Sponsor Licence Guidance for Employers

To employ skilled workers from overseas under certain sponsored work routes, most UK employers will need a valid sponsor licence. The Home Office’s official sponsor licence guidance documentation is extensive and includes detailed information for employers on how to apply for a sponsor licence, their responsibilities as a sponsor, and how to comply with immigration rules when sponsoring workers.

Hiring from overseas is a business decision that is rarely taken lightly. UK immigration rules are complex and demanding on employers of foreign workers. Non-compliance will result in harsh penalties designed to impact business operations. Yet shortages in the UK talent market mean international recruitment is often a commercial necessity, making sponsor licence guidance essential for employers to ensure compliance with the regulations.

If your organisation is preparing to make a licence application, this article offers comprehensive sponsor licence guidance, with insights into the UK sponsorship licence eligibility criteria, application process and ongoing compliance obligations.

 

Section A: What is a Sponsor Licence?

 

The UK’s sponsor licence system, introduced in November 2008, was designed to regulate which employers in the UK can employ non-UK resident workers.

A sponsor licence is now a mandatory requirement for organisations that wish to hire non-UK residents for most categories of work visa. The licence allows companies to access the wider, global talent pool, ensuring they remain competitive in a global economy.

Organisations must apply to the Home Office for a sponsor licence, providing extensive documentation to evidence eligibility under the licence requirements.

However, sponsor licences also impose strict compliance obligations on the employer, with the aim of preventing illegal working and abuse of the sponsorship system.

Failure to meet these obligations can result in a refused licence application, or where there is an existing licence, enforcement action that will impact the organisation’s permission to sponsor foreign nationals.

You can read our extensive guide to the UK Sponsor Licence here >>

 

1. Types of Sponsor Licence

 

The first step in the application process is to determine which type of sponsor licence your organisation needs.

There are two types of sponsor licence: Worker Licences and Temporary Worker Licences. When applying, employers will need to select the appropriate type, or both, based on their recruitment needs.

 

a. Worker Licences

Worker licences allow businesses to sponsor foreign workers for long-term or permanent positions. These licences apply to skilled roles that require specific qualifications or experience.

 

b. Temporary Worker Licences

Temporary Worker Licences allow businesses to sponsor foreign workers for short-term roles, often linked to specific projects or seasonal demand. The visa categories under this licence type are designed for non-permanent roles, and they typically have specific restrictions on duration and employment conditions.

Eligibility for a temporary worker licence requires businesses to show that the roles are genuinely temporary and meet the specific criteria of the visa category being applied for.

You can read our extensive guide to the Temporary Worker Sponsor Licence here >>

 

Licence Type	Visa Category
Worker Licence	Skilled Worker
	Senior or Specialist Worker (Global Business Mobility)
	Minister of Religion
	International Sportsperson
Temporary Worker Licence	Scale-up Worker
	Creative Worker
	Charity Worker
	Religious Worker
	Government Authorised Exchange
	International Agreement
	Graduate Trainee (Global Business Mobility)
	Service Supplier (Global Business Mobility)
	UK Expansion Worker (Global Business Mobility)
	Secondment Worker (Global Business Mobility)
	Seasonal Worker

 

Section B: Sponsor Licence Eligibility Guidance

 

The Home Office will be looking at a number of key criteria when determining your suitability and eligibility for a UK sponsorship licence, namely:

 

a. It is a genuine organisation that is based and operating lawfully in the UK.

b. It has HR systems that are effective in managing all the sponsorship duties, with appropriate human resources and recruitment policies and practices in place.

c. It is recruiting for genuine roles that are eligible and meet the relevant skill level and appropriate rates of pay.

d. There are nominated key personnel that meet the suitability requirements of being honest, dependable and reliable.

 

There is no minimum or maximum size of organisation that can apply, but in all cases, you must satisfy the Home Office criteria.

 

1. Proof of Lawful Trading

 

The Home Office will require proof that your organisation is based in the UK and is operating and trading lawfully. The Home Office will also want full details about the premises where the sponsored worker will be working. There are a number of company-related documents that will need to be collated and submitted to prove that you are a genuine organisation.

 

2. Adequate HR Processes and Systems

 

Your organisation’s HR systems, processes and procedures must be in full compliance with the sponsor duties. This means the application must address questions around the suitability of your organisation’s immigration policies and procedures, and whether internal knowledge gaps exist as a result of the new and stringent compliance duties your organisation will be operating under.

In your business case, you must provide information about your current HR processes and procedures, as well as any developing systems which you will be implementing to ensure compliant practices are in place within your organisation and that training has been delivered to all relevant internal personnel so that they have the required knowledge and skill.

The Home Office can carry out an inspection by using digital compliance checks or during a pre-licence site visit.

During a site inspection, the officers have the authority to interview your personnel.

You may not necessarily be given notice of an onsite inspection, which makes it important to be prepared for a visit when you make your application.

It is advisable to conduct a mock audit in advance of submitting your application to identify areas of weakness and non-compliance (such as employment contract terms), providing recommendations to ensure you meet your duties as a sponsor licence holder throughout the life of the licence.

