Comprehensive Support Throughout Your Sponsor Licence Application

Why do you need professional immigration lawyers?

For many sectors – such as agriculture, tech, hospitality and finance – the ability to recruit talent from overseas is imperative to meeting customer demands, launching innovative projects and growing their business. As a result of Brexit, those from the European Union are now required to be sponsored in line with migrants from outside of Europe. Instructing immigration experts who you can rely on to help manage your sponsor licence duties and responsibilities and keep you up-to-date with any changes to relevant regulations, will ensure you remain compliant, and give all aspects of your application the best chance of success. The supporting documents which will accompany your application will differ depending on the type of licence, type of industry your business operates in and the job which will be filled by a foreign migrant. If a mistake is made on your application which subsequently leads to it being refused, a six-month cooling off period may be triggered to prevent you from making another application, which in turn could be detrimental to any business plans.

At A Y & J Solicitors, our lawyers can provide full support and tailored advice specific to your organisation so you can remain compliant at all times, thereby giving you complete peace of mind.

Sponsor licence (formerly Tier 2 sponsor licence) guidance

The Home Office has published new guidance for sponsor licence applications. This reflects changes made to UK immigration rules in December 2020, notably, the replacement of the Tier 2 (General) visa route for sponsored employment with the new Skilled Worker visa route. Since 1 January 2021, companies must have a valid sponsor licence in order to employ all skilled workers from the EEA and Switzerland, this is if they have not been granted pre-settled or settled status under the EU Settlement Scheme.

What is a sponsor licence?

A sponsor licence (formerly known as Tier 2 sponsor licence) allows UK-based companies to employ skilled workers who are based overseas or within the UK (applicants can “switch” into the Skilled Worker visa from most other visa types, for example, Tier 4 Student and Youth Mobility Scheme). A new update came in as good news for Sponsor Licence holders, there is no need to apply for renewal once the licence is issued. So, once the licence is approved, it will be valid until the UK government changes the policy again.

What are the eligibility requirements for a sponsor licence?

To be eligible to apply for a sponsor licence, your organisation must have a UK presence and be operating or trading lawfully in the UK. If you have multiple UK branches, you may apply for one licence to cover all your linked UK entities – alternatively, you might apply for a separate licence for each branch, depending on your circumstances. If you are required to be registered with or inspected/monitored by a statutory body to operate lawfully in the UK, you will need to submit proof that you (and any branches covered by the licence) are registered with the appropriate body. You may also need to supply evidence that you hold the appropriate planning permission or local planning authority consent to run your class of business at your trading address.

The Home Office must be satisfied that you are able to offer genuine employment in a skilled occupation and that you will pay the correct rate of salary as a sponsor licence UK employer, as specified by the Home Office.

As part of your licence application, you are pledging to accept all of the duties associated with being a sponsor licence holder.

Individuals are not normally eligible to be recognised as sponsors, but an exception applies if the individual is a sole trader who wants to find themselves sponsoring a skilled worker within their business.

We have an in-depth understanding of sponsor licence applications and ensure all our clients remain compliant for the duration they hold the licence. For assistance with any UK immigration law concerns, contact us. We’re here to help!

Click here to check your eligibility score to apply for a sponsor licence.

How much does a sponsor licence application cost?

The fee for a business sponsor licence depends on the size and type of organisation. This is a one-time Sponsor application fee because from April 2024, once the licence is issued, there is no need to apply for renewal. Fees are reviewed annually by the Home Office, which will publish any changes. Organisations classified as “medium” and “large” must pay a sponsor licence fee of £1,476. This fee would apply to all organisations which do not meet the definition of a “small” sponsor.

An organisation will generally qualify as a small sponsor if two of the following apply:

• your annual turnover is £10.2million or less
• your total assets are worth £5.1million or less
• you have 50 employees or fewer
• Registered charities are also considered to be “small” sponsors.

Organisations classified as “small” sponsors must pay a sponsor licence fee of £536.

