Any employer who wishes to employ an overseas national is required to âsponsorâ them under Skilled Worker Visa and Temporary workers of the Points Based System and must therefore obtain a sponsor licence from the Home Office.
01.01.2025 Significant changes made to guidance on sponsoring workers
The government published a number of significant changes to their guidance for work sponsors
Brief summary of key changes
New restrictions have been introduced restricting which sponsorship costs an employer is able to pass on to the employee â this will affect clawback agreements between employers and sponsored workers.
They have added to the list of people who fall within the definition of âyou and yourâ when referring to the sponsor.
Significant changes have been made to rules regarding the key personnel a sponsor must have â these will affect new sponsor licence applications and could present obstacles to some prospective sponsors.
New restrictions have been added to the guidance regarding sponsorship in a personal capacity â these mainly relate to the sponsorship of workers in private households (such as nannies).
Passing on or recouping of costs
The costs of sponsoring workers in the UK are significant, including not only the costs of sponsorship itself but also the Immigration Skills Charge, visa fees and the Immigration Health Surcharge, as well as any professional legal fees that may be incurred to support the process. It is therefore common for employers to require sponsored workers to meet some of these costs directly, or for employers to recoup some of these costs if the employee leaves their employment before the end of their sponsorship.
The guidance now includes further restrictions on the costs that can be passed on to or recouped from workers. Specifically, a licence will normally be revoked if a sponsor recoups, or attempts to recoup:
the Skilled Worker sponsor licence fee (including the fee for adding that route to an existing licence) and any associated administrative costs (including premium services) â this applies where a sponsor recoups, or attempts to recoup, these on or after 31 December 2024, even if the costs were incurred before that date;
the Certificate of Sponsorship fee for a Skilled Worker, where that Certificate was assigned on or after 31 December 2024 â this does not apply to recouping of costs where the Certificate of Sponsorship was assigned before this date; and
the Immigration Skills Charge for a Skilled Worker or a Senior or Specialist Worker â this was already prohibited and continues to be prohibited.
The restriction on âassociated administrative costsâ is not mentioned in relation to the assignment of a Certificate of Sponsorship or visa application, so it may still be possible to recoup priority service and legal costs for those processes from a sponsored worker (subject to such an action being reasonable in employment and contract law).
Employers and their advisers should take care when applying clawback agreements to ensure that they do not breach the new restrictions and apply any transitional protections correctly. They should also ensure that future clawback agreements are in line with the new guidance.
âYou and yourâ â who is a sponsor?
The guidance for sponsors is primarily an instruction manual explaining what current or prospective sponsors need to do. It sets out what âyouâ need to do to become a sponsor and what âyourâ compliance obligations are once you become a sponsor.
Previously, when speaking to the sponsor as âyouâ or âyourâ, this included any:
owner;
director;
key licence personnel (the Authorising Officer, Key Contact and Level 1 Users);
person involved in the organisationâs day-to-day running.
A new addition has been made to this list in the Glossary to include a âperson recorded on your Companies House profile listing as a Person with Significant Controlâ.
Key personnel eligibility
The guidance continues to require that key personnel be based in the UK and that they be a paid staff member or an office holder. As before, the guidance also requires that at least one of the level 1 users be an employee, director or partner.
It also continues to require that at least one of the level 1 users on the licence be a âsettled workerâ.
However, in a significant change, the guidance now requires that where the licence is applied for after 31 December 2024, the sponsor have at least one level 1 user who is both an employee, director or partner and a settled worker.
For many years, this was the way that licences and key personnel worked in practice, since only a single level 1 user could be nominated as part of the sponsor licence application. Although additional users could be added later, including legal representatives, this meant the first nominated person needed to meet both of these requirements.
However, since updates to the licence application form began to allow a sponsor to nominate multiple level 1 users in the licence application, it became common for legal representatives to be appointed as a level 1 user from the beginning, alongside the employee, director or partner of the sponsor. Where the nominated representative was a settled worker, this freed up the option for the sponsorâs internal user to be non-settled. This new change to require the sponsor to have a level 1 user who meets both requirements removes this option.
This change only applies to sponsor licence applications made after 31 December 2024. The guidance confirms that if an organisation has a licence which was valid on or before this date, they continue to benefit from the old rules where they needed a level 1 user who was an employee, director or partner and a level 1 user who was a settled worker, but these requirements did not need to be met by the same person. However, in the future, UKVI may align these requirements so they recommend, as a matter of best practice, that sponsors appoint at least one level 1 user who can meet both requirements.
