Sponsor Licence Application Guidance

Sponsor licence, also known as sponsorship licence, enables UK companies to hire foreign workers. As such, licenced UK businesses can issue Certificates of Sponsorship (CoS) to eligible non-UK nationals, whether located within the UK or outside the UK, which enable them to apply for a work visa (e.g. Skilled Worker Visa). Educational establishments, such as universities that intend to recruit international students, must also obtain a sponsor licence from the Home Office.

According to the latest Home Office announcement, starting from April 2024, the requirement to renew the sponsor licence every four years is removed. Sponsor licences with an expiry date on or after 6 April 2024, will now be automatically extended for an additional 10 years. However, sponsor licences set to expire before this date must adhere to the previous guidelines, requiring holders to apply for renewal under the existing framework. Prior to the introduction of these new rules, sponsor licences were granted for a four-year term, necessitating employers to seek renewal before expiration.

The sponsor licence application process is strict, and keeping your licence requires committing to a rigorous compliance regime. This involves ensuring that your HR processes and procedures run smoothly and effectively in accordance with the Home Office’s requirements.

For questions on sponsoring talent from overseas, please contact our business immigration lawyers for a telephone consultation on 020 3744 2797 or complete our enquiry form.

Sponsor licence requirements

To be eligible for sponsor licence application, you must meet the following requirements:

• Be genuine, operating, and trading lawfully in the UK
• Be UK based
• Not represent a threat to immigration control
• Have key personnel who are “honest and dependable”
• Have an adequate HR system in place that allows you to carry out your obligations as a licenced sponsor efficiently on an ongoing basis

Sponsor licence business eligibility requirements

Businesses applying for a sponsor licence must be genuine and legally operating in the UK as a PLC, Ltd, LLP or Sole Trader. This means they are a bona fide business with a UK presence operating within the law. For a business to have a UK presence, it must be set up and based in the UK, e.g. a limited company or LLP must be incorporated with Companies House. They must also hold the appropriate planning permission or the Local Planning Authority’s consent for the type of business operated at the trading address.

There is nothing to stop a new start-up business from applying for a sponsor licence. However, businesses that have been operating or trading in the UK for less than 18 months must provide evidence of a current corporate bank account with an FCA and PRA-registered UK bank.

Depending on the type of sponsor licence a business is applying for, there could be additional business eligibility requirements. For example, businesses applying for a UK Expansion Worker sponsorship licence must not have an active trading presence in the UK, but they must have a UK ‘footprint’.

Sponsor licence suitability requirements

As part of the UK sponsor licence application process, businesses need to show that they are honest, dependable, and reliable. They must also be able to meet their responsibilities as a sponsorship licence holder. Specifically, the business must:

• Have suitable HR systems in place to meet their sponsor duties
• Be ready in the event of a UKVI compliance visit, whether announced or unannounced, at all times
• Have no unspent criminal convictions for previous immigration offences or tax evasion
• Have no evidence of non-compliance with previous sponsorship licences
• Not have had a sponsor licence revoked in the last year

Sponsor licence genuine business need requirements

Businesses applying for a sponsor licence must show they have a genuine need to hire overseas workers. Part of this requirement includes meeting the genuineness test for sponsorship. To meet the genuineness test, the business must intend to sponsor workers for eligible roles and be able to meet the skill and salary requirements for each job type. The Home Office will also check to ensure that the intended roles make sense for the type of business and the existing jobs within the business. It is important to note that the genuineness test must be met at the application stage and throughout the life of the sponsor licence.

Businesses must provide information regarding the types of roles they need to fill through sponsorship and any candidates being considered (if this is the case). There is no hard requirement to provide full details of the recruitment. However, doing so may strengthen the application.

Sponsor licence key personnel requirements

When applying for a sponsor licence, UKVI will ask for the names of all key personnel. Key personnel must be British, have no unspent criminal conviction, be on the payroll, and not be related to the candidate. There are four main types of key personnel:

• Authorising officer – A senior person who has ultimate responsibility for the licence, any immigration issues and ensuring that all sponsorship licence duties are met.
• Key contact – The main point of contact with the Home Office.
• Level 1 & 2 users – Level 1 and level 2 users are individuals who will manage the SMS system on a day-to-day basis.

Types of sponsor licence for employers

There are two main types of sponsor licences available for employers: worker licences for skilled or long term employment and temporary worker licences. Businesses applying for a licence must specify which type they need when submitting their application and only recruit international staff for the type of licence they are granted. Depending on your needs and eligibility, you can apply for multiple subcategories of worker licences.