You can calculate the cost of a sponsor licence application to your business by clicking here

If you have already been granted a ‘Skilled Worker’ sponsor licence (formerly known as a Tier 2 sponsor licence) and decide to add a subcategory, there would be no fee. For example, suppose you hold a Skilled Worker licence (formerly Tier 2 General) and would like to start sponsoring migrants under the Senior or Specialist Worker Visa (formerly Tier 2 Intra-Company Transfer). In that case, you’d simply need to apply the Sponsor Management System to add a subcategory – no Home Office fee would apply.

Click here to read more about the cost of a skilled sponsor licence.

What is a sponsor licence rating?

There are two sponsor licence ratings:

✅ A-rating

✅ B-rating

If you are successful in your sponsor licence application, you will be awarded an A-rating. This is the highest rating and is awarded by the Home Office to trusted organisations which have proved they have the necessary systems and processes in place to comply with sponsor duties.

A sponsor must maintain their systems and policies in order to maintain their A-rating. The Home Office may re-assess this rating at any time and a potential compliance visit will determine if an organisation still meets the criteria for an A-rating.

If the Home Office finds that a business is not complying with sponsor duties, it may be downgraded to a B-rating. A B-rated sponsor will need to meet a time-limited action plan to regain their A-rating. If they cannot meet the requirements of the action plan within the specified timeframe, the licence will be revoked.

It should be noted that the Home Office can suspend/revoke a licence without taking the preliminary step of downgrading to a B-rating. The choice of action taken by the Home Office will depend on the seriousness of the breaches which have been identified.

How can my organisation apply for a sponsor licence?

To apply for a sponsor licence (formerly known as Tier 2 sponsor licence), a company is required to submit an application form online along with a minimum of four specified supporting documents as evidence of its trading presence in the UK, in addition to a covering letter to provide background information about the company. Occasionally, the Home Office may require additional documents such as evidence of the company’s HR processes to assess whether the compliance requirements and sponsorship duties will be met. During an assessment of the licence application, the Home Office may also conduct a compliance visit at the company premises. As a consequence of COVID-19, the Home Office has also started to conduct visits via online means such as Microsoft Teams or Zoom. If you do not have a premises, you can agree on a location to hold the compliance audit.

Our team can conduct a mock audit of your HR procedures prior to your formal application being made to identify any weaknesses and put in place an action plan to rectify them.

What documents will my company need to apply for a sponsor licence?

You will usually need to submit a minimum of four specified mandatory documents with the Skilled Worker (formerly Tier 2 General) licence application. The required document list is extensive and will depend on whether you are representing a public body, start-up, franchise or SME. Documents may include:

1. Latest business bank statement.
2. Employer’s liability insurance of at least £5 million from an authorised insurer.
3. Certificate of VAT registration.
4. Evidence of registration as an employer with HMRC – i.e. PAYE and Accounts Office Reference Number.
5. Proof of ownership or lease of business premises or rent agreement.
6. Latest audited or unaudited accounts (audited accounts are mandatory if your company is legally obliged to file audited accounts).
7. If you are required to be registered with and/or inspected/monitored by a regulatory body to operate lawfully in the UK, evidence of your registration.

If you are applying for the Senior or Specialist Worker Visa (formerly Intra-Company Transfer) sponsor licence subcategory, you will also be required to submit evidence of common ownership between the company in the UK and the company overseas.

Each type of licence will require different supporting documents to be submitted. Our team can advise on the type you need to apply for and provide a tailored document checklist for you.

Provided the requirements are met, and the correct evidence is submitted, it is possible to apply for multiple subcategories of sponsor licence at the same time.

What are the main ‘worker’ licence categories?

1. Skilled Worker (formerly Tier 2 General)

The Skilled Worker route is designed for migrants who have been offered a skilled job in the UK. From 1 January 2021, this route has applied to all EEA and Swiss nationals who wish to work in the UK unless they have been granted pre-settled or settled status under the EU Settlement Scheme.

2. Senior or Specialist Worker Visa – Global Business Mobility (GBM) (formerly Tier 2 Intra-company Transfer)

The GBM route is for overseas employees who have been offered a temporary position by their organisation to work in its UK office. The salary must be at least £45,800 per annum or the “going rate”, whichever is higher. Unless the salary package is above £73,900, the employee must have been employed by the company overseas for at least 12 months.

