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Sponsor Licence Suspended? (Act Now!)

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If the Home Office considers your organisation has breached its immigration compliance duties, it may take the decision to suspend your sponsor licence. Your organisation could also see its license suspended if it is no longer eligible or suitable to hold a licence.

When a licence has been suspended, the Home Office can decide to either reinstate the licence or to revoke it. This outcome will depend on how you respond to the suspension notification.

If you receive notification that your organisation’s sponsorship licence is being suspended, you will need to act quickly to resolve the issues if you want to retain your status as a licensed sponsor.

If you fail to respond to the Home Office, you risk your licence being revoked, meaning you lose your permission to hire skilled workers. Given the current challenges in the talent market, retaining valued, skilled workers will be business-critical.

In this guide for sponsors, we explain what to do if your sponsor licence is being suspended. We consider the options open to you and the steps you can take to resolve compliance issues and regain your permission to sponsor skilled migrant workers.


What does a suspended sponsor licence mean for your organisation?

When you become a licensed sponsor, you are agreeing to meet all of the compliance duties under the UK visa sponsorship regime. The underlying principles are to help prevent abuse of the immigration system by capturing and retaining information relating to sponsored workers’ compliance with the Immigration Rules and their visa conditions.

The sponsor licence duties include:

  • Record-keeping of sponsored workers’ documentation, as required under Appendix D of the Immigration Rules.
  • Sponsored worker monitoring & reporting to Home Office eg significant changes to an employment contract, if the worker is absent without permission for more than 10 days.
  • Reporting organisational changes such as change of company address or Authorising Officer.
  • Complying with the prevention of illegal working regime by conducting Right to Work checks.
  • Cooperating and being responsive to the Home Office.


If the Home Office alleges you have breached any of these duties, you could be subject to a licence suspension.

The suspension will apply across all visa categories under your licence.

During the period of suspension, the organisation will not be able to assign any certificates of sponsorship and it will be prohibited from sponsoring new migrant workers.

Any CoS assigned prior to the suspension with an application pending will be put on hold until a decision is made by the Home Office on the suspension.

Your business will also be removed from the public register of sponsors for the duration of the suspension period.

You must continue to comply with all sponsor duties throughout the period of suspension.

If your licence is due to expire during this period, you must still apply for a renewal if you wish to retain the licence beyond its expiry date.


Impact of sponsor licence suspension on sponsored workers’ visas

A sponsor licence suspension will have the following impact on your workers:

Existing sponsored workers

Your existing sponsored workers’ leave will not be affected by the suspension, unless the Home Office decides to escalate the penalty to a licence revocation.

Should the Home Office decide to withdraw the suspension following your response, sponsored workers’ status will remain unchanged.

If existing sponsored workers are already in the UK and are awaiting a decision on a visa extension, their extension application will be placed on hold until a decision is made on the suspension.


New sponsored workers

Any new sponsored workers already in the UK who have not yet started work with you can begin working.

Any new sponsored workers who are overseas and have not yet started work but have a visa will be contacted by the Home Office directly.

New sponsored workers who are overseas and who are awaiting a decision on their visa will see their application put on hold until a decision is made on the suspension.


If the licence is revoked

If the Home Office decides to take further action by revoking the licence, all of the organisation’s CoS will be cancelled. This will mean you can no longer employ migrant employees. Your sponsored workers’ visas will be curtailed to 60 days, or however long they have left on the visa if less than 60 days. They must then leave the UK, unless they can secure permission under a different visa category.

In addition, any applications the organisation has pending with the Home Office would usually be refused.

This makes it all the more important to resolve – and not ignore – the suspension.


Options if your sponsor licence has been suspended

The first step is to consider your options and formulate a plan of action to avoid any detrimental impact on business operations and your employees’ visas.

Generally, your options are to either:

  • Respond to the letter challenging the allegations, with supporting evidence, and seeking to reinstate the licence.
  • Respond to the letter by accepting the allegations and identifying how you are addressing the breaches.


Following receipt of your response, the Home Office will investigate further before making a decision.

