News & Insights

How to apply for a sponsor licence

Employers not currently approved by the Home Office to be a sponsor should consider doing so now if they think they will want to sponsor skilled migrants, including from the EU.

1.1 What kind of sponsor licence?

There are a number of possible sponsor licences that a non-educational organisation can apply for, reflecting the different types of sponsored work visas:

Some of these licences can be applied for in conjunction with each other, using the same form and a similar bundle of supporting documents (for example, a Tier 2 General and Tier 2 Intra Company Transfer licence). Others, such as the sporting categories, have their own separate application process with bespoke criteria.

We will focus on the process for applying for a Tier 2 (General) licence. Tier 2 (General) is the visa route which skilled workers from beyond the EU currently have to rely on to find work in the UK, and which EU nationals will have to use as well now that free movement has ended.

1.2 What are the requirements to obtain a licence?

The Home Office’s Tiers 2 and 5: guidance for sponsors. Sections 1 to 10 of the guidance set out the process for applying for a sponsor licence.

These sections state that a sponsor must fulfil certain eligibility and suitability criteria to get their licence.

1.2.1 Eligibility criteria

The proposed sponsor must submit evidence to show that it is a genuine employer with a lawful trading presence in the UK.

1.2.2 Suitability criteria

The suitability criteria is a broader assessment. The Home Office will look at whether the organisation is “honest, dependable and reliable”, and capable of meeting the responsibilities that it expects from sponsors.

They will check that the sponsor:

  • Has the human resource and recruitment systems in place to meet — the Home Office may visit the sponsor for an assessment before or after the licence is granted
  • Is capable of complying with sponsor duties are may arrive unannounced at any physical addresses where the sponsored employees would work
  • Can offer a genuine vacancy which meets the criteria of the category of the visa and sponsor licence
  • Has nominated appropriate key personnel, who have no immigration offences
  • Does not have any previous non-compliance

The Home Office wants to be reassured that sponsors can live up to the “significant trust” that is placed in them when the licence is granted.

1.3 What documents do I need to submit?

1.3.1  To meet the general eligibility criteria

The sponsor must provide at least four documents with the application.

Appendix A sets out all possible documents required.

The average private limited company will normally have at least four of the following documents:

  • Evidence that the sponsor has coverage for employer’s liability insurance up to £5 million
  • Certificate of VAT registration
  • Evidence of registration as an employer with HM Revenue and Custom
  • Recent bank statement or a letter from the bank setting out dealings with the organisation
  • Proof of ownership or lease of the business premises

Until very recently, documents for a sponsor licence application had to be either originals or certified copies. The Home Office has relaxed this rule during the lockdown.  We are not yet aware if this practice can continue post COVID19.

1.3.2  Specific evidence required for Tier 2 (General)

The specific documents required for Tier 2 (General) licence are listed on page 6 of Appendix A.

In addition to some basic information about the organisation, the role they want to fill and the candidate they have in mind, the organisation must also tell the Home Office why they are applying for a licence. This usually involves providing evidence of the skill shortage they need to fill.

1.4  Key personnel for the licence

The Home Office also requires the organisation to nominate certain individuals to take on roles in respect of the sponsor licence.  The people nominated must be primarily based in the UK. The main roles are:

  • authorising officer – the most important of all the roles, this should be given to someone senior. Ideally it should be someone who has some involvement with recruitment and/or HR as they will be ultimately responsible for the licence and to ensure that the sponsor licence duties are met.
  • key contact – this person is the main point of contact with the Home Office. A legal representative can undertake this role.
  • level 1 user – responsible for all day-to-day management of the licence via access to an online portal, called the Sponsorship Management System (SMS). At the application stage this has to be an employee but once the licence is secured, others, including representatives, can be set up as level 1 users, or level 2 users who are able to undertake certain limited tasks on the SMS.

