UK organisations that employ or wish to employ foreign workers must have a deep understanding of sponsor licences. As UKVI frequently proposes changes to UK immigration rules and regulations, employers must anticipate these changes and be prepared to respond appropriately.
A UK sponsor licence allows organisations in the UK to hire foreign nationals for crucial roles that cannot be filled by natives or those with settled status in the country. To secure the UK sponsor licence and maintain its status after obtaining it, the Home Office has formulated specific requirements and sponsorship duties, including maintaining accurate records and reporting changes. Even though the Home Office frequently changes immigration rules and regulations, employers must adhere to them to avoid fines and penalties, including suspension of the sponsor licence. Recently, the UKVI implemented a few changes to the existing guidelines for UK sponsor licences.
Sponsor Licence: An Overview
A sponsor licence is an official permit issued by the UK Home Office, allowing an organisation operating in the UK to legally hire talented foreign workers. Securing this licence is vital for organisations wishing to employ foreign workers to strengthen their business.
On the other hand, obtaining a sponsor licence implies that the business owned by the employer is compliant with immigration laws. The primary aim of the sponsor licence is to regulate the employment of overseas workers. This helps ensure that businesses in the UK are not exploiting foreign labourers and, in turn, are contributing to the country’s economic growth. Obtaining and securing a sponsor licence is essential because it:
- Provide access to the global talent pool
- Demonstrates that the organisation complies with UK immigration laws
- Improves the reputation of the organisation
- Confirms that the company is legitimate
Type of Sponsor Licence
The UK government categorises the sponsor licence into several categories that align with immigration policies set by the UK government. The major categories include:
Worker Licence
This category is designed for businesses looking to hire skilled workers long-term. It is divided into skilled worker, senior or specialist worker visa, or Global Mobility Visa (earlier known as Intra-company Transfer Visa), Ministry of Religion, and International Sportsperson.
Temporary Worker Licence
A temporary worker visa allows employers to sponsor overseas talents temporarily. The licence category is further divided into scale-up workers, creative workers, religious workers, charity workers, government-authorised exchanges, international agreements, graduate trainees, service suppliers, UK expansion workers, secondment workers, and seasonal workers.
Securing a UK sponsor licence requires meeting several eligibility criteria, which include:
- The business must legally operate within the UK
- There should be no history of immigration-related offences or unspent criminal convictions.
- The businesses must appoint key personnel to handle the sponsor licence application and sponsorship duties.
- It must maintain accurate records of overseas employees and their visas.
- Compliance with UK immigration rules and requirements is essential.
Sponsor Licence Updates: Key Changes 2025
The UK government made significant changes to the three parts of the sponsor licence. Part 1 and Part 3 were updated on 31 December 2024, and Part 2 on 1 January 2025. The latest updates to the sponsor licence guidance replace the October 2024 version.
There are specific essential changes that an employer needs to know before sponsoring a foreign skilled worker. These include prohibiting passing or recouping costs to sponsored employees and restricting sponsoring workers in a personal capacity. The key changes include:
Prohibition of passing or recouping of cost to employees
The cost of sponsoring a worker is significant. It includes the cost of sponsorship, immigration skill charge, visa fees, immigration health surcharge and professional legal fees. Consequently, many employers pass some of these charges on to the workers they intend to sponsor or recoup some of these charges when the worker leave the company before their sponsorship ends. A close analysis of the Home Office’s stance on this matter shows that employees face poor treatment and exploitation in such situation. In other words, they are trapped between retaining their job in the company or facing significant financial hardship if they leave.
Previously, the only cost that sponsor was prohibited from passing to their sponsored employees was the immigration skill surcharge. While some charges were customary, employers could pass some costs to the workers they sponsor. Conversely, many employers would fund their sponsored employees. In such a scenario, the employees might not pay these costs directly, but the employer might recoup the amount from the employee if they decided to leave the firm before their sponsorship ended.
However, the recently published guidance is considered a game changer in passing or recouping costs from sponsored workers. According to the recent guidelines, if an employer attempts to pass or recoup costs from workers, there is a risk of having their licence revoked. The costs include:
- Skilled worker sponsor licence fee and other associated administrative costs (this applies when a sponsor licence holder recoups or attempts to recoup this amount from the worker on or after 31 December 2024, or even if the cost was imposed before the proposed date).
