Sponsor Licence Revocations

Sponsor Licence Revocation – impact assessment

Feb 13, 2024
Last Updated on May 21, 2024

Introduction

When a company completes the process of obtaining a sponsor licence, some believe the work is done and they can focus on sponsoring migrants without worrying about meeting any further obligations. However, it would be a mistake to this view. The threat of revocation is constant, especially with the recent Home Office crackdown to try and reduce the level of net migration. In this blog post, we will examine why sponsor licences are revoked, what the impact of Sponsor Licence revocation is, what a company’s options are and how an immigration lawyer can help.


Why are sponsor licences revoked?

A sponsor licence can be revoked for several reasons. The Home Office conducts regular in-person or virtual visits to sponsors to ensure that they are maintaining the standards expected of a sponsor. These visits can happen at any time and there are multiple areas in which the sponsor can be revoked.

Commonly, a sponsor will fail on issues of compliance. Just one example of such a failure would be poor record keeping. Sponsors must have the personal details of their workers on file, including their contact details, national insurance numbers and records of their absences from work. It is the sponsor’s responsibility to make sure the records are kept updated on a secure HR system. Many sponsors do not realise they must also keep the past addresses of their sponsored workers on their system. Sponsors must keep track of worker attendance and have procedures for managing their workers’ annual leave. The Home Office will be looking at the records of sponsored workers to ascertain if record-keeping requirements are being upheld (evidence-based approach). If Sponsors have poor HR policies, in respect of Sponsor compliance, they are more likely to fail at a visit.

A sponsor can also have their licence revoked for failing to notify the Home Office of changes in circumstances, be that a change in migrant circumstances or the business’ circumstances.

A notable example would be not updating the sponsored worker’s place of work on the Sponsor Management System (SMS) (for example, the company may move a worker from one premises to another). Another more serious breach is moving a sponsored worker to a different role in the business that would fall into a different Standard Occupational Classification (SOC) code. Having their worker work in a different job that does not reflect the work they are doing will be seen as a major breach that could lead directly to having a licence revoked as it goes against the entire purpose of UK’s Immigration Rules for workers. 

Another way companies can often fail (reporting), is to not notify the Home Office when a sponsored worker leaves the company. The Home Office must be notified when a sponsored worker ceases to be employed, for the Home Office to cancel their visa. It follows that failure to report a sponsored worker’s last day of employment is seen as a very serious breach.  

Sponsors can also lose their licences by acting fraudulently. If the Home Office believes a sponsor to be acting fraudulently, they will almost certainly lose their licence as it would not be a mistake but a deliberate act. Examples of how sponsors act fraudulently include sponsors having their workers work without the correct visa. They may forget to diarise visa expiry dates or have them work before their visas are approved, or simply employ them without bothering to confirm they have the correct permission to work in the UK. 

The sponsor may also act fraudulently by having provided false information in their sponsor licence application which comes to light in a visit after it has been approved. This information could be a fake supporting document or giving a false reason for wanting to employ migrant workers. 

Sponsor licences may also be revoked after being downgraded (from an A-rating to a B-rating). The Home Office may downgrade a sponsor licence to a B-rating if they find that a sponsor has not been meeting their duties but not to such a grievous extent to be revoked completely. In that scenario, the Home Office would give feedback on how the sponsor can improve in order to gain their A rating back. However, if the Home Office find that the sponsor has not taken the appropriate steps to improve and rectify their compliance issue (i.e. followed their ‘action plan’), the Home Office would normally revoke the licence entirely.  

What is the impact of sponsor licence revocation?

The impact of a sponsor licence revocation will be very significant for both the company and its sponsored workers. The company will not be able to continue sponsoring workers. This could have a large impact on the company’s ability to perform its work, especially if they have a large part of their workforce who are sponsored. Having fewer workers and being unable to complete work for clients will also lead to a loss of reputation for a company. The company will also not be able to reapply for a sponsor licence for one year from the date of revocation, so these effects will continue to impact the business for some time. The company will be forced to hire domestic staff quickly, which will be difficult as they likely could not do this originally before they decided to apply for a sponsor licence, leading to increased costs and possibly poorer quality employees.

