Sponsorship Licence Overview
UK companies may need a Sponsor Licence to hire foreign workers from overseas. The type of licence will be determined by the role the employee will be fulfilling and the company size.
The typical process to become a Licensed Sponsor usually involves the following steps:
- Check that your business meets the eligibility criteria
- Check that the role in question is suitable for sponsorship
- Choose the type of licence for which you want to apply
- Ensure you have someone to manage the sponsorship in your company
- Submit your application
Sponsorship Licence eligibility
UK employers may need a Sponsor Licence when looking to employ individuals from outside the UK. This includes citizens from the EU, Iceland, Liechtenstein, Norway and Switzerland if they arrived in the UK after 31 December 2020.
Please note that the Employer Sponsorship Licence is not required if you are looking to employ Irish citizens, individuals who have pre-settled or settled status, or those who have Indefinite Leave to Remain in the UK.
General requirements
As an employer, you will have to meet several eligibility criteria to apply for a Sponsor Licence. Some of the key requirements include:
- Operating from the UK
- Being a genuine business, organisation, or sole trader
- Having no history of serious immigration violations
- Being able to nominate at least one staff member for Sponsorship Management System (SMS) roles to ensure compliance with sponsorship duties
- Having a genuine vacancy that meets the skill level and salary requirements prescribed by the Home Office
- Being able to produce all documents required for the application
Please note that nominated SMS roles would also need to meet their own suitability requirements.
When assessing applications, the Home Office will look at both eligibility and suitability criteria to make their decision. Our immigration lawyers know what the Home Office is looking for and can advise you accordingly. We highly recommend getting legal support if you wish to obtain and retain an Employer Sponsor Licence.
Types of licences
Sponsorship Licences can apply to a number of routes. These routes allow UK companies to hire workers with different skill levels for either paid or unpaid work. The type of licence needed depends on the type of role you are filling.
Skilled workers licence
Workers must work in an eligible occupation and meet both the salary requirements and the going rate prescribed by the home office. Those with a job offer from a company with a Sponsor Licence may apply for the following visas:
Temporary workers licence
Skilled workers who will be undertaking work for a limited period may have to obtain a Temporary Worker Visa with the sponsorship of their employer. This type of visa may apply to:
- Charity workers
- Creative workers
- Religious workers
- Sportspersons
- Seasonal workers
- International agreement workers
- Government Authorised Exchange
Employers will have to check the maximum stay duration for their employees and any additional requirements that some roles may have.
Sponsoring under 18s
In some cases, you may be able to sponsor workers under 18 if they are on one of the following visas:
- International Sportsperson Visa (16 or over)
- Creative Worker Visa (no minimum age)
- Government Authorised Exchange Visa (no minimum age)
Sponsor responsibilities
Employers have a number of responsibilities they need to undertake if they wish to retain their licence and continue employing foreign workers. Key responsibilities include:
- Ensuring that the workers have all the necessary skills, qualifications or accreditations required to carry out their roles
- Assigning Certificates of Sponsorships to workers that have a job suitable job for sponsorship
- Informing UK Visas and Immigration (UKVI) when a sponsored worker is not complying with their visa conditions
Employers will need to be able to monitor their employees’ immigration status. This can include keeping a copy of right to work documents such as passports, keeping the employees’ contact details up to date and tracking employee attendance. In addition to informing UKVI about the aforementioned, it is also critical that you inform them immediately if an employee stops coming to work or is no longer contactable.
It also falls under an employer’s responsibility to report any major changes to the company. This can include mergers, take-overs, the nature of the business changing drastically, or if the business stops trading. Any change in role allocation or company details must also be communicated using the Sponsorship Management System.
Please note that reporting any change can take up to 18 weeks to process. You can opt for a priority service to register a change within five working days, for an additional £200 fee.
The responsibilities to fulfil as a sponsor can be extensive, so hiring immigration lawyers is highly beneficial to ensure you understand all aspects of being a sponsor, thereby avoiding the risk of losing your licence.
Under 18s
For foreign workers under 18, employers will need to ensure that they arrange for travel to the UK, arrival and living arrangements there. Parents must also consent to the care arrangements, and some workers may need a Disclosure and Barring Service Check before they can come to the UK.
For children under 16, you will need to check the rules on how many hours children can work and whether they need an employment permit from their local council. Please note that you can only sponsor children under 16 if they are coming to the UK on a Creative Worker Visa or a Government Authorised Exchange Visa.
Sponsorship management roles
You need to appoint people within your business to manage the sponsorship process when you apply for a licence. The main tool they would use is the Sponsorship Management System (SMS).
The sponsorship management roles that can be carried out by one or more people 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 UKVI
- Level 1 user – responsible for all day-to-day management of your licence using the SMS
Please note that only level 1 or 2 users can access the SMS.