Worker licence

A “Worker” licence is granted to employers who need to employ skilled international workers on a short-time, long-term or permanent basis. Worker licences are available for a number of specific visa categories, including:

• Skilled Worker
• Scale-up Worker
• Senior or Specialist Worker Visa (this replaced the Intra-company Transfer visa)
• Minister of Religion
• International Sportsperson

Temporary worker licence

A “Temporary Worker” licence allows UK-based employers to hire international staff on a short-term temporary basis, including volunteers. Please check our Temporary workers page for types of visas that a business can sponsor.

It is important to understand that not all roles are eligible for sponsorship. For example, under the skilled worker sponsor licence, all candidates must meet the UK points-based system requirements. Sponsoring businesses must pay at least the minimum salary for the relevant role. The exact minimum salary depends on the role and the ‘going rate’. It also depends on other factors such as the candidate’s qualifications (e.g. PhD), age, and whether they are a new entrant to the job market. Before considering sponsorship for a potential employee, it's recommended to look into the requirements of the particular work visa.

How to apply for a sponsor licence

To become a sponsor, a business needs to complete a number of steps, as follows:

1. Decide which categories/tiers it wishes to include on its licence
2. Assess its eligibility and suitability for each category/tier and make any relevant changes to its HR systems
3. Decide who will be “Key Personnel” (Authorising officer, Key contact, Level 1 user of the Sponsor Management System, and Level 2 user of the Sponsor Management System)
4. Collate the appropriate documents for submission with the application
5. Decide how many Certificates of Sponsorship (CoS) it wishes to request for the first year of the licence
6. Complete and submit the online application¹
   and hard-copy documents to the Home Office
7. Where relevant, prepare for and attend the Home Office site visit to the organisation’s offices
8. Receive the decision

Sponsor licence required documents: Appendix A

Appendix A is where the Home Office outlines all of the possible documents that UK sponsor licence applicants may be required to submit². In most cases, you will be asked to submit a minimum of 4 documents. The Appendix A guidance states you may not need to send 4 documents if you are a public body recognised by the UK Government, such as a local authority or a company listed on the London Stock Exchange Main Market.

Depending on your business and the type of licence you require, you may be asked to submit some or all of the following documents (please note this list is not exhaustive and is only a small sample of the possible documents you may be asked to provide):

• Evidence that your business is genuine and active – e.g. accounts for the most recent financial year
• Copies of contracts for goods or services covering at least the 12-month period before the date of application
• Evidence you have a current corporate bank account with a bank registered by the Financial Conduct Authority and the Prudential Regulation Authority in the UK
• VAT registration certificate
• Franchise Agreement
• Evidence of registration
• Endorsement from a governing body
• For religious worker sponsorship - details of your parent organisation and how you are connected to them, where applicable; a hierarchy chart, where applicable, that shows where you are in the hierarchy; the size of your adult congregation; the number of the clergy you currently employ, where applicable addresses of your regular meeting places; and your scheduled days and hours of worship.
• Proof of connection to a qualifying overseas business by common ownership or control or through a joint venture agreement
• Evidence of your graduate training programme
• Proof of your UK ‘footprint’
• Evidence of your overseas trading presence
• Evidence of your planned expansion to the UK

Additional supporting documents for sponsor licence application

In addition to the above documents, you may also be asked to provide any of the following documents:

• Organisation hierarchy chart
• Employer’s liability insurance certificate (providing cover of at least £5m from an insurer authorised by the Financial Conduct Authority)
• Evidence of listing:
  • London Stock Exchange AIM market
  • As an overseas company on the London Stock Exchange International Companies
  • On a Financial Conduct Authority approved international stock exchanges
• Self-assessment tax return to HMRC (SA300 or SA302)
• Company Tax Return (CT620 or CT600)
• Licence for your premises to serve alcohol issued by the local authority or court.

Please note this list of additional supporting documents is not exhaustive.

Sponsor licence fees

The UK sponsor licence application fees are as follows:

To be classed as a small or charitable sponsor, your business must meet at least two of the following criteria:

• Have an annual turnover of £10.2 million or less
• Have total assets of £5.1 million or less
• Have 50 employees or less

For more information about the cost, please see our article: UK Work Visa Sponsorship Costs for Employers.

What is sponsor licence number and CoS

A sponsor licence number is a unique reference number included on a Certificate of Sponsorship (CoS) used by an overseas worker when applying for a work visa. A CoS is an electronic document containing important information about the job offer, including the type of job and the duration of the employment.

A nominated person within your organisation can apply for CoS using the Sponsorship Management System (SMS). If approved by the Home Office (typically within 1 day), the CoS can then be issued to the overseas Worker to prove they have been offered a job, which they can then use to apply for a work visa.

A CoS costs between £25 and £239 depending on the type of licence held.

Defined CoS

Defined Certificates of Sponsorship are issued to Skilled Worker visa holders who apply from outside the UK only. Businesses must apply for and be granted a defined CoS before they can be assigned to a skilled worker.

