UK Sponsor Licence & Compliance Guide for Employers

UK employer immigration law requires organisations wishing to hire non-settled workers to obtain and maintain a Home Office sponsor licence under the Points-Based Immigration System. To sponsor overseas talent legally, an employer must satisfy strict organisational eligibility criteria, assign Certificates of Sponsorship, meet mandatory salary and skill thresholds, and discharge continuous reporting, record-keeping, and right-to-work compliance duties. Failure to comply with these statutory requirements risks severe civil penalties, licence suspension, or complete licence revocation.

Key facts

Understanding UK Employer Sponsorship: The Legal Framework

The UK immigration system operates on the principle that employers share responsibility with the Home Office for managing legal migration. Sponsoring overseas personnel requires holding a valid licence issued by UK Visas and Immigration (UKVI), an operational directorate of the Home Office.

Under the Immigration, Asylum and Nationality Act 2006 and the Immigration Rules (primarily Appendix Worker, Appendix Skilled Worker, Appendix Temporary Work, and Appendix Sponsor Duties), any business operating in England, Wales, Scotland, or Northern Ireland that wishes to recruit non-settled workers must be approved as a licensed sponsor.

+-------------------------------------------------------------------+
|               UK Employer Immigration Legal Architecture          |
+-------------------------------------------------------------------+
|                                                                   |
|   1. Sponsor Licence Application (Organisational Assessment)      |
|      - Key Personnel & HR Systems Audit                           |
|      - Mandatory Appendix A Evidence                              |
|                                                                   |
|   2. Certificate of Sponsorship (CoS) Allocation                  |
|      - Defined CoS (Out-of-country Skilled Workers)               |
|      - Undefined CoS (In-country switching & other routes)        |
|                                                                   |
|   3. Worker Visa Application Stage                                |
|      - Skill (RQF 3+) & Salary Checks (£38,700 / Going Rate)      |
|      - English Language & Financial Maintenance                   |
|                                                                   |
|   4. Post-Licence Compliance & Right to Work Maintenance          |
|      - Appendix D Record-Keeping & 10-Day SMS Reporting           |
|      - Statutory Right to Work Checks (Preventing Civil Fines)    |
|                                                                   |
+-------------------------------------------------------------------+

Key Work Routes Covered by Sponsor Licences

1. Skilled Worker Route: The primary immigration route for hiring non-UK resident individuals into permanent or fixed-term roles meeting minimum skill (RQF Level 3+) and salary thresholds.
2. Global Business Mobility (GBM) Routes: Designed for multinational companies transferring personnel to a UK branch. This includes Senior or Specialist Workers, Graduate Trainees, UK Expansion Workers, Service Suppliers, and Secondment Workers. GBM routes do not lead directly to settlement (Indefinite Leave to Remain).
3. Scale-up Route: Tailored for high-growth businesses demonstrating annualised growth in turnover or staffing of at least 20% over a 3-year period.
4. Temporary Worker Routes: Encompassing Creative Workers, Charity Workers, Religious Workers, and Government Authorised Exchanges under Appendix Temporary Work.

Navigating which route applies requires understanding immigration classifications. When corporate executives evaluate workforce strategy or individuals ask which UK visa is best for me?, the legal assessment depends directly on the nature of the role, the candidate’s skill background, salary level, and long-term settlement intentions.

Sponsor Licence Eligibility and Suitability Requirements

To obtain a sponsor licence, an organisation must satisfy UKVI on two statutory fronts: eligibility and suitability.

Eligibility (Genuine UK Trading Entity + Valid Appendix A Documents)
                                  +
Suitability (Dependable Key Personnel + Robust Appendix D HR Systems)
                                  =
                     Home Office Sponsor Licence

1. Eligibility Criteria

The organisation must establish that it is a genuine organisation operating lawfully in the UK. This involves providing specified corporate documentation under Appendix A: Supporting documents for sponsor licence applications.

• Trading Presence: The organisation must have an active trading address and operational base in the UK.
• Corporate Registration: Depending on the structure, this involves Companies House registration, VAT registration, PAYE registration with HMRC, or statutory regulatory authorisations.
• Genuine Need: The employer must demonstrate a genuine requirement for a licence to hire skilled labour, rather than creating unverified roles.