If the Home Office accepts your response and remedial actions, your licence should be reinstated, either as an A-rating or a B-rating.

If reinstated with a B-rating, the organisation will still have a lot of work to do to meet the required standards.

The Home Office will issue an action plan that must be followed to re-attain the A-rated sponsor status. You will be required to pay a fee for the action plan.

The contents of the action plan will depend on the nature of the breaches and you will need to evidence sufficient progress has been made within a specific timeframe, usually up to 3 months.

If you can show the organisation has followed the Home Office action plan, the licence will be upgraded to A-rating. If you fail to meet the action plan, the licence could be revoked.


What if you ignore the Home Office suspension notice?

Failure to engage with the Home Office in relation to any aspect of the sponsorship process will not be considered favourably.

If you do not respond to the suspension letter, or if you fail to respond in the required timeframe or refuse to engage actively with the Home Office through the suspension process, your licence could be revoked.


Should you accept the suspension?

There may be circumstances when challenging a suspension would not be the best course of action. For example, if the allegation is factually correct, a challenge to the decision may well incur unnecessary costs without real prospects of success.

If the allegations are true, your focus should be on remedial measures to rectify the breaches identified by the Home Office and to demonstrate you have taken action to prevent the issues from happening again.

Whatever the strategy, you will need to respond to the Home Office, addressing each point raised in the notice and providing evidence to support your case, within the stated timeframe.


Responding to a sponsor licence suspension letter

How you respond to the suspension notification will largely determine the outcome.

Fundamentally, you should act in full cooperation with the Home Office, as this will be beneficial in resolving the matter. Ignoring the notification or responding late can result in further enforcement action.

The suspension letter will advise the deadline for your response. In most cases, this will be 20 working days. You will be required to respond within this stated timeframe, or your licence may be revoked.

In practice, 2o days will be a tight timeframe in which to carry out the necessary investigations, collate evidence and prepare the response.

When considering your options to challenge a sponsor licence suspension, it will be important to address the reasons given by the Home Office for the suspension. The notification letter should detail the specific breaches under the terms of the licence and explaining the grounds for the suspension. Is there a factual error in these grounds, that can be challenged with supporting evidence? Are there measures you need to take to rectify the breach?

In general, these will relate to breaches of immigration compliance duties in areas such as record-keeping, reporting and employee monitoring.

Close analysis of this information will be critical to determining your next steps and your prospects of making a successful challenge.

If the decision was based on a factual error, you may be able to challenge the decision with supporting evidence or further explanation.

Proportionality may also be a concern. If the breach was relatively minor, yet you can show the impact of losing the licence would be devastating for the organisation, it could be argued that a licence suspension is a disproportionate and unjustifiable measure that should be overturned.

For example, if the loss of a sponsor licence will mean 20 sponsored workers lose their jobs, and the business is forced to close resulting in further job losses to the rest of the workforce, it could be argued that with corrective action and full cooperation with the Home Office, the licence should be reinstated on the basis of wider economic benefit.

If you have been asked to submit further information to the Home Office, ensure you comply.

Should any inconsistencies be identified in your documents, you will need to acknowledge this and explain the reasons for the discrepancies.

Decision-making time can vary depending on the size of your organisation, the number of sponsored workers you have and the complexity of the issues.


Addressing the grounds for suspension

An effective response will address each of the breaches that have been identified by the Home Office in the suspension letter.

These will be specific to your organisation and will require full consideration of the allegations. Taking expert advice will help you to fully assess and consider each of the allegations and how best to respond – both in terms of what remedial action needs to be taken to achieve compliance and what to say in your reply.

Below we consider some of the more common grounds for suspension, and outline what the Home Office is looking for in each area to meet the required standard.


Record keeping duties

Sponsor licence holders are under strict requirements to maintain certain records relating to their licence, organisation and sponsored workers.

You must maintain accurate and up-to-date contact details for any migrant worker that you sponsor, including their UK residential address and telephone number.