You can also appoint an optional level 2 user once you have your licence. This is an SMS user with more restricted access than a level 1 user, e.g., they cannot withdraw a Certificate of Sponsorship.
It is important that the persons appointed to these roles are responsible and available. They all play a part in ensuring that the sponsorship duties are adhered to. Failing to comply with sponsorship duties can have severe consequences such as fines, licence rating reductions and licence revocation.
Suitability checks
An SMS manager (or anyone in the sponsorship process) must meet a certain standard to be deemed suitable for their role. UKVI will look into everyone involved in the application. A licence may not be provided if anyone is involved has:
- An unspent criminal conviction
- Been fined by UKVI in the past 12 months
- Been reported to UKVI
- Broken the law
- Been a ‘key person’ at a sponsor that had its licence revoked in the last 12 months
- Failed to pay VAT or other excise duty
You and your allocated staff must also:
- Be based in the UK most of the time
- Not be a contractor or consultant contracted for a specific project
- Not be subject to a bankruptcy restriction order or undertaking, or a debt relief restriction order or undertaking
- Not have a history of non-compliance with sponsor requirements
- Usually, be paid members of staff or officeholders
There is more ‘key personnel’ guidance available on the government website. Find out more by clicking here.
Sponsorship ratings
Initial A-rating
There are different ratings that you can receive throughout the sponsorship process. If your application is accepted, you start with an A-rating, which is a full Sponsor Licence. It enables you to start assigning Certificates of Sponsorship to workers on permanent or temporary contracts – depending on your application.
Your business will be listed in the register of sponsors, which is the official list of licensed organisations for sponsoring workers on the worker or temporary worker immigration routes.
Downgrading to B-rating
Your A-rated licence may be downgraded to a B-rating at a later stage if you fail to meet your sponsor duties. Should this happen, you may not issue new Certificates of Sponsorship until you have made improvements and been upgraded back to an A-rating. You may still be able to issue certificates to workers you already employ who want to extend or who are switching from a Work Visa.
If you want to upgrade back to an A-rating, you need to follow an ‘action plan’ provided by UKVI to upgrade your licence. This action plan costs £1,476, and this fee must be paid within ten working days of receiving a downgrade notice from UKVI. Failure to do so may lead to the loss of your licence.
At the end of the action plan, you may be upgraded to an A-rating if you complete all the steps, and there’s nothing else you need to improve. You may lose your licence if you don’t comply. If you need to make other improvements, you may be given another B-rating and will have to follow a new action plan. You will have to pay the fee again.
You can only have two B-ratings while your licence is valid (four years). If you still have improvement steps to take after your second B-rating, you will lose your licence.
If your licence gets revoked
If you lose your Employer Sponsorship Licence, you cannot appeal the decision. You can reapply for a new licence, but you will have to wait a minimum of 12 months before you can do so.
Certificates of Sponsorship
A Certificate of Sponsorship is a digital document that employers must assign to each foreign worker employed. Each certificate has a unique number, which the employee must use within three months to apply for their visa.
Before you can assign a certificate to a worker, you may have to check whether they require an Academic Technology Approval Scheme (ATAS) certificate first. You must also consider whether the Certificate of Sponsorship will be defined or undefined.
ATAS certificates
Employers need to check whether their employees need an ATAS certificate if workers hold any of the following:
You may have to provide a brief explanation of why workers do not need an ATAS certificate, should this not apply to them. This can be added as a note on the Certificate of Sponsorship or as a sponsor note after assigning the certificate.
If the worker needs an ATAS certificate, you will need to notify them that this is the case so that they can include it in their visa application. A copy for the company should be provided once issued.
An ATAS certificate is required for a worker if all of the following are true:
- You hold a Student Sponsor Licence
- The worker will carry out research in a relevant subject at PhD level or above
- The worker will have a relevant occupation code
- The worker’s nationality is not part of the list of exempt nationalities.
You can check the Home Office website for further guidance or contact one of our professional immigration lawyers.
Defined certificates (DCoS)
Defined Certificates of Sponsorship are intended for individuals applying for a Skilled Worker Visa from outside the UK. Once you have your licence and access to the SMS, you can apply for a defined certificate through the system.
Certificates are usually approved within one working day, but this may take longer if UKVI needs to carry out additional checks.
Undefined certificates (CoS)
Undefined Certificates of Sponsorship are for individuals applying for a Skilled Worker Visa from inside the UK, as well as all other visa types.
When applying for a Sponsorship Licence, employers will need to provide an estimate of how many undefined certificates they will need initially.
