News & Insights

Sponsor licence – what you need to know?

Employers considering hiring someone from outside the UK, including the EU, will usually need a sponsor licence.

Since 31 December 2020, a sponsor licence is usually required when hiring someone from outside the UK, including the EU. This also includes temporary or unpaid work (e.g. charitable or religious organisations).

Certain groups do not require a sponsor. These include Irish citizens, those with status under the EU Settlement Scheme, graduates, family members of British citizens or those with indefinite leave to remain in the UK.

1. Different kinds of sponsor licences

Employers must decide what type of licence is required for their organisation and the types of vacant roles.   A ‘Worker licence’ is more suitable for longer term assignments with a route to settlement in the UK, whereas ‘Temporary workers’ are shorter term and will not lead to settlement.  Educational establishments who accept migrant students must also register for a sponsor licence, however, this note does not cover the student licence process.  There is the option to apply for a licence covering both types of workers provided the organisation is eligible.

Worker licence

Temporary Worker licence

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 Skilled worker and Intra Company Transfer licence). Others, such as the sporting categories, have their own separate application process with bespoke criteria.

Our focus will be on the process for a Skilled worker licence.

2. Eligibility and Suitability

The Home Office’s guidance for sponsors, has detailed requirements for employers. The Home office has also released a helpful Employer toolkit which can be downloaded from our website.

All potential sponsors must meet the eligibility and suitability criteria.

2.1 Eligibility

The proposed sponsor must submit evidence to show that it is a genuine employer with a lawful trading presence in the UK.  The evidence will normally be in the form of evidence of operation, including latest annual accounts, VAT registration, tax returns, bank statements together with evidence of lease for site…

2.2 Suitability

A suitability assessment determines whether the licence is granted or refused.  If it’s a licence renewal application, the assessment may also consider the existing rating of the sponsor or whether any immigration activity will affect the new licence.  If a sponsor receives a B rating, it may affect the Certificates of Sponsorship (CoS) that can be assigned. A licence cannot be obtained if an organisation had a sponsor licence revoked in 12 months prior to a new application. Therefore, it is crucial to ensure compliance.

Areas that will be assessed for suitability include:

  • Robust Human Resources and recruitment systems in place?
  • Home Office may visit the potential sponsor during the application process to ensure compliance with the sponsor duties?
  • The genuineness of the employment on offer, that meets the salary and skill-level?
  • Any criminal convictions or civil penalties?
  • Any evidence of previous non-compliance?

The Home Office wants to be reassured that sponsors can live up to the “significant trust” that is placed in them with the sponsorship regime.

3. Evidence

Organisations must provide at least four documents with the application (annual accounts are mandatory for most companies). The full list of proposed documents are set out in Appendix A.  The type of evidence varies according to the licence route and the type of organisation applying.

The most common documents to be included are:

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

When applying for a Skilled worker licence the organisation must provide some basic information about the organisation, the role they want to fill and the candidate for that role, in addition to telling the Home Office why they are applying for a licence. Quite often, the Home Office will expect some information about how the sponsor has tried to recruit for this role.

Due to COVID-19 the previous requirement to provide originals or certified copies has been relaxed. The relevant documentation can now be sent via email. We are not yet aware if this practice will continue post COVID-19.

4. Key personnel

The organisation must nominate key individuals to take on roles in respect of the sponsor licence.  The people nominated must be primarily based in the UK. Some or all of the key personnel will have access to an online portal, the sponsorship management system (SMS), after a licence is granted.

There are 4 roles:

  • authorising officer – this role should be the most senior person responsible for the recruitment of all migrant workers. They will be responsible for ensuring that all sponsor duties are met and accountable for any sanctions under the illegal working legislation.
  • key contact – is the main point of contact with the Home Office during the application stage. A legal representative can undertake this role.
  • level 1 user – responsible for all day-to-day management of the licence via the SMS. At the application stage this must be an employee/director. Once the licence is secured, others, including representatives, can be set up as level 1 users.

The same person can take on all three roles, however sponsors must always have a level 1 user who is engaged by the company.

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 for key personnel.

5. Sponsor duties

Sponsorship is deemed by the Home Office to be ‘a privilege not a right’. Sponsors are expected to play their part to ensure the immigration system is not abused.   Sponsor duties are a wide range of reporting, retention and updating responsibilities with time limitations which vary depending on the type of licence and the organisation status.

Some duties must be fulfilled by all licensed sponsors, while others are specific to those licensed under certain routes.

Duties include reporting certain information about their sponsored workers via the SMS, keeping records and complying with the immigration laws as well as the wider UK law and to behave in a manner that is consistent with the fundamental values and not detrimental to the wider public good.

Failing to comply with the sponsor duties can lead to reducing the CoS allocation, downgrade in the licence rating, suspension during the investigation, revocation of the sponsor licence, as well as being reported to the police or relevant authority.

6. Submission

The application form is prepared and submitted online with supporting evidence and additional information prepared in advance of the submission.

Your legal representative can assist with the preparation however, the application form must ultimately be submitted by the nominated authorising officer.  We normally organise video conference calls with screen sharing functionality to assist our clients with this process.

After submitting an application, a ‘submission sheet’ is generated which previously had to be printed off and signed by the authorising officer. Due to the COVID-19 pandemic, the Home Office will now accept copies with a digital signature of the authorising officer.

The submission sheet together with supporting evidence and additional information must be sent within five working days from the online submission by email.

The licence fee due depends on the size of the organisation: £536 for a small/charity and £1,476 for a medium/large company.  The fee must also be paid at the time of the online submission.

7. Decision

Decisions on licence applications take around eight weeks. The authorising officer will receive an email with the decision of the application.  (Priority services are available for an additional fee of £500 for a decision within 10 working days).

If successful, the sponsor will be granted a licence valid for four years from the date of decision. This will usually be an A-rated licence, which will enable the sponsor to assign CoS. The nominated level 1 user will be granted access to the SMS via login details sent to the authorising officer.

If an application is refused, there is no right of appeal against this decision. A request to review the application may be made if you can prove a mistake or supporting documents were not considered by the caseworker.

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, which is known as the cooling off period.

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