2. Suitability Criteria

UKVI assesses whether the organisation can be trusted to uphold its sponsorship duties. Suitability assessments examine:

• Key Personnel: The character, criminal record, and immigration history of appointed administrative officers.
• HR Systems: The adequacy of internal human resources infrastructure to monitor sponsored personnel, track visa expiry dates, record contact details, and log absences.
• Past Compliance: Whether the business, its owners, or directors have unspent criminal convictions for immigration offences, fraud, money laundering, or sanctions breaches, or have previously had a licence revoked within the past 12 months.

Appointing Key Personnel

Under Home Office rules, every sponsor must appoint individuals to specific administrative roles within the online Sponsorship Management System (SMS):

Step-by-Step Guide to Applying for a Sponsor Licence

Applying for a sponsor licence involves an administrative and evidentiary procedure. Preparing documentation prior to submission reduces the risk of administrative rejection.

[Step 1: Determine Licence Type & Routes]
                    │
                    ▼
[Step 2: Appoint Key Personnel (AO, Key Contact, Level 1)]
                    │
                    ▼
[Step 3: Complete Online UKVI Application Form]
                    │
                    ▼
[Step 4: Collate & Certify Minimum 4 Appendix A Documents]
                    │
                    ▼
[Step 5: Submit Submission Sheet & Evidence via Portal (within 5 working days)]
                    │
                    ▼
[Step 6: Home Office Pre-Licence Compliance Audit (If Triggered)]
                    │
                    ▼
[Step 7: Licence Approval & Certificate Allocation via SMS]

Step 1: Identify Required Licence Categories

Determine the specific routes required (e.g., Skilled Worker, Senior or Specialist Worker, Creative Worker). Employers frequently bundle Skilled Worker and GBM licences in a single application.

Step 2: Establish Key Personnel

Select an Authorising Officer, Key Contact, and Level 1 User. Ensure these individuals have no conflict of interest or disqualifying criminal history under Home Office suitability rules.

Step 3: Complete the Online Application Form

Access the Home Office sponsor application portal. Input organisational details, PAYE references, Companies House registration numbers, and selected key personnel.

Step 4: Gather Appendix A Documentation

Under Appendix A, most standard UK businesses must submit at least four mandatory documents. Typical combinations include:

1. Proof of active HMRC PAYE registration and Employer Accounts Reference number.
2. Proof of active VAT registration certificate from HMRC.
3. Most recent corporate bank statement from a UK-regulated financial institution.
4. Proof of ownership or lease of business premises, or employer liability insurance certificate showing at least £5,000,000 cover.
5. For regulated sectors (e.g., healthcare, financial services, education): Proof of registration with the appropriate regulatory body (such as the Care Quality Commission, Financial Conduct Authority, or Ofsted).

Step 5: Submit the Application and Evidence

Once the online form is submitted and the application fee is paid, the system generates a Sponsor Application Submission Sheet. The Authorising Officer must sign this document.

All supporting documents must be submitted electronically via the UKVI document upload portal within 5 working days of payment. Failure to supply all required documents within this deadline leads to automatic rejection and forfeiture of the application fee.

Step 6: The Pre-Licence Compliance Audit

UKVI may conduct an unannounced or announced pre-licence compliance visit before granting the licence. Compliance officers inspect trading premises, interview the Authorising Officer, examine HR record-keeping systems, and verify genuine vacancy intentions.

Step 7: Decision and SMS Access

Upon approval, UKVI issues a sponsor licence with an A-rating. The organisation receives access credentials for the Sponsorship Management System (SMS) to manage its Certificate of Sponsorship allocations.

Businesses seeking end-to-end procedural support across all stages of individual visa submissions should review our comprehensive guide on the UK Visa Application Process: Your Essential Guide.

Sponsoring Migrant Workers: Certificates of Sponsorship and Visa Allocation

Holding a sponsor licence permits an employer to issue Certificates of Sponsorship (CoS). A CoS is not a physical paper certificate; it is an electronic record generated in the SMS containing unique reference details that the migrant requires to apply for their individual visa.

