UK Sponsor Licence Guide: Eligibility Criteria, Application and Licence Management

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The following guide offers detailed insights into the requirements, application procedures, management and renewal of the UK sponsor licence. In the case of application refusal, we provide an analysis of possible causes and advice on enhancing future applications.

In the United Kingdom, companies and institutions aiming to hire workers from outside the European Economic Area under the Tier 2 and Tier 5 visa categories must secure a sponsor licence

Educational institutions, including universities, should secure this licence from the Home Office to recruit international students.

The need for a sponsor licence applies to unpaid roles as well, such as charity work. However, you do not need a licence to sponsor some groups, for example:

• Irish citizens
• those with settled or pre-settled status under the EU Settlement Scheme
• those with indefinite leave to remain in the UK

Validity

Sponsor licences are valid for four years, after which employers must reapply for an extension. Obtaining and maintaining a sponsor licence requires employers to commit to strict guidelines for compliance. The rules include the necessity for efficient and effective HR processes that align with the standards set by the Home Office.

Types of UK Sponsor Licences for employers

Choosing the right sponsor licence in the UK depends on the employment type for foreign workers you intend to hire. There are two primary categories: ‘Workers’ for skilled, long-term or permanent roles, and ‘Temporary workers’ for specific, short-term positions. You can opt for a licence that covers either or both categories.

‘Worker’ Licence

For ‘Worker’ licences, there are several subdivisions:

1. Skilled Worker: This licence is for roles meeting job suitability criteria.
2. Senior or Specialist Worker visa (Global Business Mobility): For established employees of multinational companies transferring to the UK, previously under the Intra-company Transfer visa.
3. Minister of Religion: Aimed at individuals joining a religious organisation.
4. International Sportsperson: For top-level sportspeople and coaches.

‘Temporary Worker’ licence

The ‘Temporary Worker’ licence, on the other hand, caters to temporary employment, including volunteering and job-shadowing, in specific sectors:

1. Scale-up Worker: For those joining fast-growing UK businesses.
2. Creative Worker: For roles in the creative industry, like entertainers or artists.
3. Charity Worker: For unpaid workers in a charity.
4. Religious Worker: For individuals working with religious orders or organisations.
5. Government Authorised Exchange: Includes work experience, research projects, or training roles.
6. International Agreement: For roles covered by international law, such as employees of foreign governments.
7. Graduate Trainee (Global Business Mobility): For graduate training program participants.
8. Service Supplier (Global Business Mobility): For contract-based service providers to UK companies.
9. UK Expansion Worker (Global Business Mobility): For setting up a branch or subsidiary of an overseas business.
10. Secondment Worker (Global Business Mobility): For employees transferring from overseas under a high-value contract.
11. Seasonal Worker: For agricultural roles, like fruit and vegetable picking, or poultry work ?/during specific periods

The Scale-up Sponsor Licence

The Scale-up sponsor licence in the UK supports rapidly growing businesses by enabling them to recruit talented individuals from overseas. This licence is particularly relevant for businesses experiencing significant growth, allowing them to add skilled personnel essential for their expansion.

Definition of a Qualifying Scale-up Sponsor

There are two pathways to qualify as a Scale-up sponsor:

1. Standard Pathway: This is assessed automatically based on the business’s employment growth and/or turnover growth, as reported to HM Revenue & Customs (HMRC).
2. Endorsing Body Pathway: An approved endorsing body confirms the business’s eligibility to apply for a sponsor licence.

The overseas workers, including those who came to the UK from the EU, Iceland, Liechtenstein, Norway, and Switzerland after  31st December 2020, need Certificates of Sponsorship (CoS). If the UK company possesses the sponsor licence, it may issue CoS to foreign workers residing inside or outside the UK so they can apply for a work visa, such as a Skilled Worker Visa.

Note that sponsoring a worker does not assure their visa approval for working in the UK.