 

3. Genuine, Qualifying Vacancy

 

The vacant role(s) must meet the relevant skill level of the visa route and be assigned a SOC code. You should review the job description for the vacant role against the SOC codes to ascertain where the role sits, as sometimes it can fit into two SOC codes, but generally, it can match one SOC code more appropriately than the other.

The correct salary for the vacant role must also meet the relevant minimum salary or going rate under the visa rules. The salary you propose to pay must be the same or higher than that relevant threshold.
The Home Office will also look to determine if the role is genuine and requires the jobholder to perform the specific duties and responsibilities for the job, and does not include dissimilar and/or lower-skilled duties.

Examples of ineligible vacancies include those that:

 

a. Are based on misleading, incorrect or exaggerated job descriptions that deliberately make it seem that the job meets the category requirements, when it does not.

b. Do not exist, in order to enable a sponsored employee to enter or reside in the UK.

 

Remember also that the Home Office may well require the sponsor to produce work records or other evidence that prove that the staff in question are wholly engaged with the work detailed on the Certificate of Sponsorship and not helping out in more ‘mundane’, less skilled activities.

 

4. Appoint Eligible Key Personnel

 

You must appoint certain key personnel, such as the Authorising Officer, Key Contact and Level 1 user. Key personnel have specific responsibilities, and should be provided training by their employer to ensure they are aware and able to fulfil these obligations.

 

Table: Key Personnel Roles and Responsibilities

Role	Responsibilities	Eligibility Criteria
Authorising Officer	Overall responsibility for compliance and sponsorship management	Must be a senior employee, no criminal or immigration breaches
Key Contact	Liaison with the Home Office regarding the sponsor licence	Must be based in the UK, reliable point of contact
Level 1 User	Day-to-day management of the Sponsorship Management System (SMS)	Must be trained in SMS, no previous non-compliance issues

 

These roles must be filled at all times by eligible individuals for the duration of the licence validity. This means if one of the key personnel leaves the organisation or goes on an extended period of leave, someone else should be appointed in their place.

 

5. Co-operating with the Home Office

 

Throughout the application process and the duration of the licence, the sponsor must be responsive and cooperative with any requests from the Home Office. This could include requests to provide certain information or documentation or to gain access to carry out a site inspection. Sponsors have to act honestly and with full disclosure.

 

Section C: Sponsor Licence Application Guidance

 

The Home Office uses the sponsor licence application process to ensure your organisation is genuine in its need to hire from overseas and that it has the systems and processes in place to comply with specific sponsor duties.

 

1. How to Apply for a Sponsor Licence

 

The application process itself involves completing an online licence application and submitting supporting documentation to meet the necessary evidentiary requirements. The supporting documentation must be as prescribed by the Home Office under Appendix A of the Immigration Rules, and will be determined by a number of factors.

The three most important things you must address, and satisfy, in full in your licence application are:

 

a. Supporting documents: as per the Appendix A requirements, with further relevant evidence.

b. Business case: evidencing the reasons why you need a sponsor licence.

c. Ongoing licence compliance: proof that your HR systems, processes and procedures meet the required standards.

 

Following the receipt of the documents, your organisation may then be subject to a digital compliance check or a compliance visit from the Home Office to assess whether or not to grant the licence.

During the process, your HR and recruitment processes will be scrutinised, and officials will expect to see proof of how you intend to meet your compliance duties. You will also be required to comply with the UK’s illegal working requirements, which state that all employees must provide documentation that proves their right to work before being employed by a UK company. You must retain copies of this information.

Given what is at stake, employers should take early advice to support in compiling a thorough and comprehensive submission and ensure the organisation is geared to meeting the duties of a sponsor licence holder on a continued basis.

It is also important to remember that the Home Office has powers to investigate sponsor licence holders at any stage during the validity of their licence – with or without notice. This means that, at any one time, all records and processes should be in order to avoid punitive action such as a licence suspension.

You can read our extensive guide to the Sponsor Licence Application here >>

 

2. Sponsor Licence Supporting Documents

 

When compiling your application, you will need to refer to the latest version of Appendix A to determine which supporting documents will be needed to accompany your submission. The required documents will depend on the type of organisation that is applying, such as a start up, LSE-listed company or public body.

In most cases, you will need to provide at least four pieces of evidence in original form, or as a certified copy. Importantly, these must be supplied within five days of the initial application. Failure to submit all required documents may result in an application being delayed or rejected and further costs being incurred.

You will also need to present information concerning your business activities in the UK, the number of existing employees and details of how your organisation intends to comply with the licence requirements.
In practice, it can quickly become onerous and time-consuming for applicants to gather the required documents. If your organisation is large or complex, it can be challenging to source documents and information from different parts and departments of the business.

Given each organisation is different, we provide specialist advice as to the full extent of documentation requirements specific to your application to help avoid delays or issues.

 

3. Sponsor Licence Business Case

 

In addition to the company information, you will be required to present a robust business case to the Home Office, illustrating why you are seeking to secure a sponsor licence. It is always recommended that you provide evidence to support your business case.

You will need to include details of your company, the sector you occupy and why you need to apply for a sponsor licence.

