If you’re an employer sponsoring workers from overseas, the answer to this question probably seems quite simple at first: I’m allowed to sponsor for up to five years, so I’ll take the full five years thank you.

And for some employers, this makes sense for the reasons that follow.

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Why Sponsor for Five Years?

  1. Increased Certainty

Sponsoring for the full five years can give you some certainty that the worker will stay with you for that five-year period.  Of course it can never be guaranteed, because five years is a long time, but at least you can set your intentions out early.

At the same time, even if those are your intentions, you’re not obliged then to keep the worker for the full five years.  You still have the freedom to terminate early if it’s not working out, as long as you comply with all the usual employment law stuff regarding termination.

  1. Saves Hassle and Money

When a sponsored worker’s Certificate of Sponsorship (or “CoS”) expires, someone has to take some action.  If sponsorship is shorter than five years, that someone is you, the employer.

You’ll need a new CoS to assign to your worker, which costs £199 at the time of writing.  There’s also the administrative hassle involved in requesting and assigning a new CoS, and the process might be a bit different to what you did the first time round.

Some terminology: if your worker came to the UK to work for you, they will have done so by applying for entry clearance using a defined CoS.  This time round, they will be applying for permission to stay using an undefined CoS.  The distinction is important, and if you get it wrong your licence can be revoked.

If you sponsor for the full five years, there’s no need for a second CoS.  This is because when a worker reaches five years in the UK on a Skilled Worker visa, they become eligible to apply for Indefinite Leave to Remain (or “ILR”).  An application for ILR is made by the individual, and requires nothing from you as the employer.

So five years’ initial sponsorship gives the worker a clear run to ILR, without them needing to extend their work visa, and without you needing to apply for a second CoS.

(While we’re here actually – ILR is the moment at which the worker becomes ‘independent of the employer for immigration purposes.  As the name suggests, Indefinite Leave to Remain is permission to stay in the UK without time restrictions, and without the need for a sponsoring employer).

So if all of that is sounding good, perhaps you do want to sponsor for the full five years.

Why Sponsor for Less than Five Years?

There’s only one reason you wouldn’t, but it’s a big one:

  1. Upfront Costs

Maybe you’re already aware of the costs of sponsorship, but if not here’s a quick recap.

If you’re a small business, the licence itself costs £536 and each CoS is £199.  You’ll also pay the Immigration Skills Charge, which is an upfront fee of £364 per sponsored worker per year.

That last bit again:

An upfront fee.  Of £364 per sponsored worker, per year.

This might be what tips the balance in favour of shorter sponsorship.

If you sponsor a worker for five years, you pay £364 x 5 = £1,820, all in one go when you apply for the CoS.  This on top of £536 for the licence, plus £199 for the CoS, is an eye-watering £2,555.

Compare this to two-year sponsorship.  £364 x 2 = £728, plus £536 for the licence, plus £199 for the CoS, is a much-more-palatable £1,463.

Of course, this is the Home Office we’re talking about, so there’s no escaping the costs eventually.  For example, if you sponsor for two years, then three years, you’ll actually pay a bit more overall:

First two years = £536 for the licence, plus £199 for the CoS, plus £728 for two years of the Immigration Skills Charge = a total of £1,463.

Subsequent three years = £199 for a second CoS, plus £1,092 for three years of the Immigration Skills Charge = a total of £1,291.

And that makes a grand total of £2,754 for the five years, which is £199 more than the £2,555 you would have paid if you’d sponsored for five years from the start.  That extra £199 is because of the second CoS.

One final important point: if the worker’s employment terminates before their CoS expires, for whatever reason, you do get a partial refund of the Immigration Skills Charge.  Something else to bear in mind.

Conclusions…

So what to do?  Well ultimately, it’s a commercial decision.  As a business, you’ll be well-used to the trade-offs of upfront vs long-term payment, and you can safely approach Home Office fees in the same way.

At Truth Legal, we support businesses to make decisions which are legally and commercially effective.

You might want to start with our Legal Guide to Sponsorship – it’s completely free to access and we believe it’s the most comprehensive guide out there.

And you can always contact the Immigration Team for a free, no-obligation consultation.