Importantly, you must keep these records for whichever of the following is longer:

  • one year from the day you stop sponsoring the worker; or
  • the date the documentation was reviewed and approved by a compliance officer, if your sponsorship of the immigrant ended less than a year ago.


If you sponsored the worker for less than a year, you must keep the paperwork for as long as the migrant is sponsored—whichever is longer—or until a compliance officer has looked through and approved them.

You should also retain the documents used as part of your sponsor licnec application for the duration of your licence’s validity.

You also have to keep copies of any documents to prove their entitlement to work in the UK and undertake the work in question.


Monitoring duties

Sponsors are required to keep track of their sponsored employees’ immigration status and report any changes to the Home Office. You also have to inform the Home Office of any suspicions or proof that an employee is failing to abide by the rules governing their stay in the UK.

You must also track and record employee attendance to ensure that any migrant worker is in fact complying with the terms of their visa.

You must also conduct regular right to work checks so as to monitor the immigration status of those that you sponsor, thereby helping to prevent illegal working.


Reporting duties

In addition to maintaining records, as a licensed sponsor you are under a strict duty to report certain matters to the Home Office about the migrant workers that you sponsor, such as regular non-attendance, non-compliance or disappearance.

The following must be reported on your Sponsorship Management System (SMS) within 10 days:

  • If a sponsored worker fails to show for their first day at work at your organisation
  • If a sponsored worker’s employment is terminated early.
  • If a sponsored worker has ten or more days of unauthorise absence from work.
  • If there are substantial changes to the terms of the sponsored worker’ contract of employment


The following changes to your circumstances must be reported within 20 days:

  • Change of address – if the company has relocated, the Home Office has to be notified. Remember that the Home Office can conduct unannounced compliance visits, meaning the contact information on the SMS must be up kept up to date.
  • Change of Authorising officer – while the AO may not be involved in the day to day administration of the licence, the AO is the Home Office’s primary point of contact with your organisation and you must ensure that the AO listed on the SMS is correct. It’s also imperative that there is always an Authorising Officer in place and included on the SMS. To maintain continuity of coverage, you must hire someone else to fill the function, even temporarily, if the present incumbent quits the company, moves abroad, takes a sabbatical or maternity leave.
  • Opening or closing a UK branch – because iformation about your UK branches is not stored on the SMS, sponsors may find it challenging to keep track of which addresses are included on the licence. The best way to make sure the licence is kept up to date is to keep accurate internal records and make sure they are updated each time a branch is opened or closed.
  • Establishing or closing an overseas branch, subsidiary company or linked company – similar to UK branches, foreign subsidiaries and branches cannot be viewed on the SMS, making it difficult to determine precisely which foreign businesses are covered by your licence. Best practice is to inform UKVI whenever a related entity is opened or shut down overseas. In any case, before you attempt to transfer an employee from that foreign company to the UK, you must have informed the Home Office. Scheduling Programming updates to UKVI every quarter, or yearly, as necessary, can help to assure compliance for organisations that are prodigious in forming new overseas branches or corporations.
  • Other significant changes to the company – significant organisational changes including takeovers, acquisitions, mergers, and TUPE transfers must be reported to UKVI, often within 28 days of the change taking place. Such changes will typically have complicated effects on your sponsor licence; for instance, you might need to file a new licence application within the allotted 28 days.

To avoid problems with your licence, we strongly advise seeking professional counsel as soon as possible about what is required.


Cooperating with the Home Office

Failing to respond to Home Office communications, or failing to meet their stated deadlines, will not be considered favourably when deciding on whether to resintate or revoke your licence.

You must comply with any requests for information or access to documents during a Home Office site visit, or otherwise. You must also act honestly and openly in any dealings with the Home Office.


Genuineness test

The Home Office will be looking to confirm that the roles being filled by sponsored migrant workers are genuine vacancies. Evidencing this continues to prove problematic for employers given the subjective nature of the test.

In particular, evidence will be needed that the job actually exists and that it has not just been created for the purpose of bringing a migrant worker to the UK. Proof will also be required that the job description is accurate and has not been misrepresented or exaggerated to meet the skill and salary level requirements.


