Sponsor Licence: Essential Administrative Responsibilities All Employers Should Know
Last year, the Home Office removed the requirement for sponsors to renew their sponsor licences. This was welcomed by existing sponsors, as it eliminated the costs and administrative burden associated with renewing a sponsor licence every four years, as was previously mandatory. However, despite the renewal requirement being abolished, sponsor compliance remains a high priority for the Home Office. Employers should, therefore, continue to be well-prepared.
In addition to the sponsor duties related to hiring migrant workers, licensed sponsors are required to keep their sponsor licence details up to date and must report any significant changes to their business within specified timeframes.
This obligation is a core part of the sponsorship duties that each sponsor agrees to when applying for their licence. Failure to comply can result in serious consequences.
The current UK government has emphasised that the Home Office should focus on employer compliance. As a result, more thorough checks are now undertaken when considering applications such as requests for a change of circumstances or for Defined Certificates of Sponsorship (DCoS).
Associated agency checks
When sponsors submit requests for consideration, it is now common for Home Office caseworkers to conduct full Companies House checks on the associated company. This helps identify any discrepancies between the business’s current status and the details held on the sponsor licence. Checks with HM Revenue & Customs (HMRC) are also now considered, particularly to verify payroll information and confirm that an existing migrant employee is being paid the declared salary since securing sponsorship.
Smith Stone Walters has recently observed delays and, in some cases, blocks in DCoS requests due to sponsors failing to update key changes on their licence—such as a change of corporate ownership.
A change in business ownership will typically result in organisations needing to apply for a new sponsor licence. If the Home Office identifies this administrative requirement has not been met, they will pause consideration of any outstanding applications. This can cause serious issues when a sponsored worker needs to renew their visa before it expires, but the employer is required to make a last-minute application for a new sponsor licence beforehand.
Sponsors must always remain aware of their obligation to report changes within the timeframes specified in the guidance for sponsors.
Reporting changes to the Home Office
Reporting is a vital part of your sponsor duties. You must inform the Home Office about any significant changes that affect your sponsored workers or your organisation.
Significant changes to your organisation that must be reported include, but are not limited to:
- A change of address
- Changes to your Key Personnel
- If you are convicted of a relevant offence
- Changes to your organisation’s structure, such as more branches or sites, or new linked entities in the UK (or overseas if you are licensed on the Global Business Mobility routes)
- If your organisation is subject to a merger, takeover or similar change.
Most changes can be reported via the online Sponsorship Management System (SMS). In some cases, you will need to complete a ‘sponsor change of circumstances form’ instead. Once you have submitted details of the change or changes, the Home Office may request further information and/or supporting evidence.
Guidance on how to request or make these changes can be found in SMS Manual 2: Manage your sponsorship licence.
Mergers, takeovers and similar changes
If your organisation experiences a change of ownership, merger, takeover, de-merger, or similar event, you must act accordingly.
Your sponsor licence is not transferable and what happens to you, and your sponsored workers, will depend on whether:
- There is a change in direct ownership.
- You sell all or part of, or the controlling number of shares in, your organisation.
- You are partly or wholly taken over by another organisation.
- You are splitting out to form new organisations.
Your Level 1 User must report any of the above changes via your SMS account within 20 working days of the change taking place. If you fail to do so, your licence may be downgraded or revoked. If your licence is revoked, any workers sponsored by you may have their permission cancelled.
Where there is a change in direct ownership of your organisation, your sponsor licence will be either revoked or, if sponsored workers have transferred to another sponsor’s licence, made dormant. The new owners must then apply for a new sponsor licence if they wish to continue employing those workers.
Further guidance on handling changes in ownership is available in the sponsor guidance documentation.
A better way to manage global immigration
Smith Stone Walters is ready to assist with any questions regarding sponsorship compliance. Now part of Envoy Global, a leading provider of corporate immigration services, we are committed to helping companies manage global immigration more effectively.
The Home Office continues to take decisive action to improve employer compliance and reduce illegal working. Therefore, it is more important than ever for employers to understand and fulfil their sponsorship obligations when employing overseas workers.
Contact Smith Stone Walters to learn how we can support your organisation in maintaining sponsor compliance. Our tailored Immigration Audit Service is designed to meet your business needs and budget, helping you avoid penalties and delays when submitting sponsorship requests.
Whether you need a soft audit for peace of mind or a fully outsourced immigration compliance solution, we have the expertise to assist. Reach out to us today.
