If you are looking to hire foreign skilled workers to work in the UK, you will first need to apply to the Home Office for a sponsorship licence.
Prior to the UK’s post-Brexit UK immigration reforms, the UK’s main visa route for skilled overseas workers was the Tier 2 visa. Under the old system, UK employers needed a Tier 2 sponsorship licence on order to sponsor these skilled workers.
The Skilled Worker route replaced the Tier 2 visa in December 2020, and a number of other sponsored work visas routes were subsequently introduced for specific types of skilled and temporary workers. The new rules mean employers must have a valid sponsorship licence specific to the type of workers they intend to employ.
In this guidance, we summarise the eligibility and licence application requirements for UK employers looking to hire under the Skilled Worker visa.
Sponsor guidance: sponsor licence application criteria
An application for a UK sponsorship licence will need to be made online, with any supporting documentation submitted within five working days of the form being submitted. Typically, you will need to provide at least four supporting documents so as to verify your organisation, although the documentary requirements can vary depending on the nature of your organisation and the vacancies you are looking to fill.
When making an application for a sponsorship licence, as a prospective licensed employer you must meet certain eligibility criteria. These include the following:
- You are a genuine organisation operating lawfully in the UK
- Your organisation is offering a genuine vacancy that meets the visa skill level and minimum appropriate rates of pay
- Your organisation has adequate HR systems in place to meet your ongoing sponsorship duties and obligations
- You have identified key personnel named on your licence application who are suitable to undertake the necessary sponsorship duties
Note that if your nominated personnel on your sponsorship licence application form have a history of immigration violations or any unspent criminal convictions, this could result in your application being denied.
In all cases, you will be required to provide documentary evidence to support your eligibility. The Home Office will also carry out online verification checks, or possibly even a site visit, to verify the suitability of your HR systems and key personnel, before granting you a sponsorship licence.
Issues or errors with your sponsor licence application can result in a refusal, which can have serious implications for businesses relying on talent from overseas. Taking professional advice can optimise your prospects of a successful licence application.
Sponsor licence application fees
The cost of applying for a sponsorship licence depends on the size of your organisation.
The fee for medium or large sponsors is currently £1,476, whilst the fee for small or charitable sponsors is set at £536.
The fee for the premium service can range from £8,000 per year for small, medium or charitable organisations to £25,000 per year for large organisations.
In addition, you will be liable to pay the Immigration Skills Charge each time you sponsor a migrant worker. This is currently set at £1,000 per employee per year, reduced to £364 for small or charitable organisations. This is on top of the fee required for every certificate of sponsorship that you assign under your licence.
Further costs will also be payable when, for example, assigning the Certificate of Sponsorship to the job applicant.
Sponsor guidance: appointing key personnel
UKVI requires every business applying for a sponsorship licence to nominate people to the following roles:
- Authorising Officer
- Key Contact
- Level 1 user
Once you have been granted a licence you can also choose to nominate individuals as Level 2 users.
Importantly, sponsors must have an Authorising Officer and at least one Level 1 user in place at all times. If a member of staff leaves and you fail to appoint someone else to the role, UKVI can choose to downgrade your licence (and charge you for the opportunity to upgrade it again) or even revoke your licence altogether.
It is also important to understand what these roles require, and who can (and critically cannot) be appointed.
The Authorising Officer will usually be UKVI’s first and primary point of contact with your organisation. They will receive e-mails concerning changes to sponsors’ duties, the need to renew Certificates of Sponsorship or the licence itself etc. They are also required to authorise most of the changes or updates you might make to your licence (e.g notifying UKVI that you’ve opened a new branch). They do this by signing the Submission Sheet that will be generated whenever you submit a notification of change via the Sponsorship Management System (SMS).
The Authorising Officer will not have automatic access to the SMS to carry out any of the practical functions relating to sponsoring migrant workers – unless you also choose to make them a Level 1 user.
When applying for a licence you must appoint an Authorising Officer. And you must have one at all times whilst you hold a licence. If you fail to have an Authorising Officer in place at any point, or have one who doesn’t meet UKVI requirements (e.g they’re not based in the UK) your licence can be suspended, downgraded or even revoked.
You must also report any changes to their contact details to UKVI, again if you fail to do this your licence can be affected.