Other further updates to the guidance on key personnel include:
key personnel must not be legally prohibited from becoming a company director, unless a court has given permission to act as a director or to promote or form a business and as long their sponsorship role doesnât contravene this permission. Previously a person could be a Key Contact or level 2 user if they were only prohibited from being a director due to being an undischarged bankrupt, but this exemption has been removed in favour of the above;
any nominated person must have a valid National Insurance number, unless they are exempt from requiring one). Although new to the official guidance, this reflects information and instructions that have been in place on the Sponsorship Management System and communicated by UKVI to ILPA previously.
Sponsorship in a personal capacity
The guidance now confirms that sponsor licences must not be used to employ or engage a worker âin a personal capacityâ. Two examples are given of when this may apply:
an individual person or household wishes to employ or engage a worker, or workers, in a personal capacity and the sponsor is not otherwise conducting business or providing a service in the UK
the worker, or workers, will be employed by, or engaged for the personal benefit of, an individual who works for the sponsoring organisation, or a close relative or partner of that individual, and the role is unrelated to the sponsorâs wider activities.
There is a long background to this change. It has always been the case that individuals cannot become licensed sponsors (unless they are sole traders who wish to sponsor someone to work in their business). This has meant that it has been difficult to sponsor many roles that involve working in a private household, such as personal assistants/secretaries, nannies*, carers and cooks. This led to two solutions â they were sometimes sponsored by the employer of someone in the household they worked for, or they were sometimes sponsored by a âfamily officeâ, a business established for the purposes of managing the family/householdâs affairs.
UKVI did not like either of these approaches and in recent years this has led to refusals of licences/visas in circumstances where it may have otherwise appeared that the letter of the guidance was being met but UKVI were not entirely satisfied in terms of intentions and genuineness.
Nannies also face additional difficulties for sponsorship as the changes in April 2024 for nannies and au pairs no longer meets the minimum skill level for sponsorship, can only be extend an existing Skilled Worker visa to work in the same role with the same sponsor.
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Any education provider that wishes to enrol an overseas student is required to âsponsorâ them under the Student Visa Category and must also obtain a sponsor licence from the Home Office.
There are various requirements for various types of establishment that needs to be fulfilled before a sponsor licence will be granted by the Home Office.
A. Who can apply for the licence?
Any establishment in the UK can make an application, if they are considering sponsoring overseas nationals to work in the UK (Skilled Worker Visa) or if they wish to become a sponsor for Temporary Workers Visa or if they wish to enrol students in their educational establishments (Student Visa Category).
In order to become a licensed sponsor the establishment concerned must be a genuine organisation or sole trader operating legally in the UK. In respect of employers, there is no requirement of a minimum turnover or number of staff.
There must be no evidence that the organisation is a threat to immigration control â the Home Office will look at the history and background of the organisation and its key personnel. The organisation must nominate a âlevel 1 userâ, a âlevel 2 userâ, a âkey contactâ and an âauthorising officerâ to operate the sponsorship management system. The organisation must be able to comply with its sponsor duties by showing the necessary human resources systems are in place. All the required supporting documents must be submitted with the application and the organisation must meet the additional requirements for the tier and category they are applying under.
B. Official Home Office fees
A prospective sponsor applying for a licence needs to pay a fee to the Home Office for considering its application. If registering as a Skilled Worker Visa sponsor only for the first time, the fees are ÂŁ1476 for large establishments and ÂŁ536 for small sponsors or sponsors with charitable status. (A small sponsor is one that that qualifies as a small company in accordance with the Companies Act 2006 and has up to 50 hired employees.)
If a sponsor already has a licence and is applying to add more tiers to its licence the fees are considerably less (and nil in a lot of cases).
C. Procedure after submitting the application
From 6 April 2024, any sponsorship licences that are due to expire after this date automatically extended for 10 years and this confirmed in the âview your licenceâ page of the online sponsor management system.
Prospective sponsors make an application for a licence by registering online on the Home Office website and filling out the online application. The applicant sponsor must then print off the submission sheet and send it to the Home Office with the fee and the required original supporting documents. This can only be done by a person authorised to make this application as legal representatives cannot make this application on behalf of prospective sponsors.
The Home Office will consider the application under the specified criteria, making any necessary checks, and consider whether they need to visit the business premises of the applicant or require further documentary evidence before making their decision.
Once the Home Office approves the application, a sponsor licence will be issued to the establishment giving them an A or B rating. If the application is refused there is no right of appeal, but the prospective sponsor can reapply at any time.