What is CoS number

A sponsor licence number is an exclusive identifier found on a Certificate of Sponsorship (CoS), which is necessary for overseas workers when they apply for a work visa. This electronic document details the job offer, specifying the job type and how long the employment will last.

Someone appointed in your organisation can request a CoS through the Sponsorship Management System (SMS). If the Home Office approves it, usually within a day, the CoS is then provided to the foreign worker as evidence of their job offer, enabling them to proceed with their work visa application.

The cost of a CoS ranges from £25 to £239, based on the licence type.

There are two kinds of CoS:

• Defined CoS: For Skilled Worker visa applicants outside the UK. Companies must first obtain a defined CoS to assign it to a skilled worker.
• Undefined CoS: For individuals switching to a Skilled Worker visa within the UK or for other types of visas, irrespective of the application location. Companies estimate their first-year needs for Undefined CoS, which can be assigned to sponsored workers repeatedly without needing a new application each time.

UK Sponsor Licence Eligibility & Requirements

The UK Home Office sets strict requirements for companies to qualify for a sponsorship licence. Although there is no minimum or maximum size requirement for a company, the UK business still must meet the list of eligibility criteria for the licence category they chose to apply for. Failure to confirm the criteria will result in the rejection of a sponsorship licence from the Home Office.

General eligibility and suitability requirements for obtaining the UK sponsorship licence:

1. Legitimate and Lawful UK Operation: Your business must be legally established and operating in the UK. For instance, a limited liability company should be registered with Companies House. There’s no specific requirement for the duration of your business operation. However, you must employ at least one UK resident as an employee responsible for liaising with the Home Office regarding sponsorship matters.
2. Presence in the UK: Your business activities must be primarily based in the UK. Applications from non-UK-based entities are automatically dismissed. Companies operating remotely or using a virtual office model are eligible, provided they present compelling evidence of their UK operations and ability to meet sponsorship obligations.
3. Reliable HR Systems: You should have a capable HR management system to efficiently manage your responsibilities as a sponsor on an ongoing basis. Home Office inspectors may conduct visits before and after issuing the licence to ensure compliance.
4. Dependable Personnel: The business, including its owners, directors, and personnel, should have no history of immigration or criminal offences, particularly concerning fraud and money laundering, to ensure that they are trustworthy and reliable in managing sponsorship duties.

For specific types of sponsor licences, like the UK Expansion Worker sponsorship, businesses are required to have a UK presence but not an active trading presence.

New startups can apply for a sponsor licence, but those operating for less than 18 months must provide additional evidence such as a corporate bank account with a UK bank registered with FCA and PRA.

You may not get a licence as an employer if you possess criminal convictions for immigration-related law breaches, fraud, and money laundering. You also will not be able to obtain the licence if you had your licence declared void in the past year.

Confirming job authenticity

To obtain a sponsor licence in the UK, your business must also demonstrate to the Home Office that the role offered to an international specialist is legitimate:

• The job must fall under an occupation in demand, as per the shortage occupation list on the official government website;
• The international worker’s qualifications should align with your business’s scale and needs. There needs to be a genuine necessity for employing an international specialist for a specific role within your organisational and operational field, and the candidate must satisfy the job’s requirements;
• If you have already selected a candidate for the role, ensure that the international worker’s prior work and/or educational background matches the job.

The business should comply with these criteria not just during the application but throughout the licence’s validity. Compliance officers may visit after the licence is granted to ensure ongoing adherence to sponsorship duties. Non-compliance or threats to immigration control can lead to the revocation of the licence.

Applicants for a UK Skilled Worker visa might also undergo additional verification if there are concerns about the job’s authenticity. The Home Office may ask the international worker for further proof within 28 days or to participate in a face-to-face interview. During this interview, the Home Office official will assess:

• The relevance of the applicant’s educational background and work experience to the job offer;
• The applicant’s familiarity with the inviting UK company;
• The conditions of the applicant’s prospective employment in the UK.

