The United Kingdom’s immigration framework enables foreign workers and students to enter the country for work or study, provided they have secured a sponsor. The sponsor licence is a critical mechanism for UK employers and educational institutions to legally recruit non-UK residents. This article explores what a UK sponsorship licence is, its purpose, the application process, and key compliance requirements.
Understanding the UK Sponsorship Licence
A UK sponsor licence is an official authorization granted by the UK Visas and Immigration (UKVI), a division of the Home Office, allowing businesses, sole traders, or individuals to sponsor non-UK residents for work or study. With this licence, sponsors can issue Certificates of Sponsorship (CoS), enabling foreign nationals to apply for specific visas, such as Skilled Worker, Temporary Worker, or Student visas.
Sponsors are obligated to adhere to strict immigration regulations and may face inspections by the Home Office. Non-compliance can result in fines, licence downgrading, or revocation, which could impact sponsored employees, requiring them to find a new sponsor or leave the UK.
Since January 1, 2021, EEA and Swiss citizens are also subject to these sponsorship requirements, aligning their status with other non-UK nationals.
Purpose of the Sponsorship Licence System
The sponsorship system ensures legal immigration and compliance with UK immigration laws. It holds sponsors accountable for supporting foreign employees or students, including issuing CoS and ensuring minimum salary requirements are met. However, a sponsor licence or CoS does not guarantee visa approval, as the Home Office conducts additional checks.
Types of Sponsorship Licences
Sponsorship licences are categorized based on the type of workers or students being sponsored:
- Worker Licence : For long-term roles, such as Skilled Worker visas, intra-company transfers, sportspeople, or ministers of religion.
- Temporary Worker Licence : For short-term roles, including seasonal workers, charity volunteers, artists, or professionals attending conferences or exchanging expertise.
- Combined Licence : Allows sponsoring both long-term and temporary workers.
Sponsors are further classified by size:
- Small Sponsors : Companies with an annual turnover below £10.2 million, assets under £5.1 million, or fewer than 50 employees (meeting at least two criteria).
- Medium/Large Sponsors : Companies exceeding these thresholds.
Licences are rated as A-rated (fully compliant) or B-rated (downgraded due to minor violations, limiting the ability to issue new CoS).
Eligibility Requirements for Sponsors
To qualify for a sponsor licence , applicants must meet stringent criteria:
- Legal Registration : The business must be registered in the UK (e.g., with Companies House for limited companies) and operate legally.
- UK Operations : The business must primarily operate in the UK, with evidence of a physical or virtual presence.
- Genuine Job Offer : The role offered to a foreign national must be genuine, listed on the UK’s shortage occupation list, or justified by business needs.
- Robust HR Systems : Sponsors must have HR and recruitment systems to manage sponsorship duties, subject to Home Office inspections.
- Clean Records : The company, its owners, and key personnel must have no significant criminal or immigration violations.
- No Prior Revocations : Applicants cannot have had a licence revoked due to systematic immigration breaches.
- Necessary Permits : Any required operational permits must be in place.
The Genuineness Test
The Home Office conducts a genuineness test to verify the legitimacy of the business and the need for foreign workers. This test assesses:
- The relevance of the job to the business’s operations.
- The qualifications and experience of the foreign worker.
- The economic justification for hiring non-UK talent.
The test may occur during the application process, Home Office inspections, or when issuing CoS. Failure to provide sufficient evidence can lead to application rejection or licence suspension.
Application Process
Applying for a sponsor licence involves several steps:
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Preparation
: Engage an immigration advisor to ensure compliance and gather required documents, including:
- Corporate bank account statements (last six months).
- Office lease or purchase agreement.
- HMRC registration.
- Audited financial accounts for the past year.
- Online Application : Submit the application via the UKVI’s Sponsorship Management System (SMS), specifying the number of undefined CoS needed.
- Fee Payment : Fees range from £536 for small sponsors to £1,476 for medium/large sponsors. Additional fees may apply for Worker Licences.