Costs of Certificates of Sponsorships
A fee will need to be paid every time a certificate is assigned to a worker. How much you must pay depends on the type of licence, as follows:
- Temporary worker: £21
- Worker outside of Sportsperson Visa: £199
- International Sportsperson Visa (over 12 months): £199
- International Sportsperson Visa (12 months or less): £21
Please note that you may also have to pay the immigration skills charge if you assign a certificate to someone on a Skilled Worker Visa or Intra-Company Transfer Visa.
Immigration skills charge
The immigration skills charge is an additional fee that employers must pay when assigning a Certificate of Sponsorship to an employee applying for a Skilled Worker Visa or Intra-Company Transfer Visa.
You will have to pay this if the applicant is applying either from inside the UK or from outside the UK to come and work for six months or more. The fee will depend on the size of your company and whether you are a charitable sponsor.
If you are a small or charitable sponsor, the immigration skills charge costs are as follows:
- £364 for the first 12 months
- £182 for each additional six months after that
For medium or large sponsors, the costs are as follows:
- £1,000 for the first 12 months
- £500 for each additional six months after that
Your business is normally 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
Whether you’re a charity will depend on whether you are registered, excepted, exempt or an ecclesiastical corporation established for charitable purposes.
Those who were on a Student visa who switched to a Skilled Worker or Intra Company Transfer visa; and now are extending this visa, will be exempt. This is also the case for those on an Intra-Company Graduate Trainee Visa.
Some occupation codes are exempt, and you do not have to pay the fee for the worker’s dependants. If you would like specific advice for your situation, please get in touch.
Sponsor Licence application
Before you apply
Firstly, you must check that your business is eligible – you can do this using government resources and the assistance of a legal team. You will then want to choose the type of licence for which you want to apply – this will depend on what type of worker you want to sponsor.
You must decide who will manage sponsorship within your business, and when everything is in place, you can apply online and pay the fee. Please note that UKVI may need to visit your business as a part of the Sponsorship Licence process.
To get a licence, you cannot have any unspent criminal convictions for immigration offences or certain other crimes such as fraud or money laundering. You must also have no prior failings in carrying out your sponsorship duties
Sponsor Licence application costs
How much you pay for your Employer Sponsor Licence will depend on both the type of licence you are applying for, and the size of your organisation.
If you are a small business or a charity, you will have to pay £536 for the application fee, whether you are sponsoring a worker or a temporary worker. No fees are applicable if you are adding a worker or temporary worker to an existing licence.
If you are a medium or large company, the fees are as follows:
- £1,476 for a worker
- £536 for a temporary worker
- £1,476 for a worker and temporary worker
Adding a worker to an existing licence will incur a cost of £940, however there is no cost for temporary workers.
Charitable sponsors include organisations that are registered as a charity in England, Wales, Scotland, or Northern Ireland. Some ecclesiastical corporations may also fit this category.
Usually, businesses are considered small sponsors if they meet at least two of the following:
- You have 50 employees or fewer
- Your annual turnover is £10.2 million or less
- Your assets are worth £5.1 million or less
If you are not entirely sure into which category your business would fit, please do not hesitate to contact us to discuss this with one of our London-based immigration experts.
Please note that when considering the total application cost of an Employer Sponsorship Licence, you will have to include legal fees as well as any additional costs that may be needed as part of the process of sponsoring an employee, such as certificate costs and immigration skills charge.
Submitting your application
All applications are made online on the Home Office website. Once the application is completed, you must send all your supporting documents, along with the submission sheet.
After you apply
- You will be given a licence rating if your application is successful
- You will be able to issue Certificates of Sponsorship if you have jobs that are suitable for sponsorship
- Your licence will be valid for four years
You may lose your licence if you don’t meet your responsibilities as a sponsor.
Renewing your Employer Sponsorship Licence
Since a Sponsor Licence is valid for 4 years, you will need to renew it before it expires. You may do so using the Sponsorship Management System. As long as the business and sponsored role continue to meet the requirements, an application can be submitted on the SMS, along with the required fee. You may apply for renewal up to three months before the licence expiry date.
If your application is refused
If you have received a negative decision from the Home Office, you may be able to apply for an Administrative Review of your application.
In these cases, it is important to act swiftly and enlist the help of a qualified team of lawyers who may point out mistakes made by the Home Office caseworker, or highlight where supporting documents have not been considered.
Losing your Employer Sponsor Licence can have serious consequences for your employees and business. If this is a matter on which you need assistance, please get in touch.
How QC Immigration can help
Our team can help you put together a strong application that gives you a better chance of having your Sponsorship Licence granted. We will be able to make sure that all of the relevant documents are submitted on time. We can also assist if you have been downgraded to a B-rating and are seeking to set up an actionable roadmap back to an A-rating.
Our experienced team will assist you in putting your best foot forward and bolstering your chances of a successful employer sponsorship licence application. It is highly advised that you work with a legal team like QC Immigration to improve your chances of a successful application.
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