While such extensive checks are typically not routine, the UKVI pays particular attention to sectors deemed high-risk. These high-risk sectors are not explicitly defined in guidance for Home Office caseworkers.

Personnel requirements

When applying for a UK sponsorship licence, you must designate individuals within your organisation to oversee the sponsorship process effectively. These individuals will primarily use the Sponsorship Management System (SMS) to manage the licence.

The roles required include:

1. Authorising Officer: This senior, competent person is accountable for the actions of staff and representatives using the SMS.
2. Key Contact: Acts as the main point of communication with UK Visas and Immigration (UKVI).
3. Level 1 User: Handles the day-to-day management of the licence using the SMS.

These roles can be filled by the same individual or by different members of your team. Additionally, after obtaining your licence, you have the option to appoint a Level 2 user, who has more limited access compared to a Level 1 user, such as being unable to withdraw a certificate of sponsorship.

Application Process

To apply for a sponsorship licence, businesses and organisations must undertake the following process:

1. Identify Licence Categories/Tiers: Determine the categories or tiers to be included in the licence.
2. Evaluate Eligibility and Suitability: Assess the business’s eligibility for each chosen category or tier, ensuring necessary adjustments are made to HR systems.
3. Select Key Personnel: Designate individuals for essential roles, including the Authorising Officer, Key Contact, and Level 1 and Level 2 users of the Sponsor Management System (SMS).
4. Gather Necessary Documents: Assemble all required documentation for the application.

Appendix A of the Home Office lists potential documents that may be required, such as:

• evidence of a genuine and active business;
• contracts;
• corporate bank account proof;
• VAT registration;
• Franchise Agreement;
• etc.

Public bodies or companies listed on the London Stock Exchange Main Market might need fewer than four documents.

Additional documents might include an organisation hierarchy chart, an employer’s liability insurance certificate, evidence of listing on various stock exchanges, and tax returns.

5. Decide on Certificates of Sponsorship (CoS): Determine the number of CoS needed for the first year of the licence.
6. Submit Online Application and Supporting Documents: Complete the online application and forward the submission sheet and any requested supporting documents to the Home Office. This includes affidavits or statutory declarations, which must be witnessed by a qualified, independent person such as a solicitor, Notary Public, or Commissioner for Oaths. In Scotland, a Councillor can serve as a witness.
7. Prepare for Home Office Visit: If applicable, ready the organisation for a potential site visit from Home Office officials.
8. Finalise Application and Await Decision: Await the Home Office’s decision on the application.

UK Sponsor Licence fees structure

Fees vary based on the licence type and the organisation’s size, with specific amounts for different sponsor categories:

Licence Type and Fees:

Worker Licence:

• Small or Charitable Sponsors Fee: £536
• Medium or Large Sponsors Fee: £1,476

Temporary Worker Licence:

• Small or Charitable Sponsors Fee: £536
• Medium or Large Sponsors Fee: £536

Worker and Temporary Worker Licence:

• Small or Charitable Sponsors Fee: £536
• Medium or Large Sponsors Fee: £1,476

Incorporate a Worker Licence into an Existing Temporary Worker Licence:

• Small or Charitable Sponsors Fee: No fees
• Medium or Large Sponsors Fee: £940

Incorporate a Temporary Worker Licence into an Existing Worker Licence:

• Small or Charitable Sponsors Fee: No fees
• Medium or Large Sponsors Fee: No fees

Determining sponsor size

Small sponsors typically meet two criteria: annual turnover of £10.2 million or less, total assets worth £5.1 million or less, or 50 or fewer employees. Charitable sponsors include registered charities across the UK and other charitable organisations. For clarification, businesses can contact the Business Helpdesk at businesshelpdesk@homeoffice.gov.uk.

Decision timeline

Most applications receive a decision within eight weeks. For an additional £500, you may expect a decision within 10 working days, subject to availability and on a first-come, first-served basis. Instructions for requesting a faster decision are provided post-application.

