMS users cannot sponsor close relatives such as their spouse, partner, brother, sister, father, mother, etc.
Sponsored employers cannot act as Level 1 users with the ability to assign Certificates of Sponsorship to sponsored employees.
Each individual key personnel will be subject to criminal background checks to verify if they have been associated with immigration offending or with sponsor licence enforcement.
Certificates of Sponsorship
What are Certificates of Sponsorship?
The Certificate of Sponsorship (CoS) is a reference number issued by a sponsoring employer via the SMS to their prospective sponsored worker. The CoS is used to verify to the Home Office that the requirements under the visa route have all been met.
Sponsored visa applicants need the Certificate of Sponsorship to make their visa application.
Prior to 2021, two types of CoS were used: restricted and unrestricted. From 1st December 2020, this system changes to defined and undefined Certificates of Sponsorship:
Defined Certificate of Sponsorship
If the prospective employee is outside the UK and will be applying for entry clearance, they will need to be assigned a defined CoS. The sponsor will need to apply for the defined CoS via the SMS by providing details of the specific job and salary.
Undefined Certificate of Sponsorship
If the individual is applying for a skilled worker visa to remain in the UK, the sponsor will assign them an undefined CoS out of their annual allocation. If the organisation has used their full year’s allocation, they can apply for additional undefined CoS through the SMS. The Home Office is currently advising there will be a one-day turnaround time for requests unless there are additional queries.
Assigning Certificates of Sponsorship
Sponsors will need to understand the difference between the two types and ensure they assign the correct one relevant to the worker.
Failure to assign the correct type of CoS is in breach of the guidelines and can result in penalties against you. For example, sponsors are not permitted to assign an undefined CoS where a defined CoS is required, or a defined CoS to a worker for any job other than the one detailed in the CoS application.
Once assigned a CoS, the individual must use this reference number to make their Home Office visa application.
After three months, the visa application may be rejected if it is made more than three months after the CoS allocation date or refused if the application is made more than three months prior to the employment start date as recorded on the CoS.
Applying for Certificates of Sponsorship
Within its sponsor licence application, the UK organisation will need to state how many undefined CoS it will require until 5th April (the end of the CoS allocation year).
This means that if the licence is granted, the CoS will also be issued to you at the same time, enabling you to assign the CoS straight away to the individual in order for them to make their Home Office visa application.
It is helpful for employers to consider their recruitment needs for the coming 12 months and to request an annual allocation of CoS that will see them through the year, although additional CoS can be requested through the SMS as and when required.
Recruiting sponsored roles
Should you recruit first or apply for the licence? A sponsorship licence will only be granted where the Home Office is satisfied that there is an offer of genuine employment that meets the skilled worker visa requirements. This will be more easily established if there is an identifiable candidate and that it can be shown that they, and the role they are being hired to do, meet the criteria.
Note that in a significant change to the rules, the Resident Labour Market Test has been abolished for the skilled worker route, meaning sponsors will no longer have to evidence they have advertised the role within the UK prior to recruiting from overseas.
Applying for a sponsor licence
Completing the sponsorship licence application form
The licence application form is online, accessible via the SMS.
While relatively straightforward, it is an old system and applications are advised to save regularly to avoid losing any of their information.
The form will require the following:
- Specify which type of licence you will be applying for
- Contact information
- Nominate the key personnel on the licence
- List which supporting documents will be submitted
While the form can be completed with the guidance of a legal representative, the rules are clear that a relevant person from the organisation itself must ultimately ‘press the button’ and submit the application to the Home Office.
At this stage, the licence application fee must be paid (see below for details of the costs).
Once the fee has been paid, a submission sheet will be generated.
Prior to the 2020 spring lockdown, this sheet had to be printed off, signed by the AO and submitted with the supporting documents bundle.
Revised rules in light of the COVID pandemic now allow the AO to sign the sheet electronically and submit as a pdf by email along with the supporting document bundle.
Documents required for a sponsor licence application
It is incredibly common for employers to fall foul of the supporting documentation requirements.
Appendix A details the documents and mandatory information to be submitted in support of a sponsorship licence application. A minimum of four mandatory documents must be submitted to demonstrate that the organisation meets the eligibility requirements, i.e. it is genuine and operating lawfully in the UK.
The guidelines are, however, confusing and it can be difficult for employers to understand what relates to their specific application.
Appendix A comprises a number of tables which the employer must work through to determine which documents must accompany their application.
