Sponsor licences: your questions answered

Ed Wanambwa (1)
Ed Wanambwa
5 min Read

What is a sponsor licence?

A sponsor licence is a form of licence or permission that is issued by the Home Office to organisations that have successfully applied for one.

In the UK immigration context sponsor licences give permission to the holders to sponsor non-UK citizens to be lawfully employed in the UK, often in the Skilled Worker or Intra-Company sponsored visa categories.

Have sponsor licences become more popular since Brexit?

Prior to Brexit, sponsor licences were only needed to sponsor individuals to be employed in the UK who were not citizens of the UK or an EEA/EU member state, e.g. US, Canadian or Chinese citizens.

However, since Brexit sponsor licences have become an even more popular choice for businesses. This is in large part due to:

  • Brexit ending freedom of movement to the UK by citizens of an EEA/EU member state
  • the UK Government making sponsor licences the main conduit through which it is possible to employ, in the UK, citizens of an EEA/EU member state who did not obtain Settled or Pre-Settled status in the UK and who do not have some other stand-alone right to live and work in the UK

There are now well in excess of 50,000 licenced sponsors in the UK drawn from a very wide range of sectors. These range from ‘household name’ publicly listed multinationals, to financial services companies, to tech companies to universities and small businesses.

The current register of worker and temporary worker licensed sponsors can be found here: Sponsor Licence Register.

How can organisations obtain a sponsor licence?

Obtaining a sponsor licence entails going through the Home Office’s application process.

Prospective sponsors need to prove to the Home Office that:

  • they are “operating or trading lawfully in the UK”
  • have at least one UK-based employee who is prepared to hold the mandatory so-called Key Personnel roles (i.e. Authorising Officer, Key Contact and Level 1 User) to manage different aspects of the sponsor licence
  • that they should be trusted to comply with the sponsorship duties that would be inherited once the licence was granted

Submitting a sponsor licence application essentially entails submitting a wide range of supporting information and documents to the Home Office and paying its fee.

The type and complexity of supporting information and documents mainly depends on the profile of the applicant organisation (e.g. how recently was it incorporated, is it a regulated entity, is it required to file audited annual accounts?) and what route(s)/tiers are needed, e.g. the Skilled Worker and/or Intra-Company transfer routes/tiers.

If the Home Office is satisfied that an applicant organisation should be granted a sponsor licence, then it should grant a sponsor licence with the highest possible A-Rating.

What if the Home Office is unsure whether to grant a sponsor licence?

If the Home Office is unsure whether to grant a sponsor licence based on the information and documents initially provided then it can, for instance, ask follow-up questions and/or visit the premises of the prospective sponsor to carry out a pre-licence assessment visit. This is essentially part of assessing worthiness for a sponsor licence.

During a pre-licence assessment visit Home Office officers can, for instance, check that the prospective sponsor has the necessary human resources (HR) systems in place that mean it is capable of complying with sponsorship duties, that the number of migrants that it wants to sponsor is appropriate to the size and nature of its organisation and check whether it is genuinely able to offer sponsored employment at the required level of skill and pay.

If the Home Office categorically decides that an applicant should not be granted a sponsor licence, it should reject the application.

Can sponsor licences be structured in different ways?

Sponsor licences can be structured in many different ways.

It is very important to structure sponsor licences in the way that is most suitable for each organisation, its objectives and group structure and to include “in-built” risk mitigation features should any non-compliance with sponsorship duties materialise.

It is also important to structure sponsor licences in a way that provides long term flexibility.  This reduces the chances of needing to re-structure the licence at a later stage, which can be both complex and very time consuming.

How long does it take for the Home Office to process a Skilled Worker and/or Intra-Company sponsor licence application?

The Home Office’s standard processing timeframe, from receipt all of the relevant information and documents is currently up to eight weeks although this is not a guaranteed timeframe.

The Home Office can take much longer than this, especially if it feels it necessary to carry out a pre-licence assessment visit before reaching a decision.

In some cases it is possible to pay an additional fee to the Home Office to apply to prioritise a sponsor licence application within a standard 10 working day timeframe, although “priority slots” are extremely limited and not by any means guaranteed.

How long are sponsor licences granted for?

Sponsor licences are granted for four years.  Sponsors then need to apply to renew their licence every four years should they wish to retain them.

Sponsors can usually apply to renew their licences from three months before they are due to expire; their earliest renewal date should be viewable via the Sponsorship Management System (SMS).

Can a business that does not have a legal entity in the UK obtain a sponsor licence?

No. This is why businesses that have not historically had a legal entity in the UK and want to have one need to first incorporate a legal entity in the UK that can then be utilised to apply for one.  

It usually takes much longer for a brand new legal entity to become ready to apply for a sponsor licence.

Our immigration team has significant experience of helping businesses based overseas with readying their newly incorporated UK legal entities to apply for a sponsor licence, both in terms of the mandatory requirements and best practice steps to help convince the Home Office to grant a sponsor licence. 

Can sponsor licences be revoked?

Yes, the Home Office can revoke sponsor licences if, for instance, it is not satisfied that sponsorship duties have been complied with.  There are many separate grounds on which sponsor licences can be revoked.  In the event of revocation, standard Home Office policy is to curtail all visas hitherto sponsored under the licence.

Alternatively, the Home Office might pursue a lesser form of enforcement action such as downgrading a sponsor licence from an A-Rating to a B-Rating or suspending a sponsor licence, both of which have a wide range of negative consequences.

Hence, it is critical that sponsors and their Key Personnel fully understand their sponsorship duties and comply with them in full from “day one” of obtaining a sponsor licence onwards.

Our immigration team has helped a very large number of clients to understand and comply with their sponsorship duties, e.g. through providing bespoke advice and training and undertaking legal compliance audits in which our lawyers visit to assess compliance levels, identify any areas of weakness in compliance levels (and advise how to address them) and provide a range of best practice advice and practical tips. 

Contact Ed Wanambwa for any assistance with sponsor licences.

Please note: These answers are current to the end of March 2022, do not constitute advice and will change as UK immigration law develops over time. 

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