What is UK Sponsor Licence rating

In the UK, businesses seeking to sponsor employees receive either an A-rating or a B-rating for their sponsor licence. Initially, a new sponsor licence is A-rated, allowing the business to assign sponsorship certificates and appear on the register of sponsors. However, if an authorising officer is based outside the UK, companies applying to sponsor a UK Expansion Worker receive a provisional rating. This limits them to one sponsorship certificate, assigned to the authorising officer for their UK entry. Upon the officer’s visa approval, the business can upgrade to an A-rating and request additional certificates through the sponsorship management system (SMS).

If a business fails to uphold its sponsor responsibilities, its A-rated licence may be downgraded to a B-rating. This prevents the issuance of new sponsorship certificates until improvements are made and the A-rating is restored. However, certificates can still be issued for extending the stay of existing employees. To upgrade back to an A-rating, businesses must follow an action plan set by UK Visas and Immigration (UKVI) and pay a fee of £1,476 within 10 working days of notification. Failure to comply results in licence loss.

After completing the action plan, if the business meets all requirements, it regains its A-rating. Otherwise, it receives another B-rating and must follow a new action plan, incurring additional fees. A business can only receive two B-ratings during the four-year validity of its licence; failing to improve after the second B-rating leads to licence revocation.

The business cannot appeal for a revoked licence but can reapply after 12 months, starting a new application process. It is crucial for businesses facing downgrading or revocation to consult an immigration solicitor to navigate the process of regaining their UK sponsor licence.

UK Sponsorship Licence management and duties

Holding a sponsor licence comes with significant responsibilities. The Home Office expects sponsors to ensure that their foreign employees comply with their visa conditions, including working in the sponsored job and reporting various changes in their circumstances. Moreover, the Home Office will perform regular monitoring, so you must prepared for:

Record Keeping and Reporting

Companies must track and maintain detailed records for employees they sponsor. This includes keeping up-to-date and historical information on their contact details and addresses, passport copies, instances of absence from work, biometric residence permits (BRP), employment agreements, and National Insurance (NI) numbers.

Moreover, it’s essential to report specific changes in circumstances through the Sponsor Management System (SMS) to UK Visas and Immigration (UKVI). These changes can include alterations within the business, such as a change in ownership, as well as modifications in sponsorship matters, such as when a sponsored employee ceases to attend work.

Right-to-Work Checks and Documentation

Right-to-work checks are mandatory to ensure that all employees are working in the UK legally. Sponsors must verify and keep copies of relevant documents like passports and visas, ensuring employees verify them regularly.

Compliance Visits and Licence Validity

The Home Office conducts compliance visits, either announced or unannounced, to ensure that sponsors are fulfilling their obligations. These visits assess whether the sponsor is adhering to immigration rules and maintaining the necessary records.

Ongoing Audit from Home Office

The Home Office conducts ongoing audits to oversee the compliance of sponsors. These audits are crucial as they not only assess current compliance but also help in identifying areas where sponsors may need guidance or improvement to meet the required standards.

Sponsoring individuals under 18

When sponsoring foreign workers under the age of 18, it’s crucial to ensure they have proper arrangements for their travel and arrival in the UK, as well as their living conditions while in the country. Additionally, a letter of consent from their parents regarding these care arrangements is mandatory.

Furthermore, a Disclosure and Barring Service (DBS) check is required for any of your employees who need it. Failure to comply with these requirements can result in the loss of your sponsorship licence.

Sponsoring children under 16

Sponsoring foreign workers under 16 is limited to those on a Creative Worker visa, which might also require a performance licence or a Government Authorised Exchange visa. Additionally, sponsors should be aware of the regulations regarding the number of hours children are permitted to work and whether an employment permit is needed from the local council.

Responsibilities for sponsoring a scale-up worker

For scale-up workers, your sponsorship responsibilities commence from the date you assign them a Certificate of Sponsorship. These responsibilities terminate six months after either the ‘valid from’ date on the worker’s visa, for those who applied from outside the UK, or the date they receive permission to stay, for applications made within the UK.