The proposed migrant will be subject to specific requirements in relation to their salary package in order to qualify under the GBM route. The maximum total stay permitted under this route is five years (in any six-year period) unless the salary package is above £73,900. The route does not lead to settlement as opposed to the Skilled Worker visa route. The job must be at RQF level 6 or above (graduate level).

It may also be possible to sponsor an overseas employee under the Graduate Trainee Visa route. This route is designed for individuals who are being transferred to the UK as part of a graduate training programme for a managerial or specialist role. The trainee must have been employed by the overseas company for at least three months before the date of application and the UK salary package must normally be at least £24,220 or 70% of the going rate, whichever is higher, per annum.

3. Sportsperson

Professional sportspersons and qualified coaches cannot be sponsored under the Skilled Worker route and must be sponsored under the separate International Sportsperson Visa.

4. Ministers of Religion

This licence is for those who have received a job offer within a faith community, such as a minister of a religion or a missionary. Unless the role is in a senior position within the organisation, it must be a pastoral role (involving primarily pastoral duties). Roles such as teaching, media production or administration within a faith organisation may not qualify for sponsorship under the Minister of Religion route, and the organisation may need to apply for a Skilled Worker licence instead.

What are certificates of sponsorship?

A Certificate of Sponsorship (CoS) is an electronic document generated on the Sponsor Management System (SMS) after a licence is granted. In order to sponsor a migrant worker, the company must first request a CoS from the Home Office through the SMS. Once this is granted, the company will need to assign it to the migrant worker they intend to sponsor to generate a unique reference number for the candidate to submit during their visa application.

Under new sponsor licence rules, the Home Office has rebranded its previous two types of CoS depending on the immigration status of the migrant worker:

Defined CoS

These certificates are required for those who are based outside the UK and making an entry clearance application as a Skilled Worker.

Once you have identified a person you want to sponsor, you can apply for this on the SMS, and the Home Office will normally process this within 1 working day unless additional information is required. This is judged on a case-by-case basis.

Previously, sponsors were required to submit their request for a restricted CoS (now defined CoS) by the 5th of each month to receive a decision by the 11th of the same month.

The overall cap on the number of defined CoS the Home Office can grant annually has also now been abolished.

Note: Those who are in the UK as visitors will not be able to apply for a Skilled Worker visa within the UK and will need to return to their country of residence for submission. Therefore, they will require a defined CoS.

Undefined CoS

A sponsor can request multiple undefined CoS before their annual allocation expires if they foresee a need to extend the leave of an existing employee or have identified someone they wish to sponsor who requires an undefined CoS (for example, someone “switching” visa category). If a sponsor is able to justify the need for the request, then the CoS allocation will be granted

The processing time for a request to increase your allocation is 18 weeks. However, a priority service is available at an additional cost of £200.

What are the advantages of a sponsor licence (formerly Tier 2 sponsor licence)?

Once an organisation acquires a sponsor licence, they become registered with the Home Office as a sponsor and can begin to issue Certificates of sponsorships (CoS) to skilled foreign migrants, subject to meeting the requirements. For many companies, being able to hire overseas skilled talent is essential to the successful operation and growth of their business. This is particularly so with the end of freedom of movement following the UK’s departure from the EU, meaning that a significant portion of the UK workforce require sponsorship from January 2021 if they failed to secure their status in the UK before the deadline.

At A Y & J Solicitors, we have extensive experience in helping companies acquire and maintain their Skilled Worker sponsor licences.

What can I do if my application for a Skilled Worker sponsor licence is refused?

Unless there was an error in the Home Office’s assessment of the application, a six-month cooling-off period would normally be triggered from the date of the refusal, meaning that another licence application cannot be submitted until the end of that period. In some cases, if the Home Office accept there has been a mistake in the decision to refuse your application, you may submit a pre-licence error correction. However, if the decision is not overturned after the pre-licence error correction, the only other option to challenge the decision would be to lodge a judicial review.

Our team can expertly advise and represent you in challenging a decision of sponsor licence refusal.

What is the ‘cooling off’ period following an application refusal?

There are some circumstances where you may be prevented from applying or re-applying for a sponsor licence for a certain period of time, known as a ‘cooling off’ period. Whether or not this applies will depend on the reasons for refusal and the length of a cooling-off period will vary depending on the circumstances.

