Home » The New Guidance For Applying For a Skilled Worker Sponsor Licence (2022)

The New Guidance For Applying For a Skilled Worker Sponsor Licence (2022)

The Skilled Worker route became operational on 1 December 2020, having undergone significant changes from the old Tier 2 licence system. We’ve now been working with the new system for just over a year.

The legal guide below contains everything we knew before, as well as a few things we’ve learned along the way, all updated for 2022.

Introduction →

How to use this guide→

Part A: Who can i sponsor?→

  • Getting the right role and pay: our three step guide

Part B: Key Personnel – Who can manage the licence? →

Part C: Certificates of Sponsorship →

  • Understand which type of certificate you need
  • How long should I sponsor for?

Part D: How do I show the job is ‘genuine’? →

  • What the Home Office want to know
  • Do I have to advertise for the position?
  • Why getting the job description right is important!

Part E: Know your deadlines and timescales! →

Part F: Sponsor licence compliance →

  • Why is compliance so important?
  • Compliance is for life (…time of a licence)
  • Key areas of compliance
  • Sanctions for non-compliance
  • Preparing for a compliance visit
  • How Truth Legal can help you to become compliant

Part G: Applying for a sponsor licence→

  • 4-Step Guide to Applying for a Sponsor Licence

Part H: Niche sponsor licence issues→

  • Can I sponsor a family member?
  • Can I be sponsored by a business I own?

Part I: Dealing with a rejection or refusal→

Part J: How much does sponsorship cost?→

Introduction

On 1 December 2020, sweeping changes were made to the UK’s sponsorship system, and it was rebranded from its old identity as the ‘Tier 2’ system to the shiny new ‘Skilled Worker route’.  We first published this legal guide around the same time, and the guide has remained popular throughout 2021.

As we go into 2022, now seems like the perfect time to revisit our legal guide, and that’s exactly what we’ve done below.

Of course, we now also have the benefit of over a year’s experience working with the new system.  That’s a year of talking to employers, answering questions, and checking evidence.  A year of writing cover letters, phoning the Helpdesk, and submitting applications.  A year of reading the guidance, talking to each other about the guidance, then reading the guidance again… and again…

It’s also been a year of success.  In 2021, we’ve had over 30 licences granted and sponsored numerous workers.

In this legal guide, we don’t just copy-and-paste from gov.uk.  Instead, we’ve tried to simplify what’s out there and combine it with our practical experience, to give you information which is authoritative, accurate and accessible.  Whether you want to go it alone with sponsorship or use our expertise, you’re starting in the right place.

how-sponsorship-changed

How to use this guide

If you are reading this legal guide then your primary concern is to get a licence in place, whether that is to allow you to hire a specific individual or to make you well-placed to hire in the future. Whilst obtaining the licence is itself a challenge, getting the licence really is just one step in the sponsorship process. Do you understand what type of certificate of sponsorship you will need? Although the resident labour market test has been abolished, will you still need to run a recruitment exercise? How do you know which is the most appropriate job code? Do you know how much you will have to pay? How long does all this take? What are my sponsor duties and how do I prepare for an inspection? These are all essential questions you need answers to – and which we cover here.

If you just focus purely on the sponsor licence application part, without considering these other aspects of sponsorship, then you are likely to run in trouble. Your application could be refused, or, even if your application is granted, your licence could be taken away at a later point, if the Home Office do not think you are taking your role as sponsor seriously. And if your licence is revoked then you must terminate any sponsored individual’s employment.

That said, you are welcome to skip straight to the section on applying for a sponsor licence.

Part A: Who can I sponsor?

Before you enter the world of sponsorship, you need to understand which roles can be sponsored and how much you will need to pay. This is where the 2020 changes were helpful, as both the minimum skill level and minimum pay thresholds have decreased.

Getting the role right is essential and this should normally be your first port of call. When you assign a certificate of sponsorship you specify a role, and then that individual is tied to that role. If you want that person to do job tasks falling outside of this role, they will likely need new sponsorship.

Getting the right role and pay: our three-step guide

Step 1: Identify the job category and SOC code

You need to be clear under which job classification the job falls, note that the Home Office is concerned about the substance of the work being done, rather than the label.

Still struggling with the SOC code?

louis macwilliam - head of immigration

Often employers struggle with getting the correct SOC code. You might have a job title which is not recognised as an occupation on Appendix Skilled Occupations.

The Office for National Statistics handles the classification of jobs. Go to their ONS website and use their helpful search tool, for further job roles and SOC codes. You might even mention your efforts to use the ONS search tool in your sponsor licence cover letter – show the Home Office you have seriously considered this issue!

It is important to get the role correct. The Home Office has a specific basis to revoke your licence, if they discover that the role the sponsored migrant is doing does not match either the occupation code or job description as stated on their certificate of sponsorship.