                     +---------------------------------------+
                     |         Certificates of Sponsorship   |
                     +---------------------------------------+
                                    |
          +-------------------------+-------------------------+
          |                                                   |
          ▼                                                   ▼
+-----------------------------+             +---------------------------------+
|        Defined CoS          |             |          Undefined CoS          |
+-----------------------------+             +---------------------------------+
| - For out-of-country        |             | - For in-country applicants     |
|   Skilled Worker applicants |             |   (extensions, route switchers) |
| - Must be requested         |             | - Assigned from an annual       |
|   individually per candidate|             |   pre-allocated quota in SMS    |
| - Specific role approval    |             | - Automatically accessible      |
|   by UKVI before assignment |             |   once allocation granted       |
+-----------------------------+             +---------------------------------+

Defined vs Undefined Certificates of Sponsorship

• Defined CoS (DCoS): Mandatory for individuals applying from outside the UK for a Skilled Worker visa. The sponsor must submit an individual application for each DCoS via the SMS, detailing the role, Standard Occupational Classification (SOC) code, working hours, and proposed salary. UKVI typically assesses and approves DCoS requests within 1 to 3 working days, provided the role and salary meet legal minimums.
• Undefined CoS (UCoS): Used for individuals already inside the UK with valid leave who are switching into the Skilled Worker route, extending their current sponsorship, or applying under non-Skilled Worker routes (e.g., GBM, Scale-up). Sponsors request an annual allocation of Undefined CoS during licence setup or through the annual renewal window.

Standard Occupational Classification (SOC) Codes

Every sponsored job must be matched to an eligible 4-digit occupational code in the Home Office classification system (SOC 2020 framework). The SOC code establishes:

1. Whether the occupation meets the minimum skill threshold (RQF Level 3+).
2. The specific "going rate" for the occupation.

Choosing an incorrect SOC code to circumvent salary minimums is classified by UKVI as deception or abuse of the sponsorship system, leading directly to visa refusals and sponsor licence revocation. For structured corporate immigration strategies across business units, consult our detailed analysis on Navigating UK Visa Sponsorship: A Comprehensive Guide for Individuals and Businesses.

Salary Thresholds, Going Rates, and the Immigration Salary List

Following major changes to the UK Immigration Rules, the baseline salary rules for the Skilled Worker route require employers to meet updated financial criteria.

1. General Salary Threshold

To sponsor a Skilled Worker, the employer must pay a gross annual salary that equals or exceeds the general salary threshold of £38,700, or the occupation-specific going rate set out in the Home Office salary tables, whichever is higher.

2. Going Rates and Working Hours Calculation

Home Office going rates are published based on a standard 37.5-hour working week. If a sponsored employee works more hours, the going rate must be pro-rated upwards.

$$\text{Pro-rated Minimum Going Rate} = \left( \frac{\text{Published Going Rate}}{37.5} \right) \times \text{Actual Contracted Weekly Hours}$$

For example, if an occupation's published going rate is £42,000 per year based on 37.5 hours, and the employee is contracted for 40 hours per week, the minimum salary payable is:

$$\left( \frac{£42,000}{37.5} \right) \times 40 = £44,800$$

The sponsor must pay at least £44,800, as this exceeds the general threshold of £38,700.

3. Tradeable Points and Salary Reductions

Under specific criteria, candidates may be paid below the £38,700 threshold (down to minimum absolute floors), provided they qualify for tradeable points:

For comprehensive corporate alignment regarding sponsor governance and operational structures, refer to our advisory guide on Navigating UK Visa & Immigration: Your Expert Guide to Sponsorship Success.

Mandatory Compliance Duties and Home Office Audits

A sponsor licence is a privilege granted on trust. Sponsors must adhere strictly to the compliance duties set out in Workers and Temporary Workers: guidance for sponsors part 3. Compliance focuses on five operational pillars:

+-------------------------------------------------------------------------+
|                  The 5 Core Pillars of Sponsor Compliance                |
+-------------------------------------------------------------------------+
|                                                                         |
|  1. Reporting Duties (SMS updates within 10 or 20 working days)         |
|                                                                         |
|  2. Record-Keeping Duties (Appendix D personnel file maintenance)       |
|                                                                         |
|  3. Complying with Immigration Law (Genuine vacancies, right to work)   |
|                                                                         |
|  4. Cooperation with UKVI (Facilitating announced/unannounced audits)    |
|                                                                         |
|  5. Wider UK Law Compliance (PAYE, National Minimum Wage, pensions)     |
|                                                                         |
+-------------------------------------------------------------------------+