For example, if your application was rejected, as opposed to being refused, because you were unable to submit requested information or documentation within a specified timeline (for reasons out of your control) you may be able to reapply without waiting.

In most cases, if a sponsor licence application you have submitted is refused, a six-month cooling-off period will apply.

There are some circumstances where it may be longer. For example, if you have been issued with a civil penalty for employing an illegal worker, it would be 12 months from the date you paid the penalty in full. If you tried to reapply during this time, your application would automatically be refused.

Even if you have never applied for a sponsor licence before, it is very important to check if your business may be subject to a cooling-off period before submitting an application for a sponsor licence.

How can I get a sponsor licence?

To obtain a sponsor licence, UK employers need to follow the below steps:

1. Check your business is eligible, i.e. can you provide the specified documents to show your company is genuine and actively trading in the UK?

2. Choose the type of licence you need.

3. Decide who will manage sponsorship within your business. This person is also known as the Authorising Officer. Usually, this person is the most senior person responsible for recruitment within the company, which can be a company director or an HR manager. Upon the grant of the licence, the Authorising Officer will be responsible for overseeing the SMS and ensuring the sponsorship duties are complied with. You will also need to appoint a level 1 user. This is the person with access to the SMS (sponsor management system) and does not necessarily need to be the Authorising Officer. This person will be responsible for reporting any changes within your organisation as well as requesting and assigning CoS to migrant workers on the SMS. The first level 1 user must be an employee or an office holder of the organisation. However, once the licence is granted, the level 1 user will be able to request for additional level 1 users such as legal representatives to be added.

4. Apply online and pay the fee. The application fees differ depending on the size of your organisation as defined under the Companies Act 2006. If you are a charitable or small organisation, the sponsor licence application fee is £536. If you are a medium or large organisation, the fee is £1,476.

How long will my sponsor licence be valid?

In an update from April 2024, there is no requirement for sponsor licence holders to apply for renewal. However, the Home Office can still suspend or revoke your licence if you fail to comply with your sponsorship duties.

What is the processing time for a sponsor licence application?

The standard processing time for applications is eight weeks. During the processing time, the Home Office may conduct a compliance visit at your office to ensure you are complying with your sponsorship duties. A priority service request can be made to the Home Office and if accepted, they will request a payment of £500 and aim to process your application within 10 working days. Your application may be refused if you fail to demonstrate all sponsorship duties are complied with during the visit.

Before the submission of your application, our team may conduct a compliance audit for your HR system to ensure these duties are complied with and advise on any adjustments if needed.

Why was my sponsor licence application refused?

Your application can be refused by the Home Office for a number of reasons. Some of the most common are:

• Failure to pass the Home Office’s Compliance Audit.
• The business does not have appropriate policy and procedure in place to meet its sponsorship duties.
• The business does not pass the Home Office’s ‘genuineness test’.
• Failure to retain sufficient documentation on migrant workers.
• The business has not responded to Home Office enquiries on time.

This is not an exhaustive list. If your licence application was refused for reasons not listed above, we would require a copy of your decision letter to advise whether it is a challengeable decision.

What happens if I employ migrant workers without a sponsorship licence?

Unless the person has another form of visa that allows them to work, such as those with a PBS dependant visa or a spouse visa, you are not permitted to employ a non-settled worker without a sponsorship licence. If you employ any illegal worker, you may face potential civil penalties as well as criminal convictions.

How do I get my sponsor licence number?

Each licenced company receives a unique sponsor licence number which can be found on the decision letter confirming the grant of the licence. This number can also be found on the licence summary page on the SMS.

Sponsoring a skilled worker: Guidance for sponsors.

The granting of a licence requires sponsors to act in accordance with immigration rules and the UK legal system.A sponsor should keep in mind that sponsorship is a privilege, not a right. The Home Office will never licence organisations whose actions and behaviours tend to obstruct the public good.

The Home Office will take appropriate compliance actions if the existing sponsor is found engaging with behaviours non-conducive to the public good. The compliance action will depend on the gravity of actions or behaviour.

How to send the documents to the home office?