Step 2: Skill level

When we talk about minimum skill level, we’re talking about the level at which a job is recognised by the Home Office as being capable of sponsorship.  It used to be degree-level or above, now it’s A-level or above.  Although this means a lot more jobs are now capable of sponsorship, if the Home Office thinks a job role doesn’t meet the skill level, you won’t be able to sponsor someone to fill that job role.

So how do you know if a job is skilled enough to be sponsored?

Well, the Home Office has decided for you, and it’s list of eligible jobs is here.  If the job you want to sponsor is on the list, then it can be sponsored.  There’s no need for a worker actually to hold an A-level qualification.

The one caveat to this rule is care workers and associated roles falling under the code ‘6145 care workers and home carers’ – these roles are being added to the shortage occupation list and so are capable of sponsorship, despite being below the general minimum skill level.

Step 3: Identify the appropriate rate of pay

The December 2020 changes saw a reduction in minimum salary thresholds, which has meant that many more jobs can now be sponsored.  There’s also greater scope for individuals to be classed as ‘new entrants’ – more on that below.

Despite the changes, minimum salary remains one of the trickiest areas of sponsorship.  It’s definitely in my top three ‘least-favourite-things-about-sponsor-licences’, and might even be in my top one.

One general point before we get into the details: the Home Office only takes account of basic pay in its assessment of whether the minimum salary requirement is met.  Allowances, overtime and bonuses are expressly excluded, even if guaranteed.

Generally, you have to pay your sponsored worker a basic rate which is equal to or greater than each of the following:

  • the general minimum threshold, set at £25,600 for all job roles;
  • the ‘going rate’, which varies depending on the job role; and
  • £10.10 an hour.

So far, so good, but some of these numbers start moving around depending on how many hours your sponsored employee will work each week.

(a) General Minimum Threshold

The general minimum threshold at (a) above will cover you up to 48 hours per week.  If your worker works more than that, the number will increase accordingly:

£25,600 ÷ 48 x [number of weekly hours, if greater than 48]

For example, if your sponsored worker will be working 50 hours per week, they must be paid at least £25,600 ÷ 48 x 50, which is £26,666.  They might also be quite tired.

If your sponsored worker will be working less than 48 hours a week, the general minimum threshold stays at £25,600.  You need to pro-rata it upwards, but you can’t pro-rata it downwards.

(b) Going Rate

The going rate is more of a headache.  Although the general minimum threshold at (a) above is good for up to 48 hours a week, the going rate at (b) will only cover you up to 39 hours a week.  And unlike the general minimum threshold, the going rate can and must be pro-rated all over the place.

If your sponsored employee will work 35 hours per week, the going rate is pro-rated down and calculated as follows:

[going rate for the occupation] ÷ 39 x 35

And if they work 48 hours per week, we pro-rata upwards:

[going rate for the occupation] ÷ 39 x 48

(c) Hourly Rate

I said above that you must always pay your sponsored worker at least £10.10 an hour, and that’s true but deceptively simple.

If your going rate is high it will push your required hourly rate above £10.10 per hour, which can mean that £10.10 per hour gives you a false sense of security.  You’ll see from the going rates table that the Home Office has also indicated minimum hourly going rates, which in many cases are much higher than £10.10 per hour.

Some examples might help:

Example 1

Company X wants to sponsor Katie, a US citizen, as a Construction Supervisor under SOC code 5330.  Katie will work 42 hours per week.  Company X must pay Katie an amount equal to or greater than each of the following:

  • the general minimum threshold of £25,600;
  • the going rate for code 5330, which is £31,400; and
  • £10.10 per hour.

Remember that (a) doesn’t start moving around until we’re higher than 48 hours a week, so we don’t need to alter it for Katie.

However, (b) needs to be pro-rated for anything that isn’t 39 hours a week.  Let’s do that:

£31,400 ÷ 39 x 42 = £33,815

And finally, let’s have a think about the hourly rate.  If Katie works 42 hours a week at £33,815 gross per annum, she’ll be earning a notional hourly rate of £15.48, which is also the hourly rate set by the Home Office in its going rates table.  I got to £15.48 by doing the following:

£33,815 ÷ 42 (hours per week) ÷ 52 (weeks per year) = £15.48

Taking all of the above into consideration, Company X will need to pay Katie a minimum salary of £33,815 gross per annum, based on a working week of 42 hours.  This ticks (a), (b), and (c).

Example 2

Company Y wants to sponsor Rosie, an Italian citizen, as an Ecologist under SOC code 2141.  Rosie will work 45 hours per week.  Company Y must pay Rosie an amount equal to or greater than each of the following:

  • the general minimum threshold of £25,600;
  • the going rate for code 2141, which is £23,600; and
  • £10.10 per hour.

At first glance, it looks like Company Y will be able to pay Rosie £25,600 gross per annum, since this is the highest of the three figures.  However, the going rate at (b) must be pro-rated upwards as follows:

£23,600 ÷ 39 x 45 = £27,231

Rosie must actually be paid £27,31 gross per annum in order to meet both the general minimum threshold and the going rate as adjusted.