From the 6th of April 2024, any licences that are due to expire after this date are going to be automatically extended for 10 years and this will be confirmed in the âview your licenceâ page of the online sponsor management system.
At the same time, any licences that are due to expire before this date must be renewed in the normal way. The Home Office has also confirmed that there will be no fee refunds for sponsors who are obliged to make a renewal application.
For most sponsors this will be welcome news, particularly as a renewal application can often be a trigger for a compliance visit.
Nevertheless, sponsors should still make sure they are compliant with their reporting, recording keeping and general sponsor duties at all times as compliance visits can still take place outside the renewal process, at any time and without prior warning.
Types of sponsor licenses:
A Rating: This rating will be given to those establishments who fulfil all the licence requirements of the HR systems and compliance and pose little or no risk to the aims of managed migration. Sponsors having an A rating will be able to exercise all aspects of sponsorship and employers will also be able to certify its prospective employees for maintenance purposes. This means that its employees (overseas) will not be required to show maintenance funds themselves in their application if they have been sponsored by an A rated employer who certifies maintenance
B Rating: This rating is given to an establishment which poses a risk to the aims of the managed migration as it has some failings in its HR systems or compliance, or both. A B-rated sponsor cannot assign any Certificates of Sponsorship to a new migrant until they have signed up to the sponsorship action plan. For a fee of ÂŁ1,000, the Home Office will provide a sponsorship action plan for a B-rated sponsor which gives guidance on how it can improve its HR systems and/or compliance in order to be given an A rating. If the B-rated sponsor meets the conditions of the action plan it will be upgraded to an A rating. If a sponsor ultimately fails to comply with the action plan its licence will be revoked. (An A rated establishment can be downgraded to a B rating if the Home Office considers there has been some non-compliance).
Once a license is issued with an A rating, a sponsor will then be able to issue Certificates of Sponsorship/Confirmations of Acceptance for Studies to its prospective employees or students respectively who will then need to use the certificate to obtain leave to remain or entry clearance in line with the certificate.
D. Persons Involved in the Sponsorship Process
A prospective sponsor must allocate responsibilities to âkey personnelâ in its staff in the following four roles: authorising office; level 1 user; level 2 user and key contact. These roles can be filled by the same person or by different staff members.
Authorising officer - this must be a paid member of staff or an âoffice holderâ of the organisation. The person should be a senior and competent person in the establishment as they will be responsible for the activities of all users of the sponsorship management system. They have ultimate responsibility throughout the process of applying for a licence and also in issuing sponsorships to the prospective employees of the establishment. This person is responsible for all acts, omissions, compliance and non-compliance performed by the following three personnel:-
Key Contact - this can be the authorising officer, any other person working for the company or even a legal representative (an OISC registered advisor or a solicitor). As the name suggests, this is the person who will act as the main point of contact between the sponsor and the Home Office
Level 1 User - this can be the authorising officer, any other person working for the company or even a legal representative. This person conducts the day-to-day sponsorship activities using the sponsorship management system, assigns Certificates of Sponsorship/Confirmations of Acceptance for Studies and keeps the Home Office informed of any changes and âmigrant activityâ (e.g. if a migrant does not run up for work or studies)
Level 2 User - This can be the authorising officer, any other person working for the company or even a legal representative. This person`s activities are limited to assigning certificates/CASs and to reporting migrant activity to the UK Border Agency
E. Certificate of Sponsorship / Confirmation of Acceptance for Studies (CAS)
These are virtual documents with a unique reference number rather than a paper certificate or a document, issued by registered sponsors. They will be issued by the sponsor once the relevant requirements are complied with. The migrant needs to provide the reference number in their application for leave to enter or remain.
A Certificate of Sponsorship is assigned by Skilled Worker Visa sponsors, i.e. employers. It is valid for three months and if the prospective employee does not use the certificate, it will automatically become invalid and the sponsor will need to re-issue the certificate.
A Confirmation of Acceptance for Studies (CAS) is assigned by the Student Visa Category sponsors, i.e. education providers. It is valid for six months and if the prospective student does not use the CAS, it will automatically become invalid and the sponsor will need to re-issue the CAS.
F. Administrative review procedure (in-country applications only)
You can apply to request a review of your application if you think it was refused because:
the caseworker processing your application made a mistake
your supporting documents were not considered
However, you cannot apply just because you disagree with the decision.
Once completed, your companyâs authorising officer must email a request form to the Home Office within 14 days of the original decision to refuse your sponsor licence application.
The Home Office will aim to inform you of the result of the review and make a final decision within 28 days.
Sponsorship Certificate
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