It is critical to your application that you present a compelling case and cover areas that will support the genuine nature of your application.
Importantly, decisions about sponsor licence applications and the criteria used to assess them are not black and white. There is a strong element of subjectivity applied to your case using the ‘genuineness test’.

Under the genuineness test, the Home Office will look at the role(s) you are looking to recruit foreign nationals for, and how these roles fit with your organisation as a whole.

Applications commonly fall foul of the genuineness test, resulting in a refused licence application.

You must convince the Home Office:

 

a. That the role meets the requirements of the category.

b. That the role ‘fits’ with your organisation. In other words, it seems reasonable that a business or organisation of your type, operating in your sector, should need that ‘kind’ of role.

c. 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, for example, you won’t be paying the worker an extra £10k a year to deliver the same role simply to meet the requirements of the category.

 

If you do not have a specific role in mind but want to apply for a sponsor licence because you know that having one might and will be useful in the future, you can do this. However, you should prepare for the Home Office to ask the same questions about the type of role you plan to recruit for in the future in order to make the same assessment as to whether such a role ‘fits’ with the organisation as a whole.

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’ and most likely be granted.

 

Section D: Sponsor Licence Guidance: Employment Law Considerations

 

In your licence application, you will also need to evidence that your organisation is compliant with UK employment law.

 

1. Sponsored Worker Employment Rights

 

Sponsored workers in the UK have the same employment rights and protections as any other employee. They are entitled to fair pay, including the National Minimum Wage or higher salary thresholds specific to their visa category, such as the Skilled Worker visa.

They are also protected by working time regulations, which cover maximum working hours and paid holidays.

Sponsored workers have the right to a safe working environment, protection from discrimination, and access to statutory benefits like sick pay, maternity, paternity, and parental leave.

After two years of service, they gain protection from unfair dismissal and are entitled to redundancy pay if made redundant.

Employers must also provide a written employment contract and ensure equal access to training and development opportunities.

They can also join trade unions and are entitled to consultation on significant workplace changes.

 

2. Common Areas of Risk

 

Key areas of licence compliance risk include:

 

a. Employment Contracts and Benefits

Sponsored workers must have a valid employment contract that outlines their role, responsibilities, and rights as per their entitlement under UK laws. This contract should specify their entitlement to paid holidays, sick leave, and other statutory benefits. Employers must honour these contracts and ensure foreign workers are not disadvantaged compared to their UK peers.

A common area of risk for employers is compliance ensuring all new workers have a written statement of employment from their first day of employment.

To verify compliance, the Home Office can request to inspect documents which you intend to issue to your sponsored workers, such as the contract of employment, the employee handbook and GDPR privacy notices.

The sponsor must also ensure its policies do not discriminate against individuals or specific groups within their workforce and must be mindful of the Equalities Act 2010, and behave in a manner that is honest, respectful, trusted and fair.

Reviewing the employment documentation in advance of the application will ensure any issues are addressed and that you are fully compliant.

 

b. Fair Treatment and Equal Opportunities

UK employment law prohibits discrimination based on characteristics such as nationality, race, gender, religion, and age. Employers must ensure that sponsored workers are treated fairly and equally, with the same opportunities for promotion, training, and benefits as UK employees.

 

c. Minimum Wage

Employers are legally obligated to pay the National Minimum Wage or National Living Wage to all employees. For sponsored workers, employers must also ensure they meet the salary thresholds set by their visa category, such as the relevant Skilled Worker visa minimum salary requirement. Failure to meet this could result in the worker’s visa application being refused or their existing visa being curtailed. The sponsor would also likely face enforcement action.

 

d. Provision of Safe Working Conditions

Health and safety laws in the UK require employers to ensure that their workplaces are free from hazards. Sponsored workers should receive the same protections and benefits as local employees, such as:

 

i. Health and safety training.

ii. Access to protective equipment if needed.

iii. Regular risk assessments and measures to prevent accidents or injuries.

 

Section E: Sponsor Licence Processing Times

 

When making a sponsor licence application, it is helpful to understand how the process will impact your recruitment and onboarding schedule, particularly if you have already identified a candidate to sponsor.

If there are time pressures for your organisation, take advice to understand the best approach for your circumstances.

 

1. Standard Processing Times

 

Under the standard service, sponsor licence applications are typically processed within 8 weeks.

During this period, the Home Office will assess the legitimacy of the business, review the required supporting documents, and determine whether the business meets the eligibility criteria for a sponsor licence.

Factors that affect the 8-week processing timeline include:

 

a. The complexity of the application (e.g., businesses with complex structures or previous non-compliance issues may face longer scrutiny).

b. The quality and accuracy of the supporting documentation.

c. The workload and current processing volume at the Home Office.

 

2. Priority Licence Processing

 

If you require a faster decision, you may be able to use the Sponsor Licence Application Priority Service, which costs an additional £500 on top of the standard sponsor licence application fee. This service aims to provide a decision within 10 working days instead of the standard 8 weeks.

Businesses must apply for the priority service separately.

However, only a limited number of slots are made available each working day. Slots can fill up quickly, so businesses must act fast to secure this option.