All making sense?  Let’s throw in some more complexity.

Everything we’ve talked about so far in this section is the standard position if no reductions apply.  The Home Office calls that Option A.  Lucky us(!), there’s also Options B through F to worry about.

Option B – relevant PhD

You may be able to pay less if the person you want to hire has a PhD. The requirements are that:

  • The individual has a relevant PhD or other academic doctoral qualification (or overseas equivalent); and
  • The job is ‘eligible for PhD points’ – again you will need to refer to Appendix Skilled Occupations to see if the job is eligible. A surprising number of jobs which you might not think of as PhD level, are in fact eligible.

Note that you will need to give a ‘credible explanation’ as to why the PhD is relevant to the job. This explanation should be given at the point at which you assign the certificate of sponsorship.

If these PhD criteria are met, then you can pay a minimum of £23,040 or 90% of the going rate.

Option C – relevant PhD in a STEM subject

If the person you want to hire is doing a job which is eligible for PhD points and has a relevant PhD or other academic doctoral qualification in STEM, then the general minimum threshold is £20,480 or 80% of the going rate, whichever is higher.

Option D – shortage occupation

If the job is on the shortage occupation list, then again lower minimum thresholds apply. To check whether a job in on the shortage occupation list, check here.

If the job is on the shortage occupation list, then the general minimum salary threshold is just £20,480 and you must pay either that or 80% of the going rate, whichever is higher.

Option E – new entrant

If the individual you want to sponsor meets the criteria to be classed as a ‘new entrant’, then you can pay less.  We’ve set out the criteria below, but it gets quite technical in places.  There’s also a requirement to leave a sponsor note after you’ve assigned a CoS to a new entrant, explaining how they meet the criteria.

If you’re looking to sponsor someone as a new entrant, you should consider taking legal advice.  We’ve also written more on the subject in our specialist article: Sponsoring a Skilled Worker Under the New Entrant Rate.

The most common ways to meet the new entrant criteria are where the person:

  • is aged under 26 at the time they apply for their Skilled Worker visa;
  • is a ‘recent graduate’ – this means someone whose current or most recent grant of leave was as a student / Tier 4, and that leave expired not more than two years prior to the date of the Skilled Worker visa application. The individual must have been studying at degree level or above, and must:
    1. have completed the course;
    2. be applying no more than three months prior to expected completion of the course; or
    3. be studying a PhD and have completed at least 12 months’ study in the UK towards that PhD; or
  • holds valid permission to stay under the Graduate route, or their most recent grant of leave was under the Graduate route, which expired less than two years prior to the date of the Skilled Worker visa application (unless the individual has since held leave as a visitor).

If one or more of the above are met, you can pay a minimum of £20,480 or 70% of the going rate.

New Entrant – Example

ABC Co Ltd wants to sponsor Corinne, a Singaporean citizen, as a Web Designer under SOC code 2137.  Corinne will be 23 when she applies for her Skilled Worker visa, and she will work 40 hours per week.

ABC Co Ltd must pay Corinne an amount equal to or greater than each of the following:

  • the reduced general minimum threshold of £20,480;
  • the going rate for code 2137, which is £18,200; and
  • £10.10 per hour.

The general minimum threshold is unchanged for a 40-hour working week.  The going rate, pro-rated upwards for a 40-hour working week, is £18,667.

Option F – health or education

An applicant with a job in a listed health or education occupation can be paid a minimum of £20,480 or the going rate for the occupation code, whichever is higher.  The list of eligible jobs can be found here.

Part B: Key Personnel – Who can manage the licence?

When you apply for a licence you must nominate certain key personnel. There are various key personnel roles to fill, although these can all be filled by the same person. Whether you will split these roles across different people, or indeed in the case of Level 1 Users have multiple appointees, depends on factors such as the size of your organisation and numbers you are likely to sponsor.

There are three key roles, as follows:

The Authorising Officer

The Authorising Officer has overall responsibility for the licence.  The Authorising Officer does not have access to the sponsor management system, the web-interface through which the licence is administered, unless also appointed as Level 1 User. The Authorising Officer decides who should be a Level 1 User (or Level 2 User).

The Authorising Officer should be ‘the most senior person in your organisation responsible for recruitment’. This allows the employer some leeway, with often either a director or head HR taking this role.

The Level 1 User

The Level 1 User is responsible for the general administration of the licence and has access to the sponsor management system. Although you can only appoint a single Level 1 User when you apply for a licence, you can appoint additional Level 1 Users once granted a licence.

The Home Office cautions against having more Level 1 Users than you need, yet also states ‘you should make sure you have at least enough to be able to cover periods of sickness or leave’.

Aside from rare exceptions, you must always have a Level 1 User that is a ‘settled worker’.

You must have at least one Level 1 User that is an employee, director or partner.