Depending on the type of organisation and how long it has been operating in the UK, the documents could include (but are not limited to):
- Latest audited annual accounts
- Employer’s liability insurance certificate
- Certificate of VAT registration
- Latest corporate bank account statement
- HMRC registration evidence, such as including PAYE number and accounts office reference number
- Evidence of ownership of, or a commercial lease for, business premises
While a minimum of four documents has to be submitted, it can be helpful to provide more particularly if there is potential for the Home Office to have concerns about any of those intended to be submitted.
Additional supporting documents
As well as the four pieces of documentation, employers must also:
- Explain why they are making an application for a sponsor licence
- Specify the industry they are operating in
- State their weekday opening and operating hours
- Submit a current hierarchy chart detailing all owners, directors and board members
- Submit a list of the names and job titles of all employees, if the organisation has 50 employees or fewer
- Specify the names of everyone who has access to the email address supplied with the online sponsor licence application
- Provide a contact (landline) telephone number
This information would usually be submitted within a covering letter.
In addition to the mandatory documentary evidence in relation to the organisation, if a skilled worker is being hired the organisation will also need to provide specific information relating to the role(s) to be sponsored. This includes:
- The job title and Standard Occupational Classification (SOC) Code for the role.
- A job description detailing the duties of the role
- Details of the skills, experience and qualifications required to perform the role.
- The guaranteed salary if the job were vacant at the date of the sponsor licence application.
- Details of where the role sits on the organisational hierarchy chart. The organisation must indicate which jobs are currently vacant and for which it intends to assign a Certificate of Sponsorship.
Submitting the supporting documents
Pre-COVID, the requirement was to post original or certified copies of the supporting documents. However, due to pandemic restrictions, sponsor licence applicants can now email their supporting documents to the Home Office in pdf format.
It is unclear if this will remain a temporary measure or if the Home Office will reinstate the old practice of sending documents by post.
The documents have to be provided to the Home Office within five days of the application being submitted on the SMS, although this has been relaxed temporarily under emergency pandemic measures.
This is a narrow window in which to examine Appendix A, determine which tables are relevant and which documents are needed, and to collate all the required information.
As such, employers are advised to prepare their supporting documentation pack in advance of completing the form and the clock starting on the 5-day deadline.
In practice, it can often take organisations a number of weeks to collate the necessary documents, which will delay the time required to obtain the sponsor licence, but avoids potential issues and grounds for rejection if there are errors in the supporting documentation.
It is recommended that the supporting documentation is sent via special or recorded delivery so that the delivery can be tracked.
Submitting the licence application form
The online sponsor licence application form should only be submitted once the AO is satisfied that the UK organisation has the necessary systems in place to comply with its sponsor duties and obligations and all of the supporting documents are in order and ready to be submitted.
Once completed, the online sponsor licence application form can only be submitted by the Authorising Officer (AO). Legal representatives may assist the AO in completing the draft online application form but must not submit it.
The AO should save a copy of the submission sheet that is generated once the application is submitted as it is not possible to obtain a further copy of it once it has been closed.
A copy of the completed and submitted online sponsor licence application should be retained for the UK organisation’s sponsor records.
Apply by head office or individual branches?
Employers have a number of potential options if they need a licence to cover a network of UK-based operations:
- A single sponsor licence that covers the head office and all branches in the UK.
- A single sponsor licence that covers the head office and some UK branches.
- The head office and each UK branch applying for their own separate sponsor licences.
- Grouping a number of UK branches under one single sponsor licence, for example on a regional basis.
The approach to take will largely be determined by practical considerations. If an organisation has a network of branches in the UK, applying for one licence will be easier and less resource-intensive to manage. But if the Home Office takes enforcement action, the network as a whole will be affected by the sanction, while individual licences would more likely result in an investigation into the other branches in the network rather than automatic sanctions.
How long does it take to get a sponsor licence?
There are various stages to the sponsorship licence process, and timing is an important factor in ensuring you progress through the application correctly.
Understanding the processing timescales can also help with recruitment planning.
If you are applying for your first licence, you will need to allow for up to 8 weeks for the application to be processed. Processing times can usually be reduced if the application is comprehensive and correct, but at best, licence application decisions will generally be no quicker than 4-6 weeks.
A new premium service was launched in November, which allows licence applicants to pay an additional £500 to receive a decision on their application within ten working days. This service can be of value where the employer is concerned not to lose a candidate through protracted processing.
Factors which can affect processing times include:
- Pre-licence compliance visit: If the Home Office elects to conduct an on-site audit, the employer should be given two weeks’ notice of the date of inspection. It can take a further six to eight weeks for the inspection report to be written and the application progressed. Pre licence visits are more common among smaller employers and those organisations the Home Office consider to be ‘high risk’.