Additionally, if the sponsor licence was revoked on the grounds of employing workers illegally, the company can be fined. From 13 February 2024, the fine can be up to £60,000 per illegal worker (the exact amount will depend on the individual circumstances), with a maximum fine of £45,000 for the first breach.

For the sponsored workers, if they are not complicit in the reasons for sponsor licence revocation, they will be able to stay in the UK for 60 days (curtailment period) to change visa or leave the UK (unless their visa expires before this date). During this time, they can apply for other types of permission to stay, but this will be difficult in such a short period. If they stay beyond the 60 days curtailment period, they will be illegally staying in the UK and will face being forcibly removed.

If the sponsored worker was complicit in the reasons for sponsor licence revocation, then they will not get the 60-day grace period and will have to leave the UK immediately or face being forcibly removed.

What are the options?

There is no right of appeal with sponsor licence revocations. There is the possibility of a judicial review if the company believes that the Home Office made a mistake. This means going to court to prove that the Home Office made a decision that was unfair or unlawful. This is a lengthy and expensive process, but it is normally the only viable option to overturn a revocation decision. 

The other option is to wait for the one-year cooling off period to expire and make a fresh sponsor licence application. During this time, the company can focus on improving the areas for which the sponsor licence was revoked. When it comes to making a new sponsor licence application, the sponsor licence revocation should be mentioned, as well as plenty of evidence that the company will not fail to meet its duties again.

How can an immigration lawyer help?

An immigration law firm, such as A Y & J Solicitors, can help by offering an experienced hand to help a company that has had its sponsor licence revoked. We can help to explain why the sponsor licence was revoked and what the consequences of this will be, including what will happen to the sponsored workers and whether any civil or criminal penalties are likely to be issued.

We can also draft an initial response to the revocation, which will help to show that the company is cooperating with the Home Office. Following this, we can assess the merits of the case and advise on whether a company should pursue a judicial review. If the company decides to pursue this, we will assist with gathering supporting evidence to show that the revocation decision was a mistake. Our experts can assist with processing the judicial review action in the courts. Whilst awaiting a decision, we can help your business to improve so that the original reason for the revocation is negated. 

At A Y & J Solicitors, we can also help with avoiding revocation in the first place. We offer compliance training as part of our sponsor licence application process, which can help future sponsors avoid these issues. We conduct a mock audit which will help sponsors know which areas of compliance they should strengthen in order to avoid a sponsor licence revocation. This is a crucial part of the sponsor licence application process for many companies, as many will not have experience or knowledge of sponsorship duties. Instructing us to deliver compliance training will help to avoid the large cost of revocation down the line.

Conclusion

Sponsor licence revocations can occur for many different reasons and will have a significant economic and reputational impact on the former sponsor. At A Y & J Solicitors, we have a lot of experience of working with sponsors in the sponsor licence application process as well as assisting others who have had their licences revoked recently, or in the more distant past.

A Y & J Solicitors is a specialist immigration law firm with extensive experience with sponsor licence and compliance matters. We are a professional and results-focused firm with an in-depth understanding of immigration law. For assistance with your visa application or any other UK immigration law concerns, please contact us at +44 20 7404 7933 or contact us today. We’re here to help!

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Yash Dubal

Yash Dubal, Founder & Director of A Y & J Solicitors, is a renowned lawyer and entrepreneur. Known for innovative immigration law webinars, he's propelled the firm to award-winning heights. His work champions equality and accessibility, aiding UK immigrants. Yash also dedicates himself to social causes, participating in marathons for charities like the British Red Cross and Pratham. His dedication to immigrant success is unwavering.

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