To access the priority service, licence applicants submit a request to the Home Office once the application has been submitted. If the request is approved, the Home Office will contact the business with instructions on how to proceed with the additional payment and receive a decision faster.

 

3. Delayed Processing

 

If your sponsor licence application is delayed beyond the standard processing time, there are steps you can take to address the situation:

 

a. Check Application Status

The first step is to check the status of your application via the Sponsorship Management System (SMS) or by contacting the Home Office directly. Sometimes, the delay may be caused by a backlog or the need for additional information.

 

b. Respond to Requests for Additional Information

The Home Office may request further documentation or clarification if they find any discrepancies in your application or need more details. It’s important to respond to these requests promptly, as delays in responding can extend the processing time further. Ensure you submit all additional documents accurately and without errors.

 

c. Contact the Home Office

If you have not received any updates after the standard 8-week period, you can contact the Home Office to inquire about the status of your application. While it’s important to remain patient, timely communication can help clarify any issues that may be causing the delay.

 

d. Consider Professional Assistance

If your application has been delayed due to complexities, such as missing documents or compliance issues, take legal advice to understand your options and how to expedite the process or prevent further delays.

 

Section F: Sponsor Licence Fees & Costs Guide

 

Before your application will be considered, you will need to pay the relevant sponsor licence application fee. There are two levels of fee:

 

a. For smaller companies and charities: £536

b. For larger companies: £1,476

 

Table: Sponsor Licence Application Fees (By Business Size and Type)

Business Size/Type	Licence Type	Application Fee
Small or Charitable Organisations	Worker Sponsor Licence	£536
Medium or Large Organisations	Worker Sponsor Licence	£1,476
Small or Charitable Organisations	Temporary Worker Sponsor Licence	£536
Medium or Large Organisations	Temporary Worker Sponsor Licence	£536
Any Size Business	Priority Processing Fee	£500

 

The definition of ‘smaller’ company is taken from the Companies Act 2006, whereby at least two of the following must be met:

 

a. The company must have a turnover of no more than £10.2 million.

b. The company must have a balance sheet total of no more than £5.1 million.

c. There must be no more than 50 employees.

 

It is important to pay the correct fee, as your application can otherwise be refused.

In addition to the application fee, the organisation will also have to pay the Immigration Skills Charge per year per sponsored worker (currently £1000, or £364 for smaller companies).

 

Table: Immigration Skills Charge Breakdown

Business Size	Per Worker Per Year (Skilled Worker Visa)	Total Cost for 3-Year Visa
Small or Charitable Organisation	£364	£1,092
Medium or Large Organisation	£1,000	£3,000

 

With a valid licence in place, the sponsor also has to pay each time it assigns a CoS to a worker, which is currently £239 per Worker visa or £25 per Temporary Worker visa.

 

Table: Fees to Assign CoS

Licence Type	Visa Category	Fee to Assign a Certificate of Sponsorship (CoS)
Worker Licence	Skilled Worker	£239
	Senior or Specialist Worker (Global Business Mobility)	£239
	Minister of Religion	£239
	International Sportsperson	£239
Temporary Worker Licence	Scale-up Worker	£25
	Creative Worker	£25
	Charity Worker	£25
	Religious Worker	£25
	Government Authorised Exchange	£25
	International Agreement	£25
	Graduate Trainee (Global Business Mobility)	£25
	Service Supplier (Global Business Mobility)	£25
	UK Expansion Worker (Global Business Mobility)	£25
	Secondment Worker (Global Business Mobility)	£25
	Seasonal Worker	£25

 

Section G: Sponsor Licence Guidance – Ongoing Compliance

 

While a sponsor licence affords employers access to overseas talent, it also carries onerous compliance duties.

The key objectives of the sponsor duties are to:

 

a. Prevent abuse of assessment procedures

b. Capture early patterns of sponsored employees’ behaviour of concern

c. Address possible weaknesses in processes

d. Monitor compliance with the Immigration Rules

 

Organisations have to meet these duties to avoid Home Office enforcement action.

 

1. Sponsor Licence Duties

 

The sponsor’s duties begin from the time the licence is granted and continue unless and until the licence is surrendered by the organisation or revoked by the Home Office.

 

Table: Employer Obligations After Obtaining Sponsor Licence

Obligation	Description	Reporting Timeframe
Reporting Worker Absence	Report any unauthorised absence of 10 consecutive working days	Within 10 working days of the 10-day absence
Changes in Worker’s Employment	Report changes in job title, salary, or duties	Within 10 working days of the change
Termination of Employment	Report if the sponsored worker leaves the organisation	Within 10 working days of the termination
Change in Business Details	Report changes in business structure or key personnel	Within 20 working days of the change
Maintaining Employee Records	Keep detailed records of employees, including right to work	Ongoing

 

a. Monitoring duties

Sponsors must keep records for each migrant worker, which include their up-to-date and current residential address and contact telephone number.

You will need to have HR systems and procedures in place to monitor their sponsored workers’ attendance and absence and generally ensure they are complying with the terms and conditions of their visa. Issues such as non-attendance, non-compliance or disappearance must be reported to the Home Office.