- The fees for assigning CoS (Certificate of Sponsorship) for the skilled workers assigned on or after 31 December 2024. However, this does not apply to recouping the cost of CoS from the employee assigned before this date.
- The Immigration Skills Charge for skilled workers/ senior workers/ specialist workers. Passing or recouping this amount has already been prohibited and continues to be so.
Employers and their legal representatives must ensure that when applying for a clawback agreement, they do not violate the new restrictions. They must ensure that the clawbacks mentioned in the agreement align with the new guidelines.
This guideline ensures that sponsored workers are not financially burdened with the immigration sponsorship process.
Eligibility of Key Personnel
The key personnel for the sponsor licence include the Authorising Officer, Key Contact, and Level 1 and Level 2 users. The UK Home Office has also proposed some changes in the key personnel category. While they retain the majority as it is at its core, they propose implementing some significant changes.
The latest guidance states that the key personnel must be based in the UK and be paid members of the organisation. In addition, the latest guidance also states that at least one level 1 user needs to be an employee, director, or partner, and the nominated person must have ‘settled status’ in the country.
According to the last update, the sponsor licence application applied after 31 December 2024 must have at least one level one user, who is both an employee/director/partner and has settled status in the country at the time of application (mentioned in L4.49). The sponsor cannot assign a representative or a person from another organisation as a Level 1 user at this phase. However, the sponsor can add more Level 1 users after getting the licence, including UK-based representatives (mentioned in L4.50). In addition, representatives outside the country are ineligible for filling any key personnel roles when applying for a sponsor licence.
Sponsoring Workers for Personal Capacity
The latest update regarding the guidelines of sponsor licence mentions the prohibition of sponsoring workers in a personal capacity (as outlined in L1.7). This means that companies holding sponsor licences are prohibited from sponsoring workers for personal or household purposes.
In other words, sponsors are forbidden from sponsoring workers such as nannies, caregivers, and housekeepers. The recent guidelines from the Home Office officials state that they will not grant a sponsor licence if the applicant intends to sponsor workers in their personal capacity.
In another scenario, if the Home Office finds that the sponsor licence holder is misusing the UK sponsor licence by employing workers for household jobs, the sponsor will face revocation of the licence (as mentioned in L1.8).
With this clarification, the Home Office aims to prevent the misuse of the sponsor licences and ensure that they are used for legitimate business purposes and other organisational requirements. This update from the Home Office illustrates the UK’s commitment to tackling workplace exploitation and ensuring that sponsors do not misuse the sponsor licence system for their own purposes. However, there is an exception for private servants working in diplomatic households.
Minor Update for Care Worker Sponsors
The recent update on sponsor licence from the Home Office includes a minor change for care workers who wish to sponsor skilled workers for their care homes. According to the latest update, care worker sponsor needs to submit additional documents to sponsor care workers or senior care workers, especially those handling multiple branches of care homes. At the time of the application, the applicant must provide a CQC status check for each branch and its main office.
Final Thought
The sponsor licence guidance in 2025 introduces significant changes that require the keen attention of sponsors, who rely on foreign skilled workers to implement it effectively. The latest update emphasises the prohibition of cost passing or recouping, clarifies sponsoring for personal capacity, and outlines stringent requirements for the eligibility of key personnel roles. This action from the Home Office underscores its commitment to vigorous enforcement and protection of the workforce.
By prioritising adherence to the latest guidance, updating internal procedures and seeking advice from sponsor licence solicitors like City Legal Solicitors, businesses can avoid penalties and maintain access to the global pool of talent. This also ensures a smooth transition into the evolving landscape of immigration.
Planning to secure a sponsor licence? Looking for the perfect team of experts to make the process hassle-free? At City Legal Solicitors, we have experienced sponsor licence lawyers, who are experts in handling sponsor licence and tailoring the service to your needs. Want to approach us? Contact us today @ 020 8175 4000 or visit our website https://citylegalsolicitors.co.uk/ for more information.