All supporting documents for a sponsor licence application are sent by email. Supporting documents for the skilled worker application are uploaded online to the Applicant’s online appointment booking portal.

How to tell if you’re a small or charitable sponsor?

You’re usually a small sponsor if at least 2 of the following apply:

• your annual turnover is £10.2 million or less
• your total assets are worth £5.1 million or less
• you have 50 employees or fewer
  You’re a charitable sponsor if you’re:
• a registered charity in England or Wales
• a registered charity in Scotland
• a registered charity in Northern Ireland – if you’re not on the register, you must provide proof of your charitable status for tax purposes from HM Revenue and Customs (HMRC)
• an excepted charity
• an exempt charity
• an ecclesiastical corporation established for charitable purposes

Can a sole trader sponsor someone in the UK?

A sole trader can apply for a sponsor licence in the UK and sponsor a skilled worker.

Check whether your worker needs an ATAS certificate

The worker will need an ATAS certificate if all of the following are true:

• you have a Student sponsor licence
• you’re sponsoring the worker in a relevant occupation code
• the worker will be carrying out research at PhD level or above in a ‘relevant subject’ – check the relevant subject areas list in the worker sponsor guidance
• the worker’s nationality is not exempt from needing an ATAS certificate – check the exempt nationalities list in the worker sponsor guidance

What is the Immigration Skills Charge and who is required to pay it?

You might have to pay an additional charge when you assign a certificate of sponsorship to someone applying for a Skilled Worker or Senior or Specialist Worker visa.

You must pay the immigration skills charge if they’re applying for a visa from:

• outside the UK to work in the UK for 6 months or more
• inside the UK for any length of time

You will not have to pay the immigration skills charge if you are sponsoring candidates in certain professions. Please contact us to find out if you are required to pay the immigration skills charge.

How much does the Immigration Skills Charge cost for different types of sponsors?

The immigration skills charge is £364 for every 12 months the candidate will be employed, and £182 for each additional 6 months, if you are a small or charitable sponsor. The immigration skills charge is £1,000 for every 12 months the candidate will be employed, and £500 for each additional 6 months, if you are considered a large sponsor.

Are there any exemptions to the Immigration Skills Charge?

You will not have to pay the charge if you’re sponsoring someone with one of the following occupation codes:

• chemical scientists (2111)
• biological scientists and biochemists (2112)
• physical scientists (2113)
• social and humanities scientists (2114))
• natural and social science professionals not elsewhere classified (2119)
• research and development managers (2150)
• higher education teaching professionals (2311)
• clergy (2444)
• sports players (3441)
• sports coaches, instructors or officials (3442)

You will not be required to pay the charge if someone is switching directly from a Student Visa to a Skilled Worker visa.

If you’re sponsoring someone on the Global Business Mobility Senior or Specialist Worker route

You will not have to pay the charge if all of the following apply to the worker you’re sponsoring:

• they were assigned a certificate of sponsorship on or after 1 January 2023
• they are a national of an EU country or hold a Latvian non-citizen’s passport
• they normally work in the EU for an EU business but have been temporarily transferred to work in the UK
• the end date of the temporary transfer, as specified on the certificate of sponsorship, is no more than 36 months after the start date

How is the Immigration Skills Charge calculated for part-time or short-term employees?

If the skilled worker is in the UK for longer than 6 months but less than a year, you will be required to pay for the full 12 months – I.E. £364 for a small sponsor and £1,000 for a large sponsor. You must pay the immigration skills charge if they’re applying for a visa from:

• outside the UK to work in the UK for 6 months or more
• inside the UK for any length of time

What happens if the Immigration Skills Charge is not paid on time?

Immigration will contact you if you do not pay the charge or if you have paid the wrong amount. You will be given 10 working days to pay the charge or the workers visa application will be refused.

Under what circumstances are refunds issued for application fees or charges?

You’ll get a full refund if the worker’s visa application is:

• refused or withdrawn
• successful, but they do not come to work for you

You’ll get a partial refund if the worker:

• gets less time on their visa than you sponsored them for
• starts working for you but then changes to another sponsor
• leaves their job before the end date on their certificate of sponsorship

You’ll also get a partial refund if you paid the medium or large sponsor fee when assigning the certificate, but had already notified UKVI that you’re now a small or charitable sponsor.