Key personnel

Licensed sponsors are required to allocate certain responsibilities to key personnel within the organisation, some or all of whom will have access to the sponsor management system (SMS) to administer day-to-day sponsor activities including, for example, reporting any changes in the circumstances of an individual worker. The authorising officer is the person responsible for the activities of all SMS users and ensuring that your sponsorship duties are met. If either the authorising officer, or any system user, fails in their duties, the organisation remains strictly accountable to the Home Office.

You should always exercise a degree of caution and carry out any necessary background checks to ensure that the individuals who you chose to appoint as your key personnel are honest, dependable and reliable, and therefore are unlikely to represent a threat to immigration control.

Taking a proactive approach to immigration compliance and licence management – making licence compliance a part of your everyday operations and ensuring all key personnel are trained – is the most effective way to manage the risk of Home Office scrutiny and punitive action.


Salary issues

UK sponsor rules place requirements on the employer to pay sponsored workers appropriately.

When assigning a Certificate of Sponsorship to a sponsored worker, the sponsor has to include certain information about the salary that will be paid for the role. This information is used to confirm that the relevant minimum salary threshold and related pay requirements are being met. If this salary information is found to be incorrect and that the sponsored worker is not being paid in accordance with the requirements, the Home Office can take action against the employer while an investigation is undertaken.

The Home Office states it conducts regular checks with HMRC records to monitor pay activity, and it may also act on ‘tip-offs’ about certain sponsors.

In many cases, pay issues arise inadvertently, with the sponsor not being aware that certain changes affect the sponsorship conditions, for example, if there has been a reduction in the sponsored worker’s pay or if they have taken unpaid leave.


No longer eligible for sponsorship

If your organisation no longer qualifies or meets the eligibility or suitability requirements to be a licensed sponsor, the licence can be suspended.


If your suspension follows a compliance visit

Sponsor licence holders are subject to ongoing Home Office scrutiny, from the initial demands of the sponsor licence application process, to the day to day compliance duties as a sponsor licence holder and the renewal process after four years.

As such, licence holders should be prepared to be subject to a Home Office inspection at any time during the four-year lifespan of their licence.

Inspections are used to identify immigration breaches, for which the sponsor licence holder (and migrant workers) could face enforcement action.

It’s common for an inspection to be triggered when the employer is applying to renew their licence. The Home Office may also rely on intelligence, such as complaints from disgruntled former employees, as grounds to carry out an immigration inspection.

Importantly, sponsors should remember that visits can be unannounced.

Organisations should be sufficiently prepared for an inspection to evidence their track record in consistently meeting the required compliance standards and obligations, in order to safeguard the status of sponsor licence holder. This makes it advisable to ensure that immigration compliance is an everyday concern and that the organisation can prove that it is meeting its compliance obligations at any one time through effective processes, systems and documentation.

If the suspension is as a result of a compliance visit, you should request copies of the Home Office’s compliance report and all notes, documents and interview transcripts relating to the inspection.

Scrutinising the Home Office’s conduct in investigating your organisation and issuing the suspension can give rise to grounds for challenge if the Home Office failed to meet certain standards or to follow legal procedure, rendering any enforcement action unlawful. This requires specialist insight and expertise, which we can offer.


Additional penalties for immigration non-compliance

By law you are required to carry out right to work checks on all workers you employ – including sponsored workers – to ensure that they are legally entitled to work in the UK and undertake the work in question.

If migrant workers are found to be working illegally in circumstances where you have failed to carry out the prescribed document checks, you are at risk of a civil penalty of up to £20,000 per illegal worker, and even criminal prosecution potentially resulting in imprisonment or an unlimited fine.

Right to Work checks should form part of the pre-employment screening process, enabling you to meet your obligations to prevent illegal working. Right to Work checks can be conducted in one of three ways:

  • Manual document check, where you confirm the identity of the individual using certain acceptable, original form documents.
  • Online checks – where the individual has either s BRP or EU Settled Status and has provided you with their share code.
  • IDVT checks – using Identity Document Validation Technology through am identity service provider.