UK Sponsorship Licence Renewal

UK Sponsorship Licences are not auto-renewable. Organisations must apply for renewal before the existing licence expires to maintain the validity of their sponsored workers’ visas.

The renewal application process

1. Submission through SMS: Renewal requests are made through the Sponsor Management System (SMS). The fee, varying based on company size, must be paid at this stage.
2. Data Verification: Ensure all details in the SMS are current, including accurate information for SMS users (Authorising Officer and Level 1/2 Users) and updates on new company sites and employee details. Inaccuracies can lead to renewal refusal.
3. Sending the Submission Sheet: Post-application, you must complete, sign, and send a submission sheet generated by the SMS to the Sponsor Licensing Unit.

Post-submission review by the Home Office

The Home Office reviews four years of information and documentation to verify compliance, including:

• Ensuring adherence to eligibility criteria and sponsor licence guidelines.
• Reviewing HR systems, staff, and procedures for managing foreign workers.
• Examining issued certificates of sponsorship.

Possible additional documentation

The Home Office may request further documents, which must be provided within five days to avoid risks of application refusal, revocation, or reduced certificate of sponsorship allocation.

Streamlined renewal process

For organisations with at least two successful past renewals and no compliance concerns, a streamlined process is available, typically excluding:

• Company and insolvency checks.
• Reviews of certificate of sponsorship usage, licence structure, visit history, outstanding change requests, and risk profile.
• Checks on accreditation, registration, and other trading.
• Compliance visit referrals.

Preparation for Compliance Visits

If not inspected in the last four years, expect a Home Office visit before renewal approval. Ensure your licence and SMS are fully updated before applying.

Handling Rejections and Refusals

Understanding the outcome: rejection vs. refusal

• Rejection: This occurs for administrative reasons, like missing or incorrect items. The application is deemed invalid, but the fee is refunded, and the company can reapply immediately after correcting the mistakes.
• Refusal: This is more serious and can arise from issues like submission of false documents or failure to comply with Home Office requests. The fee is not refunded, and a ‘cooling-off’ period is imposed, preventing immediate reapplication.

Reasons for UK Sponsorship Licence refusal and response strategies

1. Incorrect or Inadequate Supporting Documents: Ensure all documents are original or certified copies, and comply with Appendix A requirements. If refused for this reason, wait for the cooling-off period to lapse before reapplying.
2. Late Submission of Documents: Send supporting documents within five working days of the online application. Late submissions can lead to refusal and a subsequent cooling-off period.
3. Failed Genuineness Test: Demonstrate the genuine need for a sponsored role and its compliance with skill level requirements. If refused, you can reapply after addressing the concerns.
4. Submission of False Documents: This leads to refusal and a cooling-off period. Ensure all documents are legitimate before resubmission.
5. Issues in Home Office Compliance Visit: Make sure your HR systems are adequate for managing migrant employees. A failed visit can lead to refusal and a mandatory cooling-off period.
6. Key Personnel Issues: Ensure that key personnel and company directors/partners have clean records regarding immigration policies. Refusal due to personnel issues will also involve a cooling-off period.
7. Previous Immigration Offences: Companies penalised for immigration offences must wait one year before reapplying.
8. Revoked Licence: If your licence was previously revoked, a 12-month cooling-off period applies before you can reapply.

Addressing Caseworker Errors

• If the refusal is due to a caseworker error, file a “Caseworker Error Correction Request” within 14 days of the refusal notice. Successful correction requests can lead to immediate reapplication and refund of the second licence fee.

Challenging a Refusal

1. Caseworker Error Correction Request: This is the most straightforward challenge route, applicable if the refusal was due to a processing error.
2. Judicial Review: Applicable when you believe the refusal was unlawful. This complex process requires legal assistance and must be initiated within three months of the refusal.

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How Tech Nomads Can Help

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