Tier 2 Visa Sponsorship By Umbrella Company?

If you are an employment agency or umbrella company, you can apply for a Tier 2 visa sponsorship licence but only to sponsor migrant workers who will be directly employed by you in connection with the running of your business.

You cannot sponsor a migrant worker to supply them as labour to someone else, regardless of any genuine contractual arrangement between the parties. Only the company or organisation for whom the worker will be performing the work directly can sponsor that individual.

Under an umbrella arrangement the employer will be supplying the services of the worker to an agency or client, and will have reduced, if any, supervision and control over that worker and their performance. As such, an umbrella company will not be permitted to obtain a Tier 2 visa sponsorship licence on this basis.

Further, if you are a Tier 2 sponsor that wants to employ a skilled non-EEA migrant worker who has been supplied to you by an employment agency, or an intermediary, you can only assign a certificate of sponsorship to the migrant if:

• You have genuine responsibility for deciding all the duties, functions, outcomes or outputs of the job the migrant worker is doing
• You are responsible for agreeing and paying the migrant’s salary.

UK visa sponsorship rules

Strict rules apply for UK organisations sponsoring migrant workers.

If you are a UK employer looking to hire skilled migrant workers, you will need to apply for a Tier 2 visa sponsorship licence.

To enable you to employ a non-EEA skilled migrant worker in the UK, you will need to provide them with the offer of a suitable job, together with Tier 2 visa sponsorship. This is essentially the grant of a certificate of sponsorship that will allow a migrant worker to apply for a visa to legitimately work for you in the UK.

As a UK licensed sponsor, you can recruit skilled non-EEA migrants to fill jobs that cannot otherwise be filled by the domestic labour market.

A Tier 2 licence can also be used to facilitate other categories of skilled worker coming to the UK, including intra-company transferees, where existing employees are transferred to a UK branch of a multi-national organisation – as well as internationally established elite athletes or qualified coaches, and religious workers, looking to be based within the UK.

Risks for umbrella companies actings as sponsors 

In accordance with Home Office guidance, if you are an employment agency or intermediary, and you are granted a sponsor licence where it later materialises that the migrants you are sponsoring have been supplied as labour to a third party, your Tier 2 visa sponsorship licence will almost certainly be revoked.

In light of this guidance, any umbrella company offering sponsorship to Tier 2 visa holders, who then go on to work for another company or organisation in the UK, will almost certainly be construed as a deliberate attempt to disguise the way in which they operate. As such, any umbrella company visa sponsorship runs the risk of having sponsored assignments prematurely terminated.

For the client within this contractual arrangement, this would mean having to recruit replacement workers at short notice. For the migrant worker, even though they have themselves satisfied the Tier 2 visa requirements, unless an alternative visa route can be identified, they could be forced to leave the UK.

Requirements to applyfor a sponsorship licence

In circumstances where Tier 2 visa sponsorship is permitted, to be eligible to apply for a sponsor licence, you will still need to satisfy the following criteria:

• Prove that your company or organisation is genuine and operating lawfully in the UK.
• Be in a position to offer genuine employment that meets the Tier 2 skill and salary level as prescribed by the codes of practice for skilled work under Appendix J of the Immigration Rules.
• Prove that your company or organisation has adequate human resource systems in place to meet the Tier 2 sponsorship duties and obligations.
• Appoint key personnel on your Tier 2 sponsorship licence application that are honest, dependable and reliable, and do not present any threat to UK immigration control.

It is important to bear in mind that if your nominated personnel have a history of immigration violations or any unspent criminal convictions for a relevant offence, this could result in your sponsor licence application being denied.

To obtain a Tier 2 visa sponsorship licence an application must be submitted online via the government web portal. You must also submit the necessary documentation in support within five days of your initial application.

You will be required to provide various documents to support your eligibility as a Tier 2 visa sponsor. The Home Office may also carry out online verification checks, or possibly even undertake a site visit, to verify the suitability of your HR systems and key personnel, before granting you a sponsorship licence.

The nature of the documentation necessary to demonstrate that a company or organisation is genuine and operating lawfully will vary on a case-by-case basis. Typically, however, a minimum of four supporting documents will be required including, for example, evidence that the company has a current corporate bank account in the UK with a bank registered by the Financial Conduct Authority.

In the event that you fail to provide the correct documentation in support of your application, you run the risk of the grant of your licence being significantly delayed or even denied.

The cost involved in applying for a Tier 2 visa sponsorship licence will be £536 for a small business, ie; where the annual turnover is £10.2 million or less and there are 50 employees or fewer, or £1476 for a medium or large business. You will also be liable to pay a fee of £199 for every certificate of sponsorship issued, in addition to the Immigration Skills Charge.

Retaining the licence 

Having been granted a Tier 2 visa sponsorship licence, you will be given access to the Sponsor Management System (SMS) run by the Home Office. This is an online tool that allows UK sponsors to administer their day-to-day sponsor activities, including assigning certificates of sponsorship to prospective migrant workers.

In order to maintain your sponsor licence, you must continue to meet any duties and obligations associated with sponsoring a migrant worker, including:

• Keeping up-to-date records of all migrant workers
• Tracking and recording their attendance at work
• Reporting certain activities, such as non-attendance or non-compliance
• Cooperating with the Home Office, such as during site visits or in providing any additional documentation that may be requested
• 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.

If you fail to comply with your duties and obligations as a Tier 2 visa sponsor, this could result in your licence rating being downgraded, suspended or revoked.

It is also important to bear in mind that if you are an umbrella company, or other intermediary, that has deliberately obtained a Tier 2 visa sponsorship licence to supply migrant workers as labour to another company or organisation in the UK, you again run the risk of having your licence revoked.

In the event that you are facing an investigation by the Home Office, expert legal advice should be sought immediately from an immigration specialist.

Need assistance?

We are UK immigration law specialists with specific expertise in helping employers hire global talent. We can assist if you have any queries relating to the UK sponsorship licence rules and application process; speak to our experts today for advice.

Umbrella companies & visa sponsorship FAQs

Last updated: 6 March 2020