1. Reporting Duties via the SMS

Sponsors must report changes regarding sponsored workers and the business via the SMS within strict statutory deadlines:

• 10 Working Days Window:
  • Sponsored worker fails to start on their contracted start date.
  • Sponsored worker is absent from work for more than 10 consecutive working days without permission.
  • Employment is terminated early (resignation, dismissal, redundancy).
  • Significant changes to employment terms (promotion, change in job title, salary changes, core duties).
  • Change in work location (including permanent remote or hybrid arrangements).
• 20 Working Days Window:
  • Change in company name, registered address, or operating branches.
  • Change in business ownership, mergers, acquisitions, or insolvency proceedings.
  • Changes to Key Personnel (Authorising Officer, Key Contact, Level 1 Users).

2. Record-Keeping Duties (Appendix D)

Under Appendix D: Keeping documents for sponsorship, sponsors must retain specified records for every sponsored worker for the duration of sponsorship plus one year (or until audited and approved by UKVI):

• Certified copies of current and historic passport photo and visa pages.
• Right to Work check verification slips with date stamps.
• National Insurance number evidence.
• Full recruitment records, including interview notes and advertisements (to prove genuine vacancy, even though the Resident Labour Market Test was formally abolished).
• Detailed job description and employment contract signed by both parties.
• Payroll records (payslips and HMRC Real Time Information (RTI) submissions).
• Absence and attendance monitoring logs showing annual leave, sick leave, and authorised travel.
• Evidence of qualifications, professional accreditations, or DBS checks where mandatory.

3. Home Office Compliance Audits

UKVI compliance officers possess statutory powers to conduct announced or unannounced site inspections. During an audit, officers will:

• Interview sponsored employees outside the presence of management to confirm their daily duties match their assigned SOC codes.
• Audit physical and digital personnel files for Appendix D compliance.
• Review electronic door access records, timesheets, and payroll records to confirm working hours and salary payments.
• Inspect the physical premises to confirm genuine commercial operations.

Right to Work Checks and Preventing Illegal Working

Every UK employer—regardless of whether they hold a sponsor licence—has an obligation under Section 15 of the Immigration, Asylum and Nationality Act 2006 to conduct statutory Right to Work (RTW) checks on all employees prior to their first day of employment.

                         +-----------------------------+
                         |  Right to Work Check Method |
                         +-----------------------------+
                                        |
       +--------------------------------+--------------------------------+
       |                                                                 |
       ▼                                                                 ▼
+-------------------------------+             +----------------------------------+
|      Manual Document Check    |             |    Home Office Online Service    |
+-------------------------------+             +----------------------------------+
| - British / Irish citizens    |             | - Biometric Residence Permits    |
|   ONLY                        |             | - eVisa / Digital Status Holders |
| - Inspect original passport   |             | - EUSS Settled / Pre-Settled     |
| - Verify physical presence    |             | - Require 'Share Code' + DOB     |
| - Retain dated copy           |             | - Check profile photo & expiry   |
+-------------------------------+             +----------------------------------+

1. The Three Methods of Conducting Compliant RTW Checks

1. Home Office Online RTW Service: Mandatory for non-UK nationals holding Biometric Residence Permits (BRPs), Frontier Worker Permits, or digital eVisas. The candidate provides a 9-character Share Code and their date of birth. The employer checks the real-time record via the official GOV.UK portal, confirms the photo matches the individual, and downloads the official check PDF.
2. Identity Document Validation Technology (IDVT) via an IDSP: Employers may engage certified Identity Service Providers (IDSPs) to conduct digital RTW checks on British and Irish citizens who hold valid passports.
3. Manual RTW Checks: Permitted only for British and Irish citizens who do not use an IDSP, or individuals with specified physical immigration documentation (e.g., wet-ink stamps in passports). The employer must physically inspect the original document in the presence of the holder, confirm authenticity, and retain an unalterable copy marked with the date the check was conducted.

