Sponsor licence guidance for employers
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.
To employ skilled workers from overseas, UK employers must first apply to UKVI for a sponsor licence.
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.
If your organisation is preparing to make a licence application, read our guide for employers, with help and advice on licence eligibility, costs and processing times.
Sponsor licence guidance stage 1: eligibility requirements
As an initial phase in your licence application, you will have to satisfy certain informational requirements. These are necessary to verify that you meet the eligibility criteria for:
- Being a legally operating business in the UK
- Having HR systems effective in managing all the sponsorship duties
- Recruiting for eligible roles that meet the salary and skill requirements
- Having nominated key personnel that meet the suitability requirements
There are a number of company-related documents which will need to be collated and submitted to evidence that you are a genuine organisation.
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.
We can advise on the full extent of documentation requirements specific to your organisation.
Sponsor licence guidance stage 2: making your business case
In addition to the company information, you will be required to present a business case to UKVI illustrating why you are seeking to secure a sponsor licence.
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 which 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, UKVI 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:
- That the role meets the requirements of the category.
- That the role ‘fits’ with your organisation. In other words that it seems reasonable that a business or organisation of your type, operating in your sector, should need that ‘kind’ of role.
- 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 requirements of the Tier 2 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, 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 then they will make the same assessment as to whether this 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.
Sponsor licence guidance stage 3: employment considerations
In your licence application you will also need to evidence that your organisation is compliant with employment law. One common area of risk for employers is compliance with the April 2020 changes in employment legislation, which (among other changes) related to ensuring all new workers have a written statement of employment from their first day of employment.
Reviewing the employment documentation in advance of the application will ensure any issues are addressed and you are fully compliant.
Sponsor licence guidance stage 4: sponsor licence application costs
Before your application will be considered, you will need to pay the relevant application fee. There are two levels of fee:
- For smaller companies and charities: £536
- For larger companies: £1,476
The definition of ‘smaller’ company is taken from the Companies Act 2006, whereby at least two of the following must be met:
- The company must have a turnover of no more than £10.2 million.
- The company must have a balance sheet total of no more than £5.1 million.
- There must be no more than 50 employees.
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) and also pay each time it issues a CoS, which is currently £199.
Sponsor licence guidance stage 5: sponsor licence processing times
According to Home Office figures, 8 out of 10 applications are processed within less than 8 weeks.
Applicants may also pay an additional £500 to use the Sponsor Licence Application Priority Service for fast-tracked processing.
COVID has impacted processing times, and applicants are recommended to advice on current timescales to ensure alignment with the recruitment of sponsored workers.
Sponsor licence guidance stage 6: ongoing licence management
UKVI will consider your application on the basis of your submission and supporting documentation. In addition, they will also assess your organisation’s ability to comply in full with their regulations over the four years the licence is live.
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.
UKVI may also conduct a pre-licence application site inspection, to determine whether you meet the requirements and will be granted the licence.
If you are successful in your application, you will be under a duty to meet all aspects of sponsor licence compliance on an ongoing basis, including assigning Certificates of Sponsorship when you are recruiting, and renewing the licence after four years.
Should you wish to renew your licence after the four years, in addition to the renewal application documentation, you should also expect to be visited and audited by UKVI who will be looking to ensure you have operated in line with your duties.
As part of your application, a mock audit and review of your immigration documentation and processes will be a beneficial exercise in identifying areas of weakness and non-compliance, providing recommendations to ensure you meet your duties as a sponsor licence holder throughout the life of the licence.
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.
If you have a query about a sponsor licence application or require any form of sponsor licence guidance, please contact us.
Sponsor licence guidance FAQs
What is a sponsor license?
UK employers will need to apply for a sponsor licence to hire foreign workers. From 1 January 2021, this will include EU workers coming to the UK.
How can I get sponsorship license in UK?
An organisation has to apply to the Home Office for a skilled worker sponsor licence to be able to hire foreign workers in the UK.
How long does it take to get sponsorship licence UK?
Sponsor licence applications can typically take 8-10 weeks for the Home Office to process. The decision may take longer if you are subject to a compliance visit.
Last updated: 30 October 2020