What are the different types of sponsor licence available for employers looking to hire foreign workers in the UK?

There are two types of licences available to sponsors – ‘Workers’ for skilled or long term employment, or ‘Temporary Workers’ for specific types of temporary employment.

A ‘Worker’ licence covers:

• Skilled Worker
• Senior or Specialist Worker
• Minister of Religion
• International Sportsperson

A ‘Temporary Worker’ licence covers:

• Scale-up Worker
• Creative Worker
• Charity Worker
• Religious Worker
• Government Authorised Exchange
• International Agreement
• Graduate Trainee
• Service Supplier
• UK Expansion Worker
• Secondment Worker
• Seasonal Worker

What are the requirements and conditions for obtaining a Skilled Worker sponsor licence?

The business must be able to provide four supporting documents to evidence they are legitimate, for example a bank statement and PAYE registration. The company will also be asked to provide information about themselves in accordance with Appendix A of the sponsor licence guidance.

The employer cannot have any unspent criminal convictions for immigration offences or certain other crimes, such as fraud or money laundering or had a licence revoked in the last 12 months.

You will also need to ensure you have appropriate systems in place, for example, HR management systems, which enable you to monitor employees and remain compliant.

What are the genuine business need requirements for a sponsor licence?

This business needs to demonstrate that they have a genuine vacancy which needs to be filled. They may be asked to provide evidence of their recruitment process to show why they are hiring a foreign migrant.

When making the application for a Sponsor Licence, the business will be required to explain why they are applying for a sponsor licence, and can explain their business needs and aspirations.

What are the key personnel roles required for an organisation to obtain a sponsor licence?

You will be required to appoint people within your business to manage your sponsorship licence. These people will need to be declared when applying for the licence. The roles are:

• authorising officer – a senior and competent person responsible for the actions of staff and representatives who use the SMS
• key contact – your main point of contact with UK Visas and Immigration (UKVI)
• level 1 user – responsible for all day-to-day management of your licence using the SMS

These roles can be filled by the same person or different people

What specific documents are listed in Appendix A that are required for a sponsor licence application?

There are many documents that can be provided to support a sponsor licence application, and these can differ depending on the type of business that you are. For example, a business that sells, cooks, store, handles or distributes food will be required to provide Food Business Registration as one of their supporting documents. The common documents provided are; VAT registration, Business bank statement, PAYE & Accounts Office registration and Employer’s Liability insurance.

What is the minimum turnover a business needs for a sponsor licence?

There is no minimum turnover a business is required to show before applying for a licence. It is advisable that the sponsoring company has a current or projected level of business turnover that would justify their business aspirations and pay the salary of a skilled worker.

Do you need a UK Resident to apply for a Sponsor Licence?

You and your allocated staff must be based in the UK most of the time. There is no requirement for you to be British or have Indefinite Leave to Remain, but you must be based in the UK.

Who can be sponsored under the Sponsor Licence scheme?

You can sponsor anyone under the sponsor licence, however you must be able to demonstrate that the vacant role is for a Non-British/ROI national based lawfully inside the UK or from outside the UK who requires permission to work in the UK.

Should you apply for a Skilled Worker visa or Senior or Specialist Worker visa Sponsor Licence?

Senior or Specialist Worker licences are for multinational companies which need to transfer established employees to the UK, previously the Intra-company Transfer visa. If this is not the case then you would apply for a Skilled Worker licence.

What is the purpose of a supporting covering letter in a sponsorship application?

A supporting cover letter is vital to the sponsor licence application. You are required to demonstrate why you are applying for a sponsor licence and answer questions as per Appendix A of the sponsor licence guidance. These questions include, but are not limited to:

• why are you applying for a sponsor licence?
• what sector do you operate in?
• what are your opening/operating hours during the week?

What are the primary responsibilities of an organisation acting as a sponsor for foreign workers?

The sponsor licence holder must ensure they remain compliant throughout the course of holding a licence. This involves much responsibility and it is advisable to get in touch so we can assist you with a compliance check and ensure you have the necessary HR processes in place.

It is essential the migrants employed under the licence are monitored and sponsors report any changes to their employment.