- Supporting documents: As we detailed above, the requirements on submitting supporting documents are strict with considerable scope for error. Specific documents must be provided depending on the type of organisation that is applying and certified copies must be certified in the prescribed manner. The documents also have to be submitted to the Home Office by post within five working days of the online application form being submitted. If not, the application will be rejected.
- Availability of key personnel: The appointed Authorising Officer must be available to sign the submission sheet that will accompany the supporting documentation to be sent to the Home Office within five working days of submission of the online application form (although this has been relaxed temporarily under emergency pandemic measures).
- Processing of sponsored worker’s application: Once the licence has been granted and the CoS assigned, the worker has three months to make the visa application to the Home Office. Home Office processing of this application will also need to be factored in when determining the employment start date. Decisions on overseas applications can be up to 3 weeks after the visa interview, or up to five working days using the priority service. Visa applications made in-country from within the UK can take up to eight weeks after the BRP appointment. Priority service and super priority services offer expedited processing in 5 working days or the next working day, respectively, but these may not be available due to pandemic service restrictions.
How much does a sponsorship licence application cost?
As part of the online submission process, the AO will be required to pay the appropriate sponsor licence application fee.
The fee to apply for a sponsor licence will depend on the size and type of the organisation.
- ‘Small’ business sponsor licence fee £536: If the UK organisation has charitable status or is subject to the small companies regime per sections 381 – 384 of the Companies Act 2006. A company will usually qualify as a small company if it meets two of the following criteria in its financial year:
- A turnover of not more than £10.2 million.
- A balance sheet total of not more than £5.1 million.
- It employs no more than 50 employees.
- Large sponsor licence fee £1,476: This will apply to any organisation that does not meet the criteria for, or is exempt from, the small company regime.
The sponsor licence application also carries a number of other related charges and fees:
- Assigning the CoS – £199 per certificate
- Immigration Skills Charge – £1000 per year, per worker, or a reduced rate of £364 for smaller companies & charities
- Fees for the sponsored worker’s visa application
Pre-licence compliance visit
The Home Office has powers to undertake a compliance visit before making a decision on a sponsor licence application. The inspections are used to determine the applicant’s ability to meet the suitability requirements.
During the visit, Home Office officials will want to assess the organisation’s HR systems and can request access to documents relating to the employer’s sponsored workers. They will also want to speak with the Authorising Officer and can interview sponsored workers to verify that the role is genuine.
Applicants are not always given notice of the inspections, as such, it is advisable to prepare for the visit prior to submitting the licence application. In the event the Home Office opts to conduct a pre-licence visit, you will be well placed to pass the inspection.
Where breaches are identified during the inspection, the application can be refused.
Preparing for a Home Office inspection
If you have been notified that the Home Office intends to visit your premises to conduct a compliance audit, the following will be critical to preparations:
- Check the information on the licence application form and SMS is correct and complete.
- Ensure all appointed key personnel meet the suitability criteria and are trained in their roles and duties.
- The AO should be prepared to be interviewed by officials, and to give a comprehensive and detailed insight into the organisation’s compliance systems and processes.
- Conduct a mock compliance audit to verify compliance and identify any issues to be addressed.
- Have relevant documents ready for inspection.
- Be cooperative, respectful and courteous towards the compliance officers.
- Keep a note of the questions asked and the answers given and ask for a copy of the notes taken by the compliance officers.
Sanctions for non-compliance
The sponsor licence duties are an ongoing concern for licence holders.
During the pre-licence application stage, if the Home Office is not satisfied that the duties can be met, the application will be refused.
If the licence is granted, the Home Office has powers to inspect sponsors at any time, and without notice. Where compliance breaches are identified, the Home Office can take enforcement action against the sponsor, by downgrading the licence, suspending or even revoking the licence.
In 2019, the Home Office suspended almost 600 sponsor licences and revoked more than 400.
With a suspended licence, your sponsored workers can continue to work for you, but you cannot assign a certificate of sponsorship to a new employee and you will need to respond to the Home Office within 20 days to put forward your case as to why the licence should be reinstated. This will require extensive preparation to collate evidence, identify a correction plan within the timeframe. The Home office can then decide to reinstate the licence, to downgrade it or revoke if the compliance breaches are substantial.
A revoked licence will be severely disruptive to operations. You will no longer be able to lawfully employ your sponsored workers, whose visas will be curtailed, requiring them to find new sponsorship or leave the country within strict timeframes.
The organisation will usually have to wait at least 12 months before they can apply for a new licence.
It is not possible to appeal a decision to revoke a licence, but where certain issues are present, it may be possible to challenge the decision through the Judicial Review process. We have specialist experience in Judicial Review proceedings, and strategies to avert such action and resolve disputes with the Home Office through more collaborative means.