Undefined CoS

Undefined CoS are issued to candidates who switch to a Skilled Worker visa within the UK and for all other visas, whether applied for inside or outside the UK. Businesses are asked how many of these they will need in the first year of sponsorship. Undefined Certificates of Sponsorship can be assigned to sponsored workers without the need to submit an application each time.

What are sponsor licence duties

The Home Office must be satisfied that the company requesting the sponsor licence is not only aware but is also capable of carrying out its sponsor duties. In practical terms, sponsoring businesses must have the necessary systems and processes in place to:

• Record, report, monitor absences, and update the sponsorship management system with any changes in circumstances (see section below ‘Monitoring and reporting’).
• Ensure that sponsored workers have the skills needed and meet the criteria for the UK sponsorship visa they will be applying for.
• Carry out right-to-work checks in the UK.
• Check and store certain documents relating to the recruitment of overseas workers.
• Report certain events to the Home Office – i.e. if a sponsored worker leaves or if there are certain changes to the business.

Under the current system, there is now no longer a requirement to carry out a Resident Labour Market Test (RLMT) to check if a local worker is available to perform the job before it is offered to an overseas worker.

Monitoring and reporting

Businesses must monitor sponsored workers and keep records, including current and past contact and address details, copies of passports, absences from work, biometric residence permits (BRP), employment contracts, and National Insurance (NI) numbers.

Certain changes in circumstances must also be reported via the SMS to UKVI, including changes to the business (e.g. change of ownership) and changes to sponsorship (e.g. if a sponsored worker stops coming to work).

What is sponsor licence compliance visit

To ensure adherence to the duties and obligations of a sponsor, a UKVI compliance officer may carry out a planned or unplanned compliance visit at any time. Compliance visits may be carried out before granting a sponsor licence (pre-compliance visit) and once the licence has been granted.

During a pre-compliance visit, a UKVI representative will check that the sponsor has the necessary systems and processes in place to keep records, report changes, and monitor staff correctly. They will also check that the business is genuine and trading. Compliance officers have the power to refuse a sponsor licence application if they believe the organisation does not meet all of the eligibility and suitability requirements or if the necessary systems and processes are not in place.

Once the licence has been granted, compliance officers will check that the business is correctly monitoring, reporting, and keeping records in accordance with their sponsorship licence duties. If the compliance officer is not satisfied, they have the power to downgrade, suspend, or revoke a sponsor licence.

How long is a sponsor licence valid for?

Sponsor licences are issued for a period of 4 years. However, the requirement to renew sponsor licence every four years is being abolished from April 2024.

Please note: businesses sponsoring UK Expansion Workers cannot renew their sponsor licence beyond the 2-year period granted. In addition, a Scale-up sponsor licence cannot be renewed beyond the initial 4 year period. Businesses in either category may be able to apply for a worker licence (e.g. Skilled Worker licence) instead.

What is sponsor licence rating

An employer’s sponsor licence can be rated either ‘A’ or ‘B’. Businesses granted a new employer sponsorship licence will be A-rated. Later, where the Home Office has concerns that a business is not adhering to its sponsorship duties, it may downgrade a sponsor to a B rating. This means that they are unable to issue any new Certificates of Sponsorship and need to demonstrate to the Home Office that they have made any improvements requested before their A-rating can be regained.

If a sponsor licence holder is downgraded to a B-rating and they do not prove to the Home Office that all compliance issues have been addressed, they may have their licence revoked entirely. In this situation, any sponsored workers would have their leave curtailed (shortened). It is imperative to engage the services of an immigration solicitor who can help you to regain your UK sponsor licence.

What if my sponsor licence application refused

There are several reasons why a sponsor licence may be refused, including:

• Not meeting the UK sponsorship licence compliance requirements
• Failure to respond in a timely manner to the Home Office’s enquiries
• Concerns that your application is not genuine
• Unspent criminal convictions
• Providing incorrect or false information
• Cooling-off period following a sponsor licence application refusal

If your sponsor licence is refused, contact our immigration lawyers for a free telephone consultation on 020 3744 2797 or complete our enquiry form.

Sponsor licence renewal application

Sponsoring businesses must apply every 4 years to renew their sponsor licence. To ensure no interruption of sponsorship, it is important to apply for renewal before the expiry date of the sponsor licence. Before applying, businesses should check that they continue to meet the sponsorship requirements for their chosen route and they still have the necessary systems and processes in place to meet their duties.

Applications for sponsorship licence renewal can be completed online using the Sponsorship Management System. A fee of £536 is payable for small businesses or charitable sponsors. The fee for medium and large businesses is £1,476.

References

¹ GOV.UK: Online application for Sponsor licence

² GOV.UK: Supporting documents for sponsor licence