In addition, you can optionally add a Level 2 User. A Level 2 User role is similar to a Level 1 User but with fewer administrative privileges.

Explainer: What is a ‘settled worker’?

louis macwilliam - head of immigration

A settled worker includes someone who is:

  • British
  • An EU national who arrives in the UK before 1 December 2020
  • People granted status under the EU Settlement Scheme (pre-settled or settled status)
  • UK Ancestry visa holders

Key Contact

The Key Contact is, as the name suggests, the contact between the Home Office and your company.

You will need to nominate your Authorising Officer, Level 1 User and Key Contact, when you apply for your licence.

Suitability and background checks

Bear in mind that the Home Office will carry out background checks on key personnel. They are concerned about criminal records and prior immigration issues. Full details are outside the scope of this guide but, if you have any concerns in this regard, do not apply for a licence without getting this side fully checked out. You may contact us for advice.

Part C: Certificates of Sponsorship

What is a Certificate of Sponsorship?

A Certificate of Sponsorship (CoS) is a virtual document which an employer assigns to their new hire in order to sponsor them.  Once assigned, the worker can use a unique code from the CoS to apply for their work visa.

When you obtain your licence, you will not automatically be granted Certificates of Sponsorship.  You need to request them, and the process for doing so depends on which type of certificate you need.

Further, there are deadlines relating to Certificates of Sponsorship.  Most importantly, you must assign a CoS within three months of allocation, and the worker must apply for their visa within three months of being assigned a CoS.  More on that below in the section: Know Your Deadlines and Timescales.

Types of Certificate

There are two types of CoS: defined and undefined.  It’s important to understand which one you need – assigning the wrong one is a specific basis on which the Home Office can revoke your licence.

Before the December 2020 changes, defined and undefined certificates were known as restricted and unrestricted certificates, respectively.

Defined Certificates

You need a defined CoS where your migrant worker will be overseas when they apply for their work visa.  You can only apply for a defined CoS after the licence is granted.  Defined certificates are not subject to an annual allocation, and you can apply for them at any time during the life of the licence.

It normally takes a week for the Home Office to decide an application for a defined CoS.  That said, we are increasingly seeing the Home Office request further information before it makes the decision, which can delay the process.

Undefined Certificates

You need an undefined CoS where your migrant worker will be in the UK when they apply for their work visa.  This is usually the case where your migrant worker is here on a different visa (e.g. student), and switches into the Skilled Worker route.

Undefined certificates are subject to an annual allocation.  You first apply to set your annual allocation when you apply for the licence itself.  You can then apply to increase your annual allocation at any time during the life of the licence, although there’s a standard wait time of 13 weeks for a decision on increasing your allocation.  A priority option will cost an additional £200 and bring the wait time down to five working days.

Undefined certificate of sponsorship Defined certificate of sponsorship
Which one do I need? If sponsoring someone who already has permission to be in the UK (e.g. a visa in another category) If you are sponsoring someone from outside of the UK
Key features of each You can request an allocation of certificate(s) and then assign them to the individual as when the need arises

You can apply for an undefined certificate of sponsorship when you apply for a licence

You cannot request a defined certificate of sponsorship when applying for a licence

Must make specific request giving details of individual, and role to fill

‘Straightforward’ applications should be approved within one working day

How long should I sponsor for?

You can sponsor any individual for up to five years in the first instance. Bear in mind that the individual should qualify for settlement (indefinite leave to remain) after completing five years as a skilled worker. There are pros and cons associated with shorter and longer periods of sponsorship.

If you are liable to pay the Immigration Skills Charge, then there are significantly greater upfront costs if you sponsor for a longer duration, as the charge is either £364 or £1,000 per year (depending on the size of your business, see below section on costs). The individual you are sponsoring also pays more up front, with the Immigration Health Surcharge £624 per year. Also, the visa fee doubles if sponsorship is greater than three years. For more detail around costs, see below. You might also not want to ‘commit’ to sponsorship for a long duration, as you will want to see how individual performs at the job.

On the other hand, if you sponsor for the full five years, then it is administratively easier for all parties, as you would not need to apply for another certificate of sponsorship and the individual would not need to apply for a visa extension. It is also worth bearing in mind that if the sponsored individual is not up to the job, or terminates early for whatever reason, then you would receive a reimbursement for any ‘unused’ portion of the Immigration Skills Charge, and the individual would receive an apportioned refund on the Immigration Health Surcharge.

Often, when we talk through the pros and cons of a shorter or longer initial period of sponsorship, my clients will opt for a three-year period, but this is a decision for the business, in conjunction with the individual.

For more on the question of sponsorship duration, and the factors which may affect your decision, see our blog: How Long Should I Sponsor my Skilled Worker for?

Part D: How do I show the job is ‘genuine’?

What does the Home Office want to know?