 

b. Reporting duties

Sponsor licence holders are required to notify the Home Office of certain developments, updates and changes relating to their sponsored workers and to the organisation itself. This information should be updated on the organisation’s Sponsorship Management System (SMS).

Changes to the organisation which have to be reported include change of address, change of key personnel, change of organisational ownership, entering administration, and change in organisational size from small/medium to large company.

These must be made within 20 days of the change.

In relation to sponsored workers, the sponsor has to update the SMS, usually within ten days, in the event the sponsored worker:

 

i. Does not present for their first day of work without notifying your organisation.

ii. Has their contract of employment for services terminated before the date provided in the certificate of sponsorship, e.g. due to resignation or dismissal.

iii. No longer requires sponsorship because they move to an immigration route that does not require one, such as Indefinite Leave to Remain

iv. Is absent from work without pay for 4 weeks plus (subject to the reduction in salary provisions).

v. Is affected by TUPE or similar protection, as in the case of a merger or demerger.

vi. Is a person to whom information comes to light suggesting they may be breaching the conditions of their leave?

vii. Is absent from work for more than 10 consecutive days without permission (which must be reported within 10 working days of the 10th day of absence).

viii. Undergoes a significant change of circumstances relating to job title, core duties, salary, or location of employment.

 

These reporting requirements are taken seriously by the Home Office and the courts. In one leading case, a sponsor’s failure to report the fact that several workers had moved on was treated by the court as “a serious breach of [the Sponsor’s] sponsor duties and severely hinders [sic] UKVI in its duty to maintain effective immigration control.” This issue also highlights how the sponsor’s failure to perform its duty properly can impact the sponsored employee’s future in the UK.

A sponsored employee who gives reason to suspect them of criminality or terrorism must be reported to the police.

 

c. Record keeping duties

Sponsors must follow the guidance on retaining records as per Appendix D. This involves keeping specific information and documents relating to your sponsored workers, including (but not limited to):

 

i. A copy of each sponsored worker’s current passport

ii. Proof of the worker’s date of entry to the UK, where relevant

iii. Each sponsored worker’s National Insurance number

iv. Copy of the worker’s DBS check, if required

v. History of the worker’s contact details, including UK residential address, personal email address & contact telephone number

 

Specific documents may be required depending on the type of licence being applied for. For example:

 

i. Global Business Mobility – Service Supplier route – copy of the contract the organisation was awarded for the supply of service as well as either the relevant tender document for that contract or evidence of how the contract was awarded if not formally tendered

 

ii. Global Business Mobility – Secondment Worker route – copy of any relevant agreement or contract for goods or investment to which both the UK and the overseas businesses are parties. For each agreement or contract, you must also keep one of the following: evidence of how you were awarded the contract or investment, such as a tender application or investment application; a tender document for a contract for goods; or evidence of how the contract for goods was awarded if it was not formally tendered

These must be retained and made available to the Home Office for the longer of either one year from the date you end your sponsorship of the migrant or the date the documents have been examined and approved by a compliance officer, if it has been less than one year since the end of your sponsorship of the migrant.

In addition, you must also retain the supporting documents that were submitted with your licence application for the duration of your licence’s validity.

 

d. Assigning Certificates of Sponsorship

A Certificate of Sponsorship acts as your organisation’s confirmation to the Home Office that the individual you intend to recruit is suitable for visa sponsorship. The worker then uses the CoS – which is a unique reference number rather than a document – to apply for their visa.

There are two types of CoS: Defined and Undefined.

 

i. Defined CoS are for Skilled Worker visa applicants applying from overseas.

ii. Undefined CoS are for Skilled Worker visa applicants already in the UK and applicants for other visa categories.

 

There are rules to follow when using CoS; they are not transferable between workers, and they are valid for only 3 months from the date of issue, although the worker cannot apply for their visa more than three months before the start date listed on the CoS.

You will also have to request an allocation of CoS with your application, and then every 12 months. You should be able to justify the number you request based on your planned recruitment activity.

Certificates of Sponsorship are managed on your SMS. To allocate a CoS, your nominated Level 1 or Level 2 user would log onto the SMS and submit the requested information about the role being recruited for. A unique reference number will then be generated, which you should provide to the worker to make their visa application to the Home Office.

 

e. Right to work compliance

In addition to sponsor licence compliance, organisations must continue to comply with the prevention of illegal working regulations. Under these, you must continue to ensure that you conduct right to work checks on all workers, requesting documentation or evidence that proves their right to work before being employed. Records of the checks and copies of the documentation must also be retained as per the regulations.

One particular area of right to work risk for sponsors is unlawful discrimination against foreign workers. You must ensure that right to work checks are carried out in accordance with the Home Office’s employer guidance on all workers in the UK, not just migrant workers. This means even British nationals must also provide evidence of their working status.