In addition to punitive measures impacting the sponsorship licence, where duties under the prevention of illegal working regime have been breached, this can result in a fine of up to £20,000 per illegal worker.
Home Office decision
The Home Office will email the organisation with their decision. If successful, the employer will be added to the UK’s register of licensed sponsors.
In practical terms, the notification letter will also include confirmation of the number of CoS allocated and the user ID for the Level 1 user.
The AO should send on the user ID to the Level 1 user, who will separately be sent a password to access and use the SMS.
Sponsors are advised to keep the password and user ID separately and securely, and to ensure no one but the named Level 1 user accesses the system using these credentials.
How long is a sponsor licence valid for?
Once granted, a sponsor licence is valid for a period of four years. Licences do not automatically renew. The organisation must instead make a renewal application in advance of their old licence expiring, to avoid any issues with their sponsored workers’ visa validity.
The renewal application itself is relatively straightforward, requiring the AO to make the request and pay the fee through the SMS. However, the overall renewal process is, in many ways, more challenging than the initial application process.
The Home Office will have four years of information on the SMS and documentation to assess, to verify compliance with the licence duties.
If the organisation has not been subject to a compliance visit during the four-years of its licence, you should prepare for the Home Office to attend the premises to conduct an inspection before granting a renewal of the licence.
As such, it will be important to ensure the licence is fully in order and the SMS up to date before making the renewal application.
If your sponsor licence application is refused or rejected
A refused or rejected licence application will be hugely disappointing and frustrating for employers. After the effort and investment placed in the application process, without securing a licence they are not able to proceed with their recruitment plans and may potentially lose out on a candidate who is awaiting their Certificate of Sponsorship.
The options open to you after a failed application will depend on why the application failed. The main source of information will be the Home Office decision letter.
If the application has been rejected, this means the application itself is at issue. For example, incomplete or incorrect supporting documentation may have been provided and the caseworker is unable to make a decision on the basis of what has been submitted. If the application is rejected, you do not have to wait to make a new application. It will however be important to ensure the new application addresses the faults of the original.
If the application has been refused, you may be subject to a cooling-off period of at least six months before you can apply again.
This is because a refusal usually relates to failing to meet any of the sponsorship licence requirements. For example, if the organisation is not operating in the UK or the role does not meet the minimum salary requirement, the application will be rejected.
Need specialist assistance with your sponsor licence application?
While applying for a sponsor licence has become a mandatory prerequisite for employers recruiting non-UK resident workers from overseas, the UK immigration rules remain complex, demanding and costly for employers bringing talent to the UK.
DavidsonMorris can provide clients with a complete employer sponsorship licence application service, with our team of UK immigration specialists highly experienced in all the documentary and evidentiary requirements vital to a prompt and stress-free process when applying for a sponsor licence. We also provide guidance on best practice in managing the licence and avoiding enforcement issues. For guidance on applying for a sponsor licence, contact us.
We have particular expertise in complex applications involving group organisations, time pressures and taking on previously refused applications. The Home Office notification is not always clear in identifying the grounds for a failed application.
Our experience in licence applications we can assess the original application and determine areas to be addressed and how to rectify these in preparation for a new or amended application. We can also identify if there have been factual errors made on the part of the Home Office and how to rectify this. We can advise on the approach that will be in your best interests in terms of processing times, cost and prospect of success.
Sponsor licence application FAQs
What is a sponsor licence?
A sponsor licence grants permission to a UK employer to sponsor EU and non-EEA skilled workers. Employers must make an application to the Home Office to evidence their eligibility and prove they meet the strict sponsorship compliance requirements.
How much does it cost to apply for a sponsorship licence?
Small businesses and charities pay a sponsor licence application fee of £536, while all other organisations pay £1,476. As well as the application fee, the sponsor will also have to pay the Immigration Skills Charge (£1000 per year per sponsored worker for larger employers) and pay £199 to issue each Certificate of Sponsorship.
What documents do you need for sponsorship?
Sponsor licence applicants will need to refer to Appendix A of the Home Office's sponsor licence guidance, which details the mandatory documents to be provided with the licence application.
How long does a sponsor licence last?
How long does a sponsor licence last? A sponsorship licence lasts four years. The sponsor should apply to renew the licence before it expires.
How do you become a Tier 2 sponsor?
To become a Tier 2 sponsor, an organisation has to make an application to the Home Office for a sponsorship licence, evidencing that they meet the requirements and pay the application fee.
How long does it take to get a sponsorship licence UK?
Licence applications take around six weeks to process, but organisations should note that time will need to be dedicated to preparing and compiling the submission, which can itself take a number of weeks. With premium processing, employers can receive a decision on their application within ten working days for an additional £500.
Last updated: 12 January 2021