Since 1 December 2020, the resident labour market test has been abolished.  This was a Home Office-mandated recruitment exercise by which you previously showed that no ‘settled worker’ could do the job.  It was time-consuming and laborious, and we haven’t missed it.

Last year we speculated that, in the absence of the resident labour market test, the ‘genuineness’ of a vacancy was likely to take centre stage.  From what we’ve learned this year, it feels like this speculation was right.

All that remains of the resident labour market test is the requirement to show a genuine vacancy, and the best way to do this is through some form of advertising.  A big part of what we do for our sponsor licence clients is reviewing adverts and advising on how to meet this requirement, and we’re proud to say we’ve had plenty of licences granted on the strength of our advice.  Read on below for more information, and get in touch if you’d like us to review your advertising too.

Do I have to advertise?

In short, usually yes.  It’s not exactly clear in the main sponsor guidance documents, but this extract from Appendix A is telling:

“If you have not advertised for the job and the person you wish to employ is not currently working for you, you should confirm how you identified that this person was the most suitable for the job”.

So there’s a pretty strong general expectation that you will need to advertise for the position, although you no longer need to go through the strict formalities of the resident labour market test.

Appendix D elaborates further, suggesting that you should retain on file a record of applicants, interview notes, your chosen candidate’s CV, and any other relevant information or evidence of how you arrived at the decision that your worker-to-be-sponsored was the best person for the job.

Where the individual you want to sponsor has already been working for you, there’s no need to advertise.  Instead, you should include with your application three months’ payslips demonstrating the existing relationship.

What about the job description?

Adverts and job descriptions normally go hand-in-hand, and the Home Office will expect to see a copy of your job description for the role to be sponsored.  You should submit a copy with your licence application, and you will need to give details again when you apply for and assign Certificates of Sponsorship.

Your job description should therefore be well thought out from the start, as the Home Office will hold you to it as you move through the process of sponsoring workers.

Here’s our advice:

  • The job description should match that which is recognised by the Home Office, available here by entering the SOC code into the first box.
  • The job description should also match the duties to be performed by your sponsored worker on a day-to-day basis. The Home Office is particularly concerned that the sponsored worker should not be doing work outside their designated occupation code, particularly not ‘lower-skilled’ duties.  The Home Office will be on the lookout for job descriptions which appear exaggerated, and if you are inspected you can expect a close examination of the exact duties that any sponsored migrant has been performing.

Part E: Know your deadlines and timescales!

There are various sneaky deadlines/time limits which, if you are not aware of and have not factored in, can seriously undermine your plans. You should also be aware of general processing times.

Here is what you need to know:

  1. As the resident labour market test is gone, there is no need to allow for a minimum 28-day recruitment exercise. However, as explained above, often you will still need to show you have tried to recruit domestically before sponsoring, so any recruitment exercise may need to be factored in.
  2. The Home Office processes 8 out of 10 applications within eight weeks, and we’re commonly seeing decisions being made at around that eight-week mark. Priority service is available but difficult to obtain – for more on that weird process, see our article: Priority Service for Sponsor Licence Applications. An important caveat to all of this is that, if the Home Office visits you before they grant the licence, your application can be delayed by several months.
  3. If you need a defined certificate of sponsorship, then this would need to be applied for after you are granted a licence. Straight forward decisions should only take 24 hours, but it can take up to a week.
  4. A defined certificate of sponsorship must be used within three months of allocation, otherwise it will be removed from your account.
  5. Once the certificate is assigned to the individual then he or she must apply for his or her visa within three months.
  6. Note that the migrant cannot apply for their visa more than three months prior to the ‘start date’ as recorded on the certificate of sponsorship.
  7. In terms of the visa processing, there is a three-week wait for a decision. However, an individual can pay for the Priority Service and get a decision within five working days. A visa application from within the UK is eight weeks or five working days if paying Priority Service. One working day if they buy Super Priority service.

If you are applying for a sponsor licence with a view to hiring a specific individual, then it takes some careful planning, to work out when you need to apply for a licence and when your prospective sponsored employee can start work.

At Truth Legal, as part of our service we will help you to plot a road map to sponsoring an individual.

Part F: Sponsor licence compliance

What is sponsor licence compliance?

When the Home Office talks about sponsor licence ‘compliance’, it is talking about those duties and responsibilities you agree to take on when you apply for a licence. The Home Office takes compliance very seriously, which is why you are supposed to be well versed in the Home Office’s 63-page document on this very issue (you are also supposed to be familiar with all of the other guidance documents!).

In allowing organisations to sponsor, the Home Office considers the sponsor to have taken on certain responsibilities around ‘keeping tabs’ on the migrant. You need to show the Home Office that it can trust you.

Compliance is for life (…time of a licence)

When applying for a licence, most employers are at least dimly aware of a need to ‘get HR in order’. Depending on your profile, you may be more or less likely to be inspected before the Home Office grants a licence, known as a pre-licence inspection. Because of the risk of a pre-licence inspection, you should have adequate systems in place from the word go.

