The Home Office has published new guidance for sponsor licence applications. This reflects changes made to UK immigration rules in December 2020, notably, the replacement of the Tier 2 (General) visa route for sponsored employment with the new Skilled Worker visa route. From 1 January 2021, companies must have a valid sponsor licence in order to employ all skilled workers who do not have the right to work in the UK, including EEA and Swiss nationals and their family members, if they have not been granted settled or pre-settled status under the EU Settlement Scheme.
WHAT IS A SPONSOR LICENCE?
A sponsor licence (formerly known as Tier 2 sponsor licence) allows UK-based companies to employ skilled workers who are based overseas or within the UK (applicants can “switch” into the Skilled Worker visa from most other visa types, for example Tier 4 Student and Tier 2 visas).
Once the licence is approved, it will be valid for a period of four years with the option for renewal.
WHAT ARE THE ELIGIBILITY REQUIREMENTS FOR A SPONSOR LICENCE?
To be eligible to apply for a sponsor licence, your organisation must have a UK presence and be operating or trading lawfully in the UK. If you have multiple UK branches you may apply for one licence to cover all your linked UK entities – alternatively, you might apply for separate licences for each branch, depending on your circumstances.
If you are required to be registered with or inspected/monitored by a statutory body to operate lawfully in the UK, you will need to submit proof that you (and any branches covered by the licence) are registered with the appropriate body. You may also need to supply evidence that you hold the appropriate planning permission or local planning authority consent to run your class of business at your trading address.
The Home Office must be satisfied that you are able to offer genuine employment in a skilled occupation and that you will pay the correct rate of salary, as specified by the Home Office.
As part of your licence application, you are pledging to accept all of the duties associated with being a sponsor licence holder.
Private individuals are not normally eligible to be recognised as sponsors, but an exception applies if the individual is a sole trader who wishes to sponsor someone to work in their business.
HOW MUCH DOES A SPONSOR LICENCE APPLICATION COST?
The fee for a sponsor licence depends on the size and type of organisation. This application fee is payable every time the sponsor renews their licence (every four years). Fees are usually reviewed annually by the Home Office which publishes them on its website.
Organisations classified as “medium” and “large” are required to pay a sponsor licence fee of £1,476. This fee would apply to all organisations which do not meet the definition of a “small” sponsor.
An organisation would normally qualify as a small sponsor 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
Registered Charities are also considered to be “small” sponsors.
Organisations classified as “small” sponsors are required to pay a sponsor licence fee of £536.
If you have already been granted a ‘Worker’ sponsor licence (formerly known as Tier 2 sponsor licence) and decide to add a subcategory, there would be no fee. For example, if you hold a Skilled Worker licence (formerly Tier 2 General) and would like to start sponsoring migrants under the Intra-Company Transfer route (formerly Tier 2 Intra-Company Transfer), you’d simply need to submit an application through the Sponsor Management System to add a subcategory – no Home Office fee would apply.
WHAT IS A SPONSOR LICENCE RATING?
There are two sponsor licence ratings:
If you are successful in your sponsor licence application, you will be awarded an A-rating. This is the highest rating and is awarded by the Home Office to trusted organisations which have proved that they have the necessary systems in place to comply with sponsor duties.
A sponsor must maintain their systems and policies in order to maintain their A-rating. The Home Office may re-assess at any time and these compliance visits will determine if an organisation still meets the criteria for an A-rating.
If the Home Office finds that a business is not complying with sponsor duties, it may be downgraded to a B-rating. A B-rated sponsor will need to meet a time-limited action plan to regain their A-rating. If they cannot meet the requirements of the action plan within the specified timeframe, the licence will be revoked.
It should be noted that the Home Office can suspend/revoke a licence without taking the preliminary step of downgrading to a B-rating. The choice of action taken by the Home Office will depend on the seriousness of the breaches which have been identified.
HOW CAN MY ORGANISATION APPLY FOR A SPONSOR LICENCE?
To apply for a sponsor licence (formerly known as Tier 2 sponsor licence), a company is required to submit an application form online along with a minimum of four specified supporting documents as evidence of its trading presence in the UK, in addition to a covering letter to provide background information about the company.
Occasionally, the Home Office may require additional documents such as evidence of the company’s HR processes to assess whether the compliance requirements and sponsorship duties will be met. During an assessment of the licence application, the Home Office may also conduct a compliance visit at the company premises.
Our team can conduct a mock audit of your HR procedures prior to your formal application being made to identify any weaknesses and put in place an action plan to rectify them.