You must also conduct follow-up checks on workers that have time-limited permission to work in the UK, such as Skilled Worker visa holders, to verify their continued laful status and eligbility to work.


Manual right to work checks

The Home Office provides guidance for employers on jhow to conduct compliant Right to Work document checks. This involves three key stages:

Step 1: Obtain
Original documents must be obtained from either List A or List B of the recognised documents at Annex A.

Step 2 :Check
The authenticity of the documents and the identity of the person providing them, as well as their authorisation to perform the type of work you are offering, must be verified. You should check that:

  • Documents provided are authentic, undamaged and belong to the individual applying for the job.
  • Any inconsistencies in the stated name on the documents must be supported with additional evidence. For example, deed poll, original marriage certificate, divorce decree absolute. A copy of this supporting document should be made and retained.
  • Photographs and dates of birth match across documents with the individual’s appearance.
  • Visa expiry dates remain valid and have not passed.
  • Work authorisation extends to the type of work you are offering, for example, student visa holders are subject to limits on employment.


Step 3: Copy
Each document must be made into a clear copy that cannot be manually changed, and the copy must be securely stored, either electronically or in hardcopy. The date that you made the check must also be kept in a safe place. A date written on a copy of a document does not, by itself, guarantee that this is the actual date the check was performed. If a date is written on the copy of the document, you must also note that this was the date the check was done.

You have to make and retain copies of:

  • Passports: any page containing a visa or entry stamp as proof the holder has the right to enter or remain in the UK and perform the relevant work, as well as any page containing the holder’s nationality, date of birth, signature, immigration permission, expiration date, biometric information, and photograph. You no longer need to copy the front over of the passport.
  • The whole paperwork, containing an Application Registration Card and both sides of an Immigration Status Document.

For the duration of the worker’s employment and for two years after, any copies of papers taken must be stored safely. After then, the copy must be safely destroyed.


Need assistance?

Receiving a sponsor licence suspension notice from the Home Office is understandably a huge cause for concern.

Failure to address the Home Office’s allegations can result in revocation of your licence, meaning you can no longer lawfully employ sponsored workers and any existing sponsored employees will have to find alternative sponsored employment or leave the UK. The operational, financial and reputational implications can be devastating.

DavidsonMorris’ business immigration specialists are highly experienced in supporting sponsor licence holders facing a sponsor licence suspension. We have a dedicated team of sponsor licence lawyers who work with employers to resolve licence suspensions, dealing with the Home Office and advising on how to prevent future compliance issues from arising.

At the initial stage, we would review the facts of your case, including the alleged breaches as notified by the Home Office and your current general position to ascertain areas for challenge, such as weaknesses in the investigation process. We would then provide a recommended course of action, involving steps to address the cause of breaches and bring your systems and policies to requisite compliance standards. This could take one of many approaches, determined by the strength of your position and the case against you.

If you are dealing with a sponsor licence suspension, contact us to minimise the impact and disruption to your organisation of Home Office scrutiny.


Sponsor licence suspension FAQs

Why are sponsor licences suspended?

If the Home Office is not satisfied that your organisation meets the required standards, and that corrective action is required for you to maintain your ability to hire skilled non-EEA workers under the Tier 2 route, you may be subject to a licence suspension.

How long do you have to respond to a licence suspension?

The Home Office notification letter will state how long you have to respond. In most cases, you will need to respond within 20 days. Failure to meet the deadline could result in the licence being revoked.

Can you appeal a licence suspension?

Once notified of the licence suspension, the organisation must respond to UKVI within 20 days, providing any requested information and other supporting evidence as to why the suspension should be overturned.

Will a licence suspension affect visa workers?

Sponsored workers’ visas will not be affected until the Home Office has made a decision on the licence suspension. If the decision is to withdraw the suspension, their visas will remain unchanged. If the decision is to revoke the licence, their leave will be curtailed.

Last updated: 11 January 2023

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