Many sponsors manage to avoid a pre-licence inspection but then fall into the trap of forgetting about their sponsor duties. This then causes major problems down the line; when you are told that you will be inspected with limited advance notice.

Our advice therefore is to ensure you have a proper understanding of compliance and have appropriate systems in place when you apply for a licence.

As part of our service, we will provide a quick reference guide to your sponsor licence duties, tailored to your business.

When is a pre-inspection visit more likely? Risk factors:

louis macwilliam - head of immigration

  • If you are recently incorporated or trading
  • Business is at your personal address/virtual office
  • If you in a ‘high risk’ sector, e.g. hospitality
  • You are sponsoring someone related to an existing employee
  • You have had previous immigration issues
  • Other information provided in the application which casts doubt

Key areas of compliance

Some of the key areas of sponsor licence compliance are below – although the Home Office expect you to be familiar with its 63 page guidance document.

Reporting duties

There are various changes you must report to the Home Office and these attract either a 10-working day or 20-working day deadline to report. There are many changes in circumstances that you must report to the Home Office, but to give a few examples:

  • If your sponsored employee is absent from work for more than 10 consecutive days without permission (report within 10 working days)
  • If you stop sponsoring the employee (10 working days)
  • A change in the employee’s location (10 working days)
  • If you sell all or part of your busines (20 working days)

Record keeping duties

Again, it is beyond the scope of this guide to go through all your record keeping duties and, frankly, this is not the most interesting of topics. However, compliance is one of the most important ones and a key focus of any inspection.

The record keeping duties are set out in the general guidance, as well as in a new document I have not mentioned before, Appendix D.

Sanctions for non-compliance

Licence refusal

There are serious repercussions if you do not comply with your sponsor licence duties. If you are at the stage of applying for a licence, then a failure to comply will likely lead to a sponsor licence refusal. If you are refused, then you will normally be subject to a six-month ‘cooling off period’, during which you cannot reapply. A refusal, as well as the subsequent cooling-off period, can be fatal to your recruitment plans.

Sponsor licence suspension or revocation

As I mentioned, a common mistake made by licence holders, is to apply for the licence and then to basically forget about or neglect the ongoing compliance duties. This can be disastrous both for the business and the individual sponsored.

If you already have a licence in place and are found to be in breach of your sponsor licence duties, then you might receive notification that your licence is being suspended. During the suspension, you can continue to sponsor any individual but cannot sponsor new ones. The Home Office will then decide whether to reinstate, downgrade or revoke your licence.

The Home Office will usually revoke, rather than downgrade. If your licence is revoked, then you must stop sponsoring any individual. The individual will then have their visa curtailed, usually leaving them with insufficient time to find an alternative immigration route, and thereby requiring them to leave the UK.

If the licence is revoked then you will normally have a 12-month ‘cooling-off period’, during which you cannot apply for another licence (and any subsequent licence application will come in for extra scrutiny).

Preparing for a compliance visit

The Home Office aims to ‘visit’ all licence holders at some point. I should say that although the Home Office uses the word ‘visit’, I would suggest ‘inspection’ or ‘audit’ would be a more accurate description of what takes place. You can either be visited before being issued with a licence, or after.

During the visit, a Home Office compliance officer will hold in depth interviews with the Authorising Officer and Level 1 User (if different), as well as any sponsored migrants.

The Home Office will be meticulous in examining the role any sponsored migrant is (or will be) undertaking, with a view to assessing whether the role is genuine. They will want to know that you are complying with your record keeping and monitoring duties. They will want to know what systems you have in place to check your sponsored migrant’s contact details, and how you are complying with your Right to Work checks.

How Truth Legal can help you to become compliant

At Truth Legal, we help you to become compliant. If you instruct us to help you with your sponsor licence application, then during our detailed consultation we will highlight the key compliance issues as they apply to your organisation. We can discuss ways in which you can devise compliant HR systems. We will also provide you with a quick reference guide to your sponsor licence duties, tailored to your business needs.

Our HR Compliance Package

To help you implement compliant systems, we offer an HR Compliance Package. This cost-effective package gives you the necessary tools to prepare key folders of evidence, so you have all your documents in a convenient place, ready to present to the Home Office. These folders will also incorporate key areas of Home Office policy, which should show any inspecting officer that you are on top of things.

Many of our clients have opted for the HR Compliance Package prior to a visit and have fed back how essential this was in preparing for, and passing, the inspection.

Mock-audit

We can carry out a mock-audit of your HR systems to check compliance. We will then write an Action-Plan to let you know which areas are compliant and which need improving. We can conduct audits on-site or remotely.

Making representations and judicial review

If you have had a sponsor licence application refused, or if your licence is at risk of revocation, then we can help. We will review your case and decide on the best approach. Often we find that writing a detailed letter (making ‘representations’) on your behalf leads to a positive outcome.