 

2. Common Compliance Risks

 

The following are common areas of risk for sponsor licence holders:

 

a. Only employing sponsored employees appropriately qualified, registered or experienced for the job, or will be by the time they commence work.

b. Keeping registration documents, certificates and references confirming this, and providing this on request.

c. Not employing sponsored employees where they lack experience or permission (including where they no longer have permission) to do the job in question.

d. Not assigning Certificates of Sponsorship where there is no genuine vacancy meeting the sponsorship criteria.

e. Only employing sponsored employees where they intend and are able to fulfil the role in question.

f. Only assigning a Certificate of Sponsorship for a role at or above the appropriate skill level identified in the official sponsor guidance.

g. Only allowing the sponsored employee to undertake the specific role identified in their certificate of sponsorship and only assigning a certificate of sponsorship where the sponsored employee is likely to comply with all relevant conditions.

h. Complying with employment law: e.g. National Minimum Wage and paid holiday entitlement.

 

It is helpful to consider sponsor licence compliance as an ongoing, day-to-day concern to avoid breaches. This involves training your sponsor licence key personnel on their responsibilities, as well as other personnel involved in recruiting and onboarding foreign workers, such as HR managers and site managers. The procedures should be in place to support consistent and compliant licence management and migrant worker recruitment and sponsorship.

 

3. Penalties for Non-Compliance

 

Failure to meet the ongoing compliance obligations set by the Home Office can have serious repercussions for employers. Some of the potential consequences include:

 

a. Licence Downgrade or Suspension

If the Home Office finds that a sponsor is failing to comply with its obligations, the licence can be downgraded to a “B” rating, which limits the employer’s ability to sponsor new workers. The employer will be given a compliance action plan and must improve within a set period. If the issues are not resolved, the licence can be suspended or revoked entirely.

 

b. Licence Revocation

For serious or repeated non-compliance, the Home Office can revoke a sponsor licence, which would prevent the business from sponsoring any more foreign workers. Revocation can also lead to existing sponsored employees losing their right to work in the UK, which could severely disrupt the business’s operations.

 

c. Fines and Civil Penalties

Employers found to be employing foreign workers illegally (for example, by failing to report visa breaches or allowing workers to continue after their visa expires) can face hefty fines. Penalties can range from £45,000 per breach for a first offence, and £65,000 per breach for repeat offences.

 

d. Reputation Damage and Further Scrutiny

Non-compliance can damage the company’s reputation, both with the Home Office and the wider business community. Future immigration-related applications may face higher scrutiny, and the company may be subject to more frequent audits and compliance checks.

 

Table: Consequences of Sponsor Licence Non-Compliance

Non-Compliance Issue	Potential Consequences	Action Required
Failing to Report Worker Absence	Licence suspension, fines, or revocation	Immediate reporting of absences
Submitting Incorrect Documentation	Licence application rejection, or licence suspension or downgrade	Submit accurate and updated documentation
Failing a Compliance Audit	Licence downgrade, suspension or revocation	Implement corrective action plan (CAP)
Hiring Workers Without a Valid Right to Work	Civil penalties, licence suspension or revocation	Conduct thorough right to work checks
Failing to Update the Home Office on Business Changes	Licence suspension or revocation	Update the Sponsorship Management System (SMS)

 

4. How to Avoid Breaches & Penalties

 

To avoid the penalties and complications associated with non-compliance, businesses need to establish robust systems for managing their sponsor licence obligations.

 

a. Appoint a Dedicated Compliance Officer

A dedicated compliance officer or team should be responsible for monitoring and managing the business’s sponsor licence obligations. This individual or team should regularly check the visa statuses of sponsored workers, track important reporting deadlines, and ensure that all required records are kept up-to-date.

 

b. Implement an Internal Tracking System

Establish a system to track key compliance requirements, such as:

 

i. Visa expiration dates.

ii. Employee absences and changes in job roles or salaries.

iii. Reporting deadlines for changes in business structure or key personnel.

 

This could be a digital tool or software specifically designed to help businesses manage compliance efficiently.

 

c. Conduct Regular Internal Audits

Regular internal audits can help identify potential compliance issues before they escalate. By reviewing employee records, visa statuses, and reporting requirements periodically, businesses can ensure they remain compliant and address any gaps promptly.

 

d. Train Key Personnel

Ensure that key personnel (Authorising Officer, Key Contact, and Level 1 Users) are fully trained and aware of their responsibilities under the sponsor licence regime. Regular training updates can help them stay informed about any changes in immigration law or Home Office requirements.

 

e. Use Professional Services

For complex cases or large businesses, it may be beneficial to seek professional assistance from immigration specialists to help manage compliance, assist with reporting obligations, and ensure that the business meets all regulatory requirements.

 

Section H: How to Avoid a Refused Sponsor Licence Application

 

Sponsor licence applications can be refused for many reasons. Given the eligibility criteria are so stringent, and the information and documentation are so extensive, there is considerable margin for error and misinterpretation of the guidance for sponsors. Often, employers are unaware of the extent of the Home Office checks and scrutiny of the organisation, or of the commitment and resources needed on an ongoing basis to manage the licence and ensure continued compliance.

 

1. Common Reasons for Application Refusal

 

Applicants commonly risk a refused application where:

 

a. They fail to pass the genuineness test

b. They fail to pass a Home Office compliance audit.

c. They fail to comply with security standards.

d. They fail to engage with the Home Office or to respond to enquiries in a timely manner.

