Boost your recruitment
strategy in 2022 with
a sponsor licence

As the UK economy continues to recover from the effects of COVID-19, many companies are feeling the pressure of an increasingly competitive recruitment market when it comes to filling roles within their business.

The combined impact of the pandemic and Brexit has led to acute skills shortages in key sectors, leaving businesses fighting for the best job candidates from the same pool of talent. Equipping your business to access a wider supply of workers can help you achieve a competitive edge in the current job seeker’s market and attract top talent from overseas.

If your business is planning a recruitment drive in 2022, or you simply wish to refine your recruitment strategy and prepare your business to bring in skilled workers from anywhere in the world, a sponsor licence could be your key to success.

In this article, we set out the basic principles of the sponsorship process, and examine some key data insights from businesses already engaged with the system.

Sponsorship in the UK

Sponsorship is an integral part of the UK’s points-based immigration system. As such, the Home Office intends to introduce key reforms to the sponsorship process in 2022 and beyond, making it easier for users to understand and navigate, and significantly reducing the time it takes to bring someone to the UK.

UK Visas and Immigration (UKVI) recently published transparency data relating to sponsorship activities in the UK for the first time, covering an almost ten-year period from 2012 Q1 up to 2021 Q3. The data provides key insights on the number of sponsors registered on Points-Based System (PBS) routes, a breakdown of the average length of time taken to process sponsorship applications, and data relating to action taken against sponsors. The sponsorship transparency data can be viewed here.

Types of sponsor licence

A sponsor licence is a permission given by the Home Office to an organisation to employ foreign nationals or to enrol international students on work or study visas. There are three types of sponsor licence:

  • A ‘Worker’ licence (previously known as a Tier 2 licence), allows your business to ‘sponsor’ migrant workers on skilled work immigration routes such as the Skilled Worker visa or the Intra-Company Transfer visa.
  • A ‘Temporary Worker’ licence (previously known as Tier 5) will let you sponsor people on a temporary basis, including for volunteering and job-shadowing.
  • A ‘Student’ sponsor licence (previously known as Tier 4) is for educational providers sponsoring international students.

The sponsorship transparency data shows that as of 2021 Q3, there were 35,807 registered ‘Tier 2’ sponsors, 4,019 Tier 5 sponsors and 1,522 Tier 4 sponsors.

It should be noted that sponsors can apply to be licenced under more than one tier. For example, a company who wishes to hire migrant workers to fill permanent roles but also offers seasonal work could apply to be licenced as a Tier 2 and Tier 5 sponsor.

Most businesses wishing to hire workers from overseas should apply for a Tier 2 ‘Worker’ licence. Keep reading to find out who is eligible and how to apply.

Who can apply for a sponsor licence?

Before applying for a sponsor licence, you must ensure your business meets the Home Office’s eligibility and suitability criteria. Your business must:

  • Have an established business presence in the UK
  • Be able to offer genuine employment that meets the skill and salary thresholds for the routes you are applying to be licensed for
  • Have the appropriate human resource and recruitment systems in place to enable you to meet your sponsor duties
  • Have a suitable employee to nominate as the ‘Authorising Officer’. This person will take on overall responsibility for the Sponsor Licence.

You cannot apply for a sponsor licence if you have any unspent criminal convictions for immigration offences or certain other crimes such as fraud or money laundering, or if you have had a sponsor licence revoked in the last 12 months.

Applying for a sponsor licence

The sponsor licence application process includes:

  • Completion of the online application form.
  • Submission of supporting documentation (such as latest annual accounts, corporate bank account statement, employers’ liability insurance certificate and VAT registration certificate).
  • Payment of the application fee. The cost of a Sponsor Licence is £536 for small or charitable sponsors, or £1.476 for medium or large sponsors.

Smith Stone Walters has produced a detailed video guide to the application process, which can be found here.

Once you have applied for a sponsor licence and submitted all necessary information, you should receive a decision from the Home Office within 8 weeks. In cases where a faster turnaround time is required, you may be able to get your application expedited to receive a decision sooner by using the Home Office priority service.

The priority service costs an additional £500 and you should get a decision within 10 working days. However, there is a daily limit on the number of applications that can use the service, and only 10 priority applications per day will be accepted. Demand is high and, for this reason, several attempts to secure ‘priority’ clearance may be necessary.

In 2021 Q3, 81.5% of Tier 2 sponsorship applications took over 4 weeks to process, and the average length of time taken to process an application was 52.88 days.

Maintaining compliance

Once you have applied for and successfully secured a sponsor licence for your business, it is important to keep on top of your ongoing sponsor duties to avoid adverse action being taken against you.

Failure to comply with your legal obligations as a licensed sponsor could result in your licence being downgraded, suspended or revoked. Each of these actions will have different consequences for your business, and the type of action the Home Office decides to take against you will depend on the individual circumstances and the severity of your non-compliance. The action of revoking a sponsor licence is generally reserved for the most serious breaches, and means that your sponsor licence will be cancelled entirely.

UKVI’s sponsorship transparency data shows that in Q1 – Q3 of 2021, only 12 Tier 2 sponsor licences were suspended and just 6 were revoked. This is a sharp drop compared to 2020, where 323 licences were suspended and 291 were revoked.

Despite the reduction in action taken by the Home Office last year, sponsors and potential sponsors should remain vigilant and take steps to ensure they remain compliant. As COVID-19 restrictions are lifted, the Home Office is likely to increase in-person compliance visits and sponsors should be prepared.

Support with sponsorship

To help employers understand their legal obligations as a licensed sponsor, Smith Stone Walters has produced a digital guide to sponsorship duties and how to embed a culture of compliance within your business. To download your free guide, please click here.

If you are considering applying for a sponsor licence or have questions about compliance, Smith Stone Walters can help. To speak to a member of our Sponsor Licence team, please call 0208 461 6660 or email info@smithstonewalters.com.

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