2. Statutory Excuse and Civil Penalties

Conducting a compliant RTW check before employment starts establishes a statutory excuse against civil liability.

Under the Home Office Code of practice on preventing illegal working, civil penalties for employing an illegal worker stand at:

• Up to £45,000 per illegal worker for a first breach.
• Up to £60,000 per illegal worker for repeated breaches within a three-year period.

In addition to financial penalties, illegal working violations trigger immediate sponsor licence revocation, disqualification of company directors under company law, and potential criminal prosecution under Section 21 of the 2006 Act (carrying up to 5 years' imprisonment) if the employer knew or had reasonable cause to believe the worker lacked lawful status.

Costs, Fees, and Employer Financial Obligations

Employing international staff under the UK sponsorship regime involves administrative, regulatory, and statutory costs.

+---------------------------------------------------------------------------------+
|                       Summary of Total Sponsorship Costs                        |
+---------------------------------------------------------------------------------+
|                                                                                 |
|  Sponsor Licence Application Fee:                                               |
|    - Small / Charitable Sponsor: £536                                           |
|    - Medium / Large Sponsor: £1,476                                             |
|                                                                                 |
|  Certificate of Sponsorship (CoS) Issuance Fee:                                 |
|    - £239 per certificate (Skilled Worker)                                      |
|                                                                                 |
|  Immigration Skills Charge (ISC) (Payable by Sponsor at Assignment):            |
|    - Small / Charitable Sponsor: £364 (1st yr) + £182 per additional 6 months   |
|    - Medium / Large Sponsor: £1,000 (1st yr) + £500 per additional 6 months     |
|                                                                                 |
|  Employee-Borne Costs (Unless Sponsor Opts to Pay):                             |
|    - Skilled Worker Visa Application Fee: £719 to £1,639 (role/length dependent)|
|    - Immigration Health Surcharge (IHS): £1,035 per year of visa duration       |
|                                                                                 |
+---------------------------------------------------------------------------------+

1. Sponsor Licence Fees

The fee for applying for a sponsor licence depends on the size of the organisation under the UK Companies Act 2006:

• Small or Charitable Sponsor: £536. A business qualifies as small if it meets at least two of the following: annual turnover of £10.2 million or less; balance sheet total of £5.1 million or less; 50 employees or fewer.
• Medium or Large Sponsor: £1,476. Applicable to any business exceeding small company criteria.

2. Immigration Skills Charge (ISC)

The ISC is a statutory charge payable by the sponsor at the exact moment a Certificate of Sponsorship is assigned.

• Small/Charitable Sponsor: £364 for the first year of sponsorship + £182 for each additional 6-month period. (e.g., a 3-year visa costs £728).
• Medium/Large Sponsor: £1,000 for the first year of sponsorship + £500 for each additional 6-month period. (e.g., a 3-year visa costs £3,000; a 5-year visa costs £5,000).

Exemptions from the ISC: Sponsoring workers under specific SOC codes (such as chemical scientists, biological scientists, higher education teachers), students switching into the Skilled Worker route in-country, or GBM Graduate Trainees.

3. Legal and Regulatory Restrictions on Fee Recovery (Clawback Agreements)

Employers frequently seek to protect their investment by drafting clawback provisions in employment contracts. However, UK immigration law and employment regulations establish explicit constraints:

• Immigration Skills Charge Prohibition: Under Regulation 12 of the Immigration Skills Charge Regulations 2017, a sponsor cannot claw back, deduct, or pass on the Immigration Skills Charge or CoS assignment fee to the sponsored worker. Attempting to do so is an automatic ground for licence revocation.
• Permissible Clawback: Employers may lawfully agree to claw back non-mandatory payments they covered voluntarily on behalf of the employee (such as the employee's visa application fee, legal representation fees for the employee's individual application, or relocation expenses), provided this is documented in a valid, clear, and reasonable employment agreement that does not breach National Minimum Wage legislation.

To explore the wider interactions across UK visa categories, review our detailed guide on Navigating UK Immigration: A Comprehensive Guide to Key Visa Routes and Sponsorship.