It is important to carefully consider whether anyone nominated has any criminal conduct or previous adverse involvement with the Home Office. Applications for sponsor licences can be refused due to the character and past behaviour of the key personnel. The Home Office can and will run its own checks on nominees.

1.5  What about the suitability criteria?

The Home Office will want to be sure that the organisation and the key personnel are bona fide.

Specifically, they will want to know that the organisation has the HR or recruitment systems in place to meet the sponsorship duties that an employer effectively signs up to when they become a sponsor.

1.5.1 Sponsorship duties

Sponsorship duties include reporting certain information about sponsored workers via the sponsorship management system. The report must be made within ten working days of the event occurring. Reportable events include a delay in a start date or change in work location for a Tier 2 worker.

They also include keeping detailed records on sponsored workers, such as contracts of employment, payment details and most importantly evidence where applicable of running the Resident Labour Market Test before hiring the person.

A sponsor will need to be prepped on what the duties are, what they entail and the consequences if they fail to adhere to them.

1.5.2 Compliance visits

Sponsors should be aware that the Home Office can visit them as part of the sponsor licence application process to check their systems are robust enough. This is the principal method by which the Home Office can assess the suitability criteria.

These compliance visits were pretty common a few years ago, particularly for start-ups, but have become rarer of late. They will usually occur if the application is deemed high risk in some way.

Even if they avoid a visit during the application process, a sponsor can be inspected by the Home Office at any point while they remain a sponsor licence holder.

During a visit the inspector will want to check the sponsor’s HR systems and speak to the authorising officer. They can also request to interview Tier 2 employees to ensure that the vacancy they have filled is a genuine one.

If the Home Office finds evidence that the employer is not meeting their duties, their licence can be suspended or even revoked, which means their sponsored workers will have their visas curtailed.

1.6  How do I submit the application?

The form is prepared and submitted online.

We as your legal representative can assist with the preparation but the application form must ultimately be submitted by the sponsor.

Once the online form is submitted, the fee is paid depending on the size of the organisation: £536 for a small/charity and £1,476 for a medium/large company.

A submission sheet is generated which previously had to be printed off and signed by the authorising officer. Due to the COVID-19 lockdown, the Home Office will now accept a pdf and a digital signature.

The submission sheet together with supporting evidence must be sent within five working days from the online submission.  This requirement has been relaxed in light of current circumstances.

1.7   When do I get a decision?

Decisions take around four to six weeks. The sponsor will be emailed with the result of the application.

If successful they will be granted a licence valid for four years from the date of decision. This will usually be an A-rated licence which means they will be granted access to the sponsor management system via login details for the nominated user. The organisation will then have the ability to start sponsoring workers.

If the application is refused, there is no right of appeal against this decision and a six-month cooling off period will kick in preventing the sponsor from making another application during this time period.

1.8  Changes following January 2021?

As we mentioned earlier, the new system that came into place from January 2021 saw significant changes to Tier 2.

The minimum skill level for sponsorship will be dropped from RQF level 6 to RQF level 3. This means that jobs which are considered to be A-level (or equivalent) standard can be sponsored, instead of the Bachelor’s degree qualifications which are required now.

The Resident Labour Market Test has also been removed.

Organisations who are likely to be sponsoring individuals at this lower skill level can apply now for a sponsor licence. The Home Office recently added guidance Annex 9 aimed at businesses that want to obtain a sponsor licence to recruit from January 2021.  The sponsor must meet all of the requirements as set out in this guidance, except the current requirement to offer employment at RQF6 or above.

1.9  What will happen in future?

As well as changes to the Tier 2 route, we are also expecting changes to the licensing process. The government wants to overhaul the sponsorship system and reduce the duties on sponsors, however, realistically, these are not expected for a couple of years.

Please note that applying for a sponsor licence can appear straight forward.  If the licence is refused, you will be unable to apply again for 6 months.

If you want to get it right first time, please contact the immigration team to assist with your application.