 

Before applying, it will be important to ensure all of these areas are in full compliance, or you risk a refused application and losing the application fee. Taking professional advice can provide you with guidance and insight critical to securing a successful sponsor licence application and proceeding with your recruitment plans.

 

2. Tips to Avoid a Licence Application Refusal

 

To prevent a refused sponsor licence application, businesses should take a proactive approach to avoid common mistakes.

Key steps include:

 

a. Carefully Review the Documentation Requirements

Before submitting an application, thoroughly review the Home Office’s list of required documents and ensure that all are accurate, up-to-date, and properly formatted. Using a checklist can help ensure that nothing is overlooked.

Double-check that all details, such as company names and addresses, match across all documents to avoid inconsistencies.

 

b. Ensure Eligibility Compliance

Verify that your business meets the eligibility criteria for obtaining a sponsor licence. This includes being a genuine, operating business with adequate systems in place to manage sponsorship duties. You should also ensure you have key personnel appointed for required roles, such as the Authorising Officer, Key Contact, and Level 1 User, and that they have a clean history in immigration compliance.

 

c. Provide a Strong Business Case for Sponsorship

To avoid rejection based on lack of evidence, clearly demonstrate why you need to sponsor foreign workers. Provide detailed explanations and evidence that show:

 

i. The role requires skills or experience that are not readily available in the UK workforce.

ii. The position is genuine and necessary for your business operations, supported by job descriptions and recruitment efforts.

iii. If relevant, show that you have attempted to recruit locally and provide evidence of why local candidates were unsuitable for the role.

 

d. Prepare for Compliance Inspections

The Home Office may conduct inspections either before or after granting a sponsor licence to ensure the business is capable of meeting its sponsorship responsibilities. Be prepared by having proper systems in place to monitor workers’ immigration statuses, report absences, and maintain employee records. If your business is unprepared or non-compliant during an inspection, your licence application may be rejected.

 

Section I: Summary

 

A sponsor licence is the formal permission granted by the UK Home Office that allows organisations to hire non-UK residents legally under specific visa categories, such as the Skilled Worker or Temporary Worker visas.

For UK employers, having a sponsor licence is essential if they intend to employ foreign talent, but it comes with several key obligations and risks that must be carefully considered.

Employers need to ensure they meet all the eligibility criteria before applying, which includes being a legitimate and financially stable organisation. It is also important to submit complete and accurate documentation, as errors or inconsistencies can result in application refusal.

Once a sponsor licence is granted, the business has ongoing responsibilities. These include maintaining accurate records of sponsored workers, reporting any changes in their circumstances, and adhering to UK employment laws, such as ensuring fair treatment and the appropriate minimum wage.

Failure to comply with the Home Office’s rules can lead to serious consequences, including the suspension or revocation of the licence, fines, and damage to the organisation’s reputation. Employers must implement strong compliance systems to manage their duties effectively, ensuring they remain in good standing and avoid the potential risks associated with non-compliance.

 

Section J: Need Assistance?

 

DavidsonMorris’ business immigration lawyers specialise in sponsorship licences for employers. With extensive experience of the Home Office application process, eligibility criteria and evidentiary requirements, we are on hand to advise and guide you in securing your licence to hire foreign workers.

We are highly experienced in managing the sponsor licence process on behalf of UK employers looking to hire foreign personnel. We can help ensure your personnel have a thorough understanding of their compliance duties under the sponsor licence and that your organisation has the required internal HR and recruitment infrastructure and skills in place to comply with the rules on an ongoing basis.

If you have a query about a sponsor licence application or require any form of sponsor licence guidance, please contact us.

 

Section K: Sponsor Licence Guidance FAQs

 

What is a UK sponsor licence?
A UK sponsor licence allows businesses to legally hire and sponsor foreign workers. It’s required for employers who want to employ non-UK residents under certain visa categories, such as the Skilled Worker visa. The licence is issued by the Home Office and comes with ongoing compliance obligations.

 

What are the requirements of a sponsor licence UK?
Sponsors have to prove they are a legally operating business in the UK with compliant HR systems in place and nominated key personnel, and that the role being recruited for qualifies under the visa criteria.

 

How long does it take to get a sponsor licence?
The standard processing time for a sponsor licence application is 8 weeks. However, businesses can apply for a priority service, which costs an additional £500 and offers a decision within 10 working days, subject to availability.

 

What documents will I need to apply for a sponsor licence?
You will have to provide the documents relevant to your type of organisation, as stated within Appendix A. These could include recent bank statements, VAT registration certificate and evidence of HMRC registration.

 

How much does it cost to apply for a sponsor licence?
The application fee depends on the size of your organisation. Small or charitable organisations pay £536 to apply, while medium or large businesses pay £1,476. Additional costs may include legal fees, priority service fees, compliance management, and the Immigration Skills Charge.

 

Can a sponsor licence be revoked?
The Home Office can revoke a sponsor licence if a business fails to meet its sponsorship obligations, engages in non-compliant practices, or is found to have provided false information. Revocation of a licence means the business can no longer sponsor foreign workers, and existing sponsored workers may need to leave the UK.

 

What is the Immigration Skills Charge, and when is it required?
The Immigration Skills Charge is a fee businesses must pay when sponsoring a worker under certain visa categories, such as the Skilled Worker visa.