Where necessary, we will write a letter before claim and run judicial review proceedings.

If you want to discuss how you can become compliant, contact us today.

Part G: Applying for a sponsor licence

By the time you are ready to apply for a sponsor licence you should either have identified a specific role you wish to sponsor or have identified the types of roles you are likely to sponsor. You should also be familiar with sponsor licence compliance and have implemented appropriate systems, where possible. You will also need to be clear on who will act as key personnel.

Importantly, you should also have given careful attention to how you can show the vacancy is genuine, or that you are likely to have genuine roles to fill.

If you have covered all the above, then you should be ready to prepare the application itself.

4-Step Guide to Applying for a Sponsor Licence

Everything is done online, and there is no need to submit original documents or certified copies unless specifically requested. You will need to email electronic copies of your supporting documents after submitting the application, or we can do that for you.

Step 1: Get your documents ready

The Home Office document Appendix A tells you which types of documents you will need to support your application. Appendix A is not particularly user-friendly. You have to work your way through a series of ‘tables’ to work out which documents you need. Once you have identified four documents then you have enough, although it’s always our advice to submit as many documents from the list as you can. Four is good, five or six is better, seven or eight is better still.

Beware that some documents are mandatory. For example, if you are a start-up (defined as operating or trading for less than 18 months) then you must include bank statements or a letter from your bank. If you are a franchise, then you must send a franchise agreement signed by both parties. If you are a food business then you must provide evidence of registration/approval by a food authority, such as evidence of your ‘Scores on the Doors’ rating. If you have audited accounts, then these must be submitted.

And do not forget the hierarchy chart! This must detail any owner, director and board members. If your organisation has 50 employees or fewer, then you must include the name and title of each staff member.

As part of our service, we’ll review your evidence in full, identify any gaps or shortcomings, and then help you fix them. Better to hear it from us than the Home Office!

Step 2: Write your cover letter

We are often asked ‘Do I need to write a cover letter?’, to which our answer is a resounding ‘yes!’. If you instruct us to help you with the application process, then we consider this to be perhaps our most important task. There are two reasons why you need a good cover letter.

Reason 1: You must submit mandatory information

If you are applying under the Skilled Worker category, then you must submit certain mandatory information as requested in Appendix A. If you do not provide mandatory information then your application will probably be rejected, so getting across this information is just as important as providing the supporting documents.

Our approach is to include this information in a cover letter.

Reason 2: Your cover letter allows you to paint a picture

Your cover letter also gives you the chance to build a compelling case for why you need the licence. You might set out your company background in a glowing light. Perhaps you want to highlight past difficulties recruiting or explain how an individual you want to sponsor has previously contracted for you, or explain your expansion plans.

Step 3: Complete the online application

Once you have your documents ready, you can submit the online application. You can apply for the licence here: https://www.gov.uk/apply-sponsor-licence

If we’re on board, we’ll complete the application on your behalf. We’ll also enter our own details as your legal representatives.

Step 4: Send supporting documents by email

Once you have submitted your online application, then you will need to print off a ‘Submission Sheet’, which you will need to email to the Home Office, along with the rest of the supporting documents. You have five working days to email your documents.

The Home Office asks that you submit all documents in PDF form and that all attachments are suitably labelled, using no more than 25 characters.

Part H: Niche sponsor licence issues

Can I sponsor a family member?

A common question we are asked, is whether it is possible to sponsor a family member. The answer is ‘yes’, but it is complicated, and you will need to make important allowances.

Prohibition on a Level 1 or Level 2 User assigning a certificate of sponsorship to a family member

In terms of the outright prohibitions on sponsoring family members, the only categorical ban is on ‘SMS users’ assigning a certificate of sponsorship to a ‘close relative or partner’. ‘SMS users’ means a Level 1 or Level 2 user. ‘Close relative or partner’ is interpreted widely, to cover:

  • a spouse, civil partner or unmarried or same-sex partner
  • a parent or step-parent
  • a son or step-son
  • a daughter or step-daughter
  • a brother, step-brother or half-brother
  • a sister, step-sister or half-sister
  • a nephew, niece, cousin, aunt or uncle. father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law or daughter-in-law

Taken at face value, this prohibition merely restricts the Level 1 or 2 User from undertaking the specific act of assigning the certificate of sponsorship to the family member. Therefore, this provision does not necessarily preclude a family member from acting as Level 1 User. For example, it might be possible to appoint multiple Level 1 Users or another Level 1 or 2 User to undertake the specific act of assigning the certificate.

Appointing a different Level 1 User can be difficult for certain businesses, particularly smaller ones. There are other requirements which create further hurdles, such as the requirement that you must always have a Level 1 User that is either a director, partner or employee. You must also have at least one Level 1 User that is a ‘settled worker’.

Possible ways around this include appointing a legal representative as your Level 1 User, or appointing an ‘employee of a third-party organisation engaged by you to deliver all or part of your HR function’.