- Home Office Review : The Home Office may conduct site visits to verify operations. Processing typically takes eight weeks, or two weeks with expedited processing.
Upon approval, the sponsor receives an A-rated licence and access to the SMS to manage CoS issuance.
Sponsorship Management System (SMS)
The SMS is a digital platform for managing sponsorship duties. Key roles include:
- Authorising Officer : Oversees compliance with licence objectives.
- Key Contact : Liaises with the Home Office.
- Level 1 User : Manages the licence and CoS issuance.
- Level 2 User (optional): Has limited SMS access.
These roles must be filled by UK-based employees with clean records and no major shareholding in a previously revoked sponsor company. All roles can be performed by one person if needed.
Certificates of Sponsorship (CoS)
A CoS is an electronic document issued via the SMS, required for a foreign national’s visa application. There are two types:
- Defined CoS : For workers outside the UK, requiring Home Office approval.
- Undefined CoS : For workers already in the UK switching to a work visa, issued from a pre-allocated pool.
Sponsors must request a sufficient number of undefined CoS during the application process, valid until April 5 of the following year. Additional CoS can be requested via the SMS if needed.
CoS Issuance Rules
- Sponsors must issue the correct CoS type to avoid fines.
- The CoS must be included in the visa application within three months of issuance and before the job’s start date.
- Incorrect CoS issuance is a serious violation, potentially leading to licence downgrading.
Sponsor Responsibilities
Sponsors must maintain compliance with Home Office requirements, including:
- Record Keeping : Retain detailed records of sponsored employees, including passports, biometric residence cards, employment contracts, and immigration status.
-
Monitoring and Reporting
: Report within 10 days if a sponsored employee:
- Fails to start work.
- Is absent without reason for over 10 days.
- Is terminated early.
- Changes immigration status.
- Absence Monitoring : Track all absences, including sick leave and business trips.
- Change Notifications : Inform the Home Office of changes in key personnel, company address, or related subsidiaries.
Minimum Pay Requirements
Sponsors must pay sponsored employees at least the minimum salary set by the Home Office, which varies by occupation and experience:
- General Minimum : £26,200 per year or £10.75 per hour, or the occupation-specific rate (whichever is higher).
- New Entrants : Employees under 26 or with less than three years’ experience may qualify for reduced rates (minimum £20,480 per year).
- Exceptions : Lower rates apply for STEM degree holders, shortage occupation roles, or doctorate holders.
Precise salary calculations can be complex, and professional advice is recommended.
Requirements for Skilled Worker Visa Applicants
Applicants for Skilled Worker visas must score 70 points under the UK’s points-based system, based on:
- Sponsorship by a licensed employer (20 points).
- Relevant professional experience (20 points).
- English language proficiency (10 points).
- Additional qualifications, salary, or shortage occupation status (20 points).
Not all occupations qualify, and applicants must meet job-specific criteria.
Licence Ratings and Compliance
An A-rated licence allows full sponsorship privileges. A B-rated licence, issued due to minor violations (e.g., underpaying employees), restricts new CoS issuance. Sponsors with a B-rated licence must:
- Contact the Home Office within 10 days to obtain an action plan.
- Pay for the plan and implement corrective measures.
Failure to comply risks licence revocation. A revoked licence bars reapplication for 12 months, and sponsors can only be downgraded twice in four years before revocation.
Why Work with Immigration Advisors?
Navigating the sponsor licence process can be complex. Professional advisors, such as those at Imperial & Legal, offer:
- Expert guidance on eligibility and documentation.
- Training for SMS roles.
- Support during Home Office inspections.
- Assistance with CoS issuance and compliance.
With expert support, businesses can secure a licence in as little as one month, ensuring compliance and operational efficiency.
Conclusion
A UK sponsor licence is essential for businesses seeking to hire or sponsor non-UK talent. By understanding the types of licences, eligibility criteria, and compliance obligations, prospective sponsors can successfully navigate the process. Engaging experienced immigration advisors simplifies the application, minimizes risks, and ensures adherence to Home Office regulations, enabling businesses to focus on growth while supporting global talent.