Sponsor Licence Suspension, Revocation, and Remedial Action

When UKVI compliance officers identify breaches of sponsor duties, the Home Office takes enforcement action.

                         +-----------------------------+
                         |   Compliance Breach Found   |
                         +-----------------------------+
                                        |
       +--------------------------------+--------------------------------+
       |                                                                 |
       ▼                                                                 ▼
+-------------------------------+             +----------------------------------+
|     Licence Suspension        |             |      Licence Revocation          |
+-------------------------------+             +----------------------------------+
| - Written notice issued       |             | - Immediate cessation of right   |
| - 20 working days to respond  |               to sponsor                       |
| - CoS issuance blocked        |             | - All sponsored visas curtailed  |
| - Submission of rectification |               to 60 days                       |
|   evidence                    |             | - Minimum 12-month cooling-off   |
| - Potential downgrade to B-   |               period                           |
|   rating with Action Plan     |             | - Only challenge: Judicial Review|
+-------------------------------+             +----------------------------------+

Common Grounds for Sponsor Licence Enforcement

1. Failure to Report via SMS: Not reporting a migrant's absence, resignation, or termination within 10 working days.
2. Unlawful Salary Reductions: Paying a sponsored worker below the mandatory threshold or going rate stated on their CoS.
3. Non-Genuine Vacancies: Sponsoring individuals for generic or non-existent roles, or assigning roles that do not match daily duties.
4. Failure to Maintain Appendix D Records: Inability to provide historic RTW checks, payroll reconciliations, or tracking logs during a compliance audit.
5. Employing Workers Without Permission: Assigning undefined CoS when defined CoS were required, or permitting staff to commence work before visa approval.

Suspension Procedure and Responding to Allegations

If UKVI suspends a licence, it issues a formal Suspension Letter detailing the alleged breaches.

• The sponsor is given 20 working days to provide a detailed written response supported by documentary evidence.
• While suspended, the sponsor remains on the public register but is marked as suspended; it cannot assign any new CoS. Current sponsored staff may continue working during the suspension review.
• UKVI will either: (a) reinstate the licence with an A-rating; (b) downgrade the licence to a B-rating and impose a mandatory, fee-payable Action Plan (£1,476); or (c) revoke the licence entirely.

Consequences of Sponsor Licence Revocation

If a sponsor licence is revoked:

• The business loses the right to sponsor international personnel.
• All existing sponsored employees have their visas curtailed to 60 calendar days (or the remaining duration of their visa, whichever is shorter). During these 60 days, workers must find another licensed sponsor or leave the UK.
• The business is subject to a mandatory 12-month cooling-off period before it can apply for a new sponsor licence.
• The only mechanism to challenge a lawful revocation is through an application for Judicial Review in the Upper Tribunal or High Court on grounds of procedural unfairness, illegality, or irrationality. There is no statutory right of administrative appeal against licence revocation.

Instructing Corporate Immigration Solicitors and Legal Advisers

Given the legal complexity and financial exposure associated with corporate sponsorship, organisations regularly instruct regulated legal counsel to manage their sponsor licence portfolio and right-to-work compliance.

Regulatory Standards in the UK Legal Sector

Immigration advice in the UK is strictly regulated under Section 84 of the Immigration and Asylum Act 1999. Advice can only be provided by:

1. Qualified solicitors and barristers registered with the Solicitors Regulation Authority (SRA), the Bar Standards Board (BSB), or the Law Society of Scotland / Northern Ireland.
2. Immigration advisers registered with the Immigration Advice Authority (IAA) (formerly the Office of the Immigration Services Commissioner - OISC). Wesbridge Associates is regulated by the IAA under registration number F202537300.