When the Points Based System was first introduced the Home Office required the Authorising Officer to be a senior member of staff. In the seven years that the PBS system has been operating UKVI have recognised that it’s not helpful for them to have an Authorising Officer who is so senior in the company that they have no involvement with recruitment or immigration and therefore are unable to answer many of UKVI’s queries. Two years ago they therefore amended the requirement for new licence applicants, requiring their Authorising Officer to be the “most senior person responsible for the recruitment of all migrant workers and ensuring that sponsor duties are met”.
If there is more than one person who could fill this role, you can decide who to nominate. Whoever you nominate, you must be sure that they fully understand the importance of the role.
Other requirements for your Authorising Officer are that they must be:
- An employee or officer of the organisation
- Based in the UK
- Entitled to work in the UK (i.e they don’t have to be British as long as they have an appropriate immigration status that enables them to work)
- Free from criminal convictions
Your Key Contact is, as the name implies, the UKVI’s other main point of contact for the licence. The Home Office will contact them in the event that they have queries about your sponsor licence application, the documents submitted or the payment.
The Key Contact also does not have automatic access to the SMS. If they require access to
the system they will need to be set up as a level 1 or level 2 user.
When applying for a licence you must nominate a key contact. And you should have one at all times whilst you hold a licence.
Your Key Contact can be an employee or officer of the company, or a legal representative (as long as they are based in the UK.)
Level I user
Your Level 1 user(s) will usually be the person or people who are doing your day-to-day immigration work.
They have full access to the Sponsorship Management System (SMS), from which all functions of your licence are operated. That means they can:
- undertake routine sponsorship activities, including assigning Certificates of Sponsorship (CoS), reporting migrant activity and changes of circumstance, request CoS, apply for and assign restricted CoS
- view information about your licence, notify UKVI of changes to your organisation
- apply to renew your licence and track the progress of your application
You must always have at least one Level 1 user in place, who can access the SMS to carry out these tasks. In your sponsor application, you can only nominate one Level 1 user, and this person must be an employee. Once your licence has been granted you can appoint more Level 1 users, including your Representative or other members of staff. UKVI recommend that you keep numbers to the minimum necessary for effective business operation.
You can appoint any of the following as a Level 1 user:
- an employee or office holder
- your UK-based legal representative
- an employee of a 3rd party company or organisation if you contract out some or all of your HR functions to them.
Level 2 user
Level 2 users also have access to the SMS, but on a much more restricted basis. They can only:
- assign an Unrestricted CoS
- report migrant activity
- access your general licence information
- report any changes to the organisation
- request or assign a Restricted CoS
You can appoint as many level 2 users as you need once your licence is in place.
Eligibility requirements for key personnel
There are some requirements that all of your Key Personnel must meet. They must be:
- Based in the UK: For the duration of the period that they fill one of the Licence roles they must be permanently based in the UK. In other words, even if your UK company is a subsidiary or branch of an overseas company and your HR function is based outside the UK you must still appoint UK based personnel to fill the sponsor licence roles.
- Free from criminal convictions: UKVI will carry out checks on appointed Authorising Officers, Key Contacts and Level 1 users for unspent criminal convictions at the time of your licence application, and can check at any point after that during the life of your licence.
- In most cases a paid member of staff or an office holder: Office holders include the Company Secretary, Directors and owners of the company.
None of your Key Personnel can be:
- A representative who is not based in the UK
- A contractor or consultant who is contracted for a specific project
- Subject to a Bankruptcy Restriction Order, or Undertaking
- Subject to a Debt Relief Restriction Order, or Undertaking
- Legally prohibited from being a company director
UKVI may refuse an application where any of the key personnel were involved with a sponsor whose licence has been revoked within the last 12 months.
Key personnel compliance issues
Up-to-date contact details
You must provide contact details for all Key Personnel at the time of your licence application and if any changes occur subsequently. The contact address given for each of your Key Personnel must be either:
- your main address
- a branch or head office included in your licence
- your Representative’s business address
If your organisation moves location you must update the contact details for your Key Personnel, as well as updating the licence address itself.
Secure e-mail and passwords
All email addresses you provide for Key Personnel must be secure, personal to and only accessible by the named individual. The log-in details sent to each of your Level 1 Users are also specific for each individual and must not be used by others, or even accessible to them. UKVI may suspend a licence where they identify a breach of either of these rules and we are increasingly hearing of cases where this has happened.
Assigning a CoS
Your Level 1 or Level 2 users must not assign a Certificate of Sponsorship to themselves or assign a CoS to a close relative or partner (including husband, wife, civil partner or unmarried partner, parent, child or sibling.)