 

How often does a sponsor licence need to be renewed?
Sponsor licences no longer need to be renewed. They will remain valid unless and until they are surrendered by the sponsor or revoked by the Home Office.

 

Can I appeal a refused sponsor licence application?
If your sponsor licence application is refused, there is no formal right of appeal. However, you can reapply, addressing the reasons for refusal, or seek professional legal advice to improve your chances of success in the subsequent application.

 

Section L: Glossary

 

Term	Definition
Sponsor Licence	A licence granted by the UK Home Office allowing businesses to sponsor non-UK nationals for work in the UK.
Home Office	The UK government department responsible for immigration, security, and law and order, including sponsor licence issuance and enforcement.
Skilled Worker Visa	A visa category allowing foreign nationals to work in the UK in skilled roles, sponsored by a licensed UK employer.
Temporary Worker Visa	A visa category for foreign nationals working in the UK for a short duration, including seasonal and charitable roles, requiring sponsorship.
Sponsorship Management System (SMS)	An online platform used by businesses to manage their sponsor licence duties, including issuing Certificates of Sponsorship and reporting changes.
Certificate of Sponsorship (CoS)	An electronic document issued by a licensed employer to a foreign worker, which is required for the worker’s visa application.
Key Personnel	Individuals within the sponsoring business responsible for managing the sponsor licence, including roles such as the Authorising Officer and Level 1 User.
Authorising Officer	A senior employee responsible for overseeing the sponsor licence and ensuring compliance with Home Office regulations.
Key Contact	The individual responsible for liaising with the Home Office regarding the sponsor licence.
Level 1 User	The person responsible for the daily administration of the Sponsorship Management System and maintaining compliance with sponsor duties.
Immigration Skills Charge (ISC)	A fee paid by employers when sponsoring certain workers, used to fund the development of UK skills and training programmes.
Right to Work Check	A legal requirement for UK employers to verify that an employee has the right to work in the UK.
Licence Downgrade	A penalty where the sponsor licence is downgraded from an “A” rating to a “B” rating, limiting the employer’s ability to sponsor new workers.
Licence Suspension	A temporary penalty where the sponsor licence is suspended, preventing the business from sponsoring new workers until compliance issues are resolved.
Licence Revocation	The cancellation of a sponsor licence, preventing the business from sponsoring workers and affecting the status of current sponsored employees.
Compliance Action Plan (CAP)	A plan provided by the Home Office to a sponsor with a downgraded licence, outlining the steps needed to regain full “A” rating status.
Immigration Skills Charge (ISC)	A fee imposed on UK employers when sponsoring foreign workers under certain visa categories, aimed at funding the UK’s skills training programmes.
UK Visas and Immigration (UKVI)	A division of the Home Office responsible for managing visa applications, enforcing immigration laws, and overseeing sponsor licences.
Compliance Audit	An inspection conducted by the Home Office to ensure that a sponsor is complying with their sponsor licence obligations.
Resident Labour Market Test (RLMT)	A recruitment process that used to require employers to advertise a role within the UK to prove no suitable local candidate was available (now discontinued for most roles).
Priority Service	An optional service provided by the Home Office that allows businesses to receive a faster decision on their sponsor licence application for an additional fee.
Absence Reporting	The requirement to report if a sponsored worker is absent from work for 10 consecutive working days without permission.
Right to Work	The legal ability for a foreign national to work in the UK, usually granted through a valid visa.

 

Section M: Additional Resources

 

UK Government: Apply for a Sponsor Licence
https://www.gov.uk/uk-visa-sponsorship-employers
Comprehensive guidance from the UK government on applying for a sponsor licence, including eligibility, fees, and the application process.

 

UK Government: Sponsorship Management System (SMS) Guide
https://www.gov.uk/government/publications/sponsorship-management-system-user-manual
Official user manual for the Sponsorship Management System (SMS), where sponsors manage licences and report changes.

 

UK Government: Skilled Worker Visa Guidance
https://www.gov.uk/skilled-worker-visa
Official guidance on the Skilled Worker Visa, detailing requirements for both employers and employees.

 

UK Government: Immigration Skills Charge
https://www.gov.uk/immigration-skills-charge
Detailed information on the Immigration Skills Charge, including when it applies and how much employers need to pay.

 

ACAS: UK Employment Law Overview
https://www.acas.org.uk/advice
Advisory, Conciliation and Arbitration Service (ACAS) provides detailed advice on employment laws in the UK, including the rights of sponsored workers.

 

Law Society: Find a Solicitor
https://solicitors.lawsociety.org.uk/
A tool to help businesses find qualified solicitors who specialise in immigration law and can assist with sponsor licence applications and compliance.

 

British Chambers of Commerce: Immigration Guidance
https://www.britishchambers.org.uk/page/workplace-immigration
Immigration resources and support for UK businesses provided by the British Chambers of Commerce, including sponsor licence advice.

 

Home Office Employer Checking Service
https://www.gov.uk/employee-immigration-employment-status
A service for employers to check if a potential employee has the right to work in the UK, essential for ensuring compliance.