What options do Tier 1 Entrepreneurs have if they cannot recruit from the settled workforce?

Jul 15, 2021
Last Updated on Mar 14, 2024

With the end of the implementation period and freedom of movement, many companies suddenly find themselves in a position where they are struggling to recruit from the UK. As such, more and more companies are now looking to apply for a sponsor licence to hire overseas workers. Some are run by British Citizens and settled persons among these companies, while others might be managed by non-settled workers such as Tier 1 Entrepreneur migrants and Sole Representative migrants.

When preparing a sponsor licence application, the company not only need to demonstrate they are an active, trading company, there are also specific requirements on who can be the Authorising Officer, Key Contact and Level 1 User (i.e. key personnel of the sponsor licence). The purpose of this blog is to explain how a non-settled person with specific work permits can apply for a sponsor licence. For general information on the sponsor licence application process, please see this link

What are the requirements?

Similar to any other Skilled Worker sponsor licence applications, you are required to submit 4 specified documents to demonstrate your company is an actively trading company in the UK. The documents may include a VAT certificate, evidence of a business bank account, evidence of PAYE registration, lease agreement of your business premises and evidence of employers’ liability insurance policy. 

As part of the application, you will need to nominate a person as the Authorising Officer, the Key Contact and Level 1 User. Whilst a person can undertake all 3 roles, you may also appoint different people for each role if you wish to delegate the tasks. Each key personnel has specific duties they need to comply with, and these are explained in turns below:

1. Authorising Officer

 The Authorising Officer is usually the most senior person responsible for recruitment and is responsible for overseeing the activities on the sponsor licence. The Authorising Officer does not have automatic access to the sponsorship management system (SMS) themselves and will need to add themselves as a Level 1 User if access is required. 

A company must have an Authorising Officer in place throughout the life of the sponsor licence, which is valid for 4 years upon the grant with the option for renewals. If you fail to have an Authorising Officer in place at any point, the Home Office may take action against the company.

2. Level 1 User: 

The Authorising Officer is responsible for determining the number of Level 1 Users required for the sponsor licence. The Level 1 User must carry out the day-to-day sponsorship activities on the SMS, such as requesting and assigning a CoS to a migrant and reporting the change of circumstances of a sponsored migrant or the company. 

 Level 1 Users are the only persons with access to the SMS, and it is advised to have at least 2 Level 1 Users, at one time in the event one of them is ill or leaves the company.

3. Key Contact

The Key Contact acts as the main point of contact between the Home Office and the company.

Who can be the key personnel?

The same requirements apply to all 3 key personnel, whereby:

  • They must be based in the UK for the period they have been appointed;
  • Not have any unspent criminal convictions;
  • They must be a paid member of your staff or is an officeholder;

Additional requirements apply to Level 1 Users, whereby:

  • You must always have at least 1 Level 1 User who is a settled worker, with the exceptions of:
    • A person on a diplomatic mission or international organisation licensed under the International Agreement Worker route;
    • The Authorising Officer is a person with valid entry clearance or permission to stay as:
    • A Representative of an Overseas Business;
    • A Tier 1 (Graduate Entrepreneur);
    • A Tier 1 (Entrepreneur);
    • A Tier 1 (Exceptional Talent) migrant;
    • A Start-up migrant;
    • An Innovator;
    • A Global Talent migrant;

Points to note:

1. The Validity of the Licence Depends on Your Status in the UK

As a Tier 1 Entrepreneur migrant, you are permitted to apply for a sponsor licence and name yourself as the Authorising Officer and Level 1 User if you cannot assign these roles to any settled employees.

However, as you would only have limited permission in the UK, the validity of your licence is conditional upon the validity of your status in the UK unless you can appoint another eligible person to replace you as the Authorising Officer upon the expiry of your status. So, for example, if you have been named the Authorising Officer and your sponsor licence is valid until 10 August 2025. But your entrepreneur status expires on 11 February 2023, and you failed to secure your status, you will need to appoint another person as the Authorising Officer and Level 1 User.

Should you lose your status in the UK and fail to be replaced by another key personnel, this will affect the validity of the sponsor licence and the status of any migrants you sponsor. In addition, if your licence ceases to be valid, their leave will likely be curtailed by the Home Office as well.

2. Job Creation Requirement

To meet the job creation requirement for your own extension and/or settlement applications as an entrepreneur, you must create 2 full-time positions for settled workers for a minimum period of 12 months. 

You are not permitted to rely on your sponsored migrant to meet this requirement. Therefore, you must remember the requirements you need to meet for your future applications. 

If you reside in the UK as a Tier 1 (Entrepreneur) migrant or a sole Representative migrant and need to recruit overseas workers, please get in touch with us for a bespoke approach for your sponsor licence application.

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