Selecting Corporate Legal Support: Assessing Credentials

When businesses evaluate external representation—whether looking for a business immigration lawyer, a corporate immigration solicitor UK, an immigration lawyer London, an immigration solicitor City of London, or an immigration solicitor Manchester—they should verify specific structural criteria rather than relying on unverified claims:

+-------------------------------------------------------------------------------+
|              Checklist for Instructing Regulated Immigration Counsel          |
+-------------------------------------------------------------------------------+
|                                                                               |
|  [ ] Statutory Registration: Verify active listing on the SRA Law Society     |
|      Solicitors Register or the IAA / OISC Register.                          |
|                                                                               |
|  [ ] Corporate Specialisation: Confirm proven practice in Tier 2 / Skilled    |
|      Worker licences, Appendix A compliance, and pre-audit inspection prep.   |
|                                                                               |
|  [ ] Key Personnel Capabilities: Confirm capability to act as Level 1 User    |
|      or Key Contact directly via the Home Office SMS portal.                  |
|                                                                               |
|  [ ] Transparent Fee Structures: Ensure fixed-fee models for licence          |
|      applications, CoS assignments, and mock compliance audits.              |
|                                                                               |
|  [ ] Scalable Compliance Support: Ensure availability of HR system audits    |
|      and mock UKVI inspections across all UK operating offices.               |
|                                                                               |
+-------------------------------------------------------------------------------+

Frequently asked questions

Can a start-up or newly formed business apply for a UK sponsor licence?

Yes, newly incorporated companies and start-ups can apply for a sponsor licence provided they have an active UK bank account with a regulated bank, active HMRC registrations (PAYE and VAT if applicable), and suitable business premises. UKVI does not mandate a minimum trading period, but the business must submit four valid documents from Appendix A proving lawful operations.

What happens to sponsored workers if our company undergoes a merger or acquisition?

Under TUPE (Transfer of Undertakings Protection of Employment) regulations, sponsored employees transfer to the new entity, but specific reporting is required. The new employer must report the transfer via the SMS within 20 working days and, if it does not already hold a valid sponsor licence, apply for a new sponsor licence within 28 calendar days of the transfer.

Is the Resident Labour Market Test (RLMT) still mandatory for Skilled Worker visas?

No, the formal 28-day advertising Resident Labour Market Test was abolished in December 2020. However, employers must still satisfy UKVI’s "genuine vacancy test", meaning the role must be authentic, accurately reflect daily responsibilities, and not be created solely to facilitate entry for a specific individual.

Can an employer pay a sponsored worker below the £38,700 threshold?

Yes, in specific circumstances permitted by the Immigration Rules. Reductions are allowed if the candidate qualifies as a New Entrant (such as individuals under 26 or recent UK graduates), holds a relevant PhD in a STEM subject, or works in an occupation listed on the Immigration Salary List or a national pay scale, subject to absolute salary floors.

What is the difference between an Authorising Officer and a Level 1 User?

The Authorising Officer is the senior corporate figure legally accountable for the organisation's sponsorship licence, recruitment practices, and compliance. The Level 1 User is the administrative user granted access to the SMS to perform day-to-day operations, such as assigning Certificates of Sponsorship and reporting employee changes.

Can our company claw back the Immigration Skills Charge if a worker resigns early?

No. Under the Immigration Skills Charge Regulations 2017, employers are prohibited from passing on, deducting, or clawing back the Immigration Skills Charge or CoS assignment fee from a worker. Any attempt to recoup these specific statutory charges violates sponsor rules and provides grounds for immediate licence revocation.

Sources

• UK visa sponsorship for employers: Overview — Updated March 2024
• UK visa sponsorship for employers: Apply for your licence — Updated April 2024
• UK visa sponsorship for employers: Certificates of sponsorship — Updated April 2024
• UK visa sponsorship for employers: Immigration skills charge — Updated April 2024
• Workers and Temporary Workers: guidance for sponsors part 1 - Apply for a licence — Updated April 2024
• Workers and Temporary Workers: guidance for sponsors part 2 - Sponsor a worker — Updated April 2024
• Workers and Temporary Workers: guidance for sponsors part 3 - Sponsor duties and compliance — Updated April 2024
• Appendix A: Supporting documents for sponsor licence applications — Updated April 2024
• Appendix D: Keeping documents for sponsorship — Updated April 2024
• Skilled Worker visa: your job, eligible occupation codes and going rates — Updated April 2024
• Immigration Salary List — Updated April 2024
• Illegal working penalties: codes of practice for employers — Updated February 2024
• Right to work checks: code of practice for employers — Updated February 2024

Reviewed by Wesbridge Associates editorial team on 1 September 2026. We check our published guidance against GOV.UK and current Home Office rules.