You must have a minimum of one Level 1 user who is a settled worker. The only exceptions to this rule are if your Authorising Officer has valid leave as a:
- Representative of an Overseas Business
- Tier 1 (Graduate Entrepreneur) migrant
- Tier 1 (Entrepreneur) migrant
Sponsor guidance: assigning Certificates of sponsorship
If your application is successful you will be granted a sponsorship licence with an “A” licence rating. This will allow you to assign certificates of sponsorship to each foreign worker you employ. These are electronic documents, each containing a unique reference number.
This reference number is required for each individual to make their individual visa application to the Home Office for entry clearance.
Sponsor guidance: your compliance responsibilities
If your sponsor licence application is successful, as a licensed sponsor, you agree to meet all of the duties and obligations associated with sponsoring a migrant.
In particular, you are under a duty to ensure compliance with the immigration rules and prevent abuse of the system. This includes the following:
- Keeping up-to-date records of all foreign workers
- Tracking and recording employee attendance
- Reporting certain employee activities, such as non-attendance or non-compliance
- Cooperating with the Home Office, such as during site visits
- Complying with the law, such as carrying out right to work checks on employees to ensure that they are entitled to be in the UK and undertake the work in question.
You will be given access to the Sponsor Management System (SMS), an online tool to be used to administer your day-to-day sponsor activities, such as assigning certificates of sponsorship. It will also allow you to report any changes in the circumstances – of an individual worker or organisational – to the Home Office. Failure to will be deemed a breach of your duties.
Any failure to comply with your duties could result in your licence rating being downgraded, or even your licence being suspended or revoked. If your licence rating is downgraded, you will be required to pay for an action plan at a cost of £1,476 to help you reinstate your “A” licence rating.
Sponsorship licence applications are at risk of refusal for errors and omissions that could be avoided with sponsor guidance. From ascertaining eligibility, through to advice on company structure, sponsored roles and salary levels and compiling your supporting documents, the sponsor licence specialists at DavidsonMorris can help.
For advice with your sponsor licence, contact us.
Sponsor guidance FAQs
What is a Tier 2 certificate of sponsorship?
A certificate of sponsorship is a unique reference number assigned by a UK sponsor holder to a sponsored worker that they are looking to employ under a sponsored work visa route. Sponsored workers must have a valid certificate of sponsorship in order to make their visa application to the Home Office.
Which documents are needed for the sponsor licence application?
The sponsor licence supporting documents you will need to provide vary depending on the type of organisation you are such as a private company, charity, ‘start up’ or public body, but invariably will be extensive to ensure you are fully evidencing your eligibility. The full lists of the current sponsor licence supporting documents are available on the Home Office’s Appendix A- List of documents. Given the scope for error and the organisational importance of getting the application right first time, seeking professional advice can help you ensure you are collating the correct documentation for your organisation’s application.
What are the responsibilities of the Tier 2 sponsor?
Sponsor licence holders must meet a number of ongoing compliance duties. These include record keeping, monitoring visa workers, notifying the Home Office of relevant changes in circumstances affecting their organisation and their sponsored visa workers and cooperating with the Home Office.
How long does a sponsor licence last?
Sponsorship licences are issued for a period of four years. To continue to sponsor migrant workers beyond this date, you will need to apply to renew your licence before it expires. Failure to maintain the validity of your licence can result in Home Office enforcement action against your organisation and result in curtailment of your migrant workers’ visas.
How do I renew my sponsorship licence?
You have to apply to the Home Office to renew your licence. As part of the process, you will need to show that your organisation has complied with its duties and will continue to maintain compliant immigration practices. It is common for the Home Office to arrange a site inspection as part of your renewal application.
Why was our sponsor licence application refused?
The Home Office can refuse licence applications for many reasons. This could include failure to complete the application form fully and correctly, failure to provide the required supporting documentation or failure to evidence your organisation’s ability to comply with the licence compliance duties. If your licence application has been refused, take advice on the options open to you to help avoid missing out on a key candidate.
Why choose DavidsonMorris?
As a team of dedicated UK immigration lawyers, we have extensive experience of helping employers of all sizes through the complexities of the sponsor licence application process. We also provide ongoing support with compliance and meeting licence duties to manage the risk of non-compliance and ensure effective preparation for the renewal application.
Last updated: 7 April 2023