Requirement to disclose to the Home Office if you assign a certificate of sponsorship to a family member

You must also disclose to the Home Office if you assign a certificate of sponsorship to a family member of anyone within the sponsor organisation if your organisation is classed as a small or medium business. If it is a large business then duty is only if you are ‘aware’ you are assigning a certificate to a family member of someone within your business. Disclosure is made by way of a sponsor note. For a definition of what is classed as a small/medium or large business, see here.

Expect scrutiny

Even if you navigate these tricky issues, you can expect to be closely scrutinised by a suspicious Home Office, if you sponsor a family member. A likely point of attack by the Home Office, is the ‘genuineness’ of the role and so you will need to have this aspect clearly covered.

In summary, sponsoring a family member is in theory possible, but you must make key adjustments and even if you make those adjustments, you will have to be ‘whiter than white’ in all compliance matters. You should take legal advice before going down this tricky route.

There’s lots more information on this in our article: Can I Sponsor a Family Member Under a Home Office Sponsor Licence?

Can I be sponsored by a business I own?

Can a company I own sponsor me under a Skilled Worker licence? Again, the answer is yes, on paper, provided you pay careful attention to the limitations of doing this and are prepared for extra scrutiny.

Two changes make this more doable. First, the abolition of the resident labour market test clears a potentially awkward hurdle. Second, there used to be a general prohibition on tier 2 visa holders owning more than 10% shares in their sponsoring company. There is no such restriction under the Skilled Worker route.

However, other challenges remain. First, your business must be ‘operating or trading’ before it can get a licence. So you may need to enlist help to establish the business in the UK, if you wish to set up a new business, or you might be able to do limited work on a business visitor visa.

You would need to have suitable persons in place to act as the Authorising Officer and Level 1 User, as you could not take on these positions. This is a tricky area; you should contact us if you want to go down this route.

Part I: Dealing with a rejection or refusal

The difference between a ‘refusal’ and a ‘rejection’ of a sponsor licence application

louis macwilliam - head of immigration

  • A refusal means the Home Office is not satisfied that you can meet the requirements of sponsorship. You will normally be subject to a ‘cooling off’ period during which you cannot reapply – normally six months or more. You will not be refunded.
  • A rejection is the lesser of two evils. It follows from you not submitting some mandatory information or evidence. You will normally receive a refund and you can re-apply straight away

Receiving a negative decision can come in two forms: a rejection or a refusal, and it is important to understand the difference between the two.

If you have been refused then there will normally be a ‘cooling-off’ period, during which you cannot reapply, usually six months, sometimes longer. There is no right of appeal against a refusal and no formal process to request a reconsideration.

However, at Truth Legal we have had success in persuading the Home Office to overturn refusals and cooling off periods, by making detailed representations on our clients’ behalf.

Alternatively, it might be a case of making a new application, addressing any points of refusal. Again, at Truth Legal we are experienced at helping you to build a compelling case, in circumstances where you have previously been refused or had other issues. If you have received a rejection or a refusal, then contact us and we can advise you on the best course of action.

Part J: How much does sponsorship cost?

There are various costs involved with sponsorship. Some of these must be borne by the employer. Other costs are the liability of the sponsored individual.

Below is a brief summary but, for our full analysis, read our article: Sponsor Licence Costs: Everything You Need to Know.

Note that some of the sponsor fees vary depending on whether the employer is a charity/small business or a medium/large business. You are a small business if two of the following apply:

  • your annual turnover is £10.2 million or less
  • your total assets are worth £5.1 million or less
  • you have 50 employees or fewer
Employer costs Individual’s costs
Sponsor licence (one off fee) £536 (charity/small), or

£1,476 (medium/large)

n/a
Cost of one certificate of sponsorship £199 n/a
Immigration Skills Charge £364 (charity/small), or

£1,000 per sponsored migrant per year *

n/a
Skilled Worker visa n/a £625/£1,235 if sponsored for less/more than three years and applying from overseas,

or

£719/£1,423 if sponsored for less/more than three years and applying from within the UK **

Immigration Health Surcharge n/a £624 per year of the visa (e.g. a three year visa would be=£1,872

* only applies if sponsoring from overseas on a defined certificate of sponsorship. Sponsoring on an undefined certificate does not incur this charge

** lower fees apply if the job in on the shortage occupation list and/or if the visa is a ‘Health and Care Visa’

Truth Legal exhibiting UK Care Week July 2022

Truth Legal – Sponsor Licence Experts

We hope you’ve found this guide useful. We’ll continue to update it as we spend more and more time navigating our way through the new Skilled Worker system.

We’re doing these applications day in, day out, and we have no hesitation in describing ourselves as sponsor licence experts.

If you instruct us, we won’t let you submit an application until we’re confident of success. Our services are priced competitively under an innovative staged approach, which puts you in control of your own fees.

If you’d like us on board, you can start the process here with a free consultation.

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