What is a Sponsor Licence?

A Sponsor Licence, also referred to as a Sponsorship Licence, allows UK businesses to employ skilled workers from outside the UK. Organisations with this licence can issue Certificates of Sponsorship (CoS) to eligible foreign nationals, whether they are applying from within or outside the UK. Educational institutions, such as universities, must also obtain a sponsor licence to recruit international students.

As of April 2024, businesses will no longer need to renew their sponsor licence every four years. Instead, licences with an expiry date on or after 6 April 2024 will automatically be extended for 10 years. However, licences expiring before this date will still need to follow the previous renewal process. Previously, licences were issued for a four-year term, requiring businesses to renew before expiry.

From 1 January 2025, sponsor licences will be revoked if an employer attempts to recover any sponsorship fees that they are responsible for paying. This includes the sponsorship licence fee, the Certificate of Sponsorship fee, and the Immigration Skills Charge for Skilled Worker or Senior/Specialist Worker visas.

The sponsor licence application process is stringent, requiring businesses to adhere to a rigorous compliance framework. This involves ensuring that HR policies and procedures align with Home Office requirements to maintain the validity of the licence.

Sponsor Licence Eligibility Requirements

To apply for a sponsor licence, a business must meet the following criteria:

• Be a genuine, legally operating organisation in the UK
• Be UK-based
• Have no history of non-compliance with immigration laws
• Have key personnel who are reliable and trustworthy
• Implement an effective HR system to fulfil sponsorship responsibilities

Business Eligibility Requirements

Organisations applying for a sponsorship licence must be genuine UK businesses operating as a PLC, Ltd, LLP, or Sole Trader. A business must:

• Be registered and legally operating in the UK
• Hold the appropriate planning permissions for its premises
• Maintain a corporate bank account with a UK-registered financial institution

Start-ups can also apply for a sponsor licence; however, businesses operating for less than 18 months must provide evidence of a current corporate bank account with a UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) registered bank.

For certain licence categories, additional requirements apply. For instance, companies applying for a UK Expansion Worker sponsorship licence must not have an active trading presence in the UK, though they must establish a UK footprint.

Sponsor Licence Suitability Requirements

Applicants must demonstrate that they are:

• Honest, dependable, and reliable
• Capable of managing their sponsorship duties
• Compliant with Home Office regulations

A sponsor licence will not be granted if the business:

• Has unspent criminal convictions related to immigration offences or tax evasion
• Has a history of non-compliance with previous sponsorships
• Had a sponsor licence revoked in the last year

Genuine Business Need for Sponsorship

Businesses applying for a sponsor licence must prove that they have a genuine need to sponsor overseas workers. This includes:

• Sponsoring workers only for eligible job roles
• Meeting the minimum skill and salary requirements
• Demonstrating how the sponsored roles align with business operations

The Home Office may assess whether the business genuinely requires foreign workers based on its industry, size, and recruitment needs. While businesses are not required to disclose recruitment details, providing such information can strengthen their application.

Key Personnel for a Sponsor Licence

When applying for a sponsor licence, businesses must nominate individuals to fulfil specific sponsorship duties. These key personnel must:

• Be British or hold a valid UK immigration status
• Have no unspent criminal convictions
• Be on the business payroll

Key personnel roles include:

• Authorising Officer – Senior person responsible for immigration compliance
• Key Contact – Primary liaison with the Home Office
• Level 1 & Level 2 Users – Manage the Sponsor Management System (SMS)

Types of Sponsor Licences for Employers

There are two primary categories of sponsorship licences:

1. Worker Licence – For long-term employment of skilled foreign workers
2. Temporary Worker Licence – For short-term and seasonal workers

Businesses must select the appropriate category when applying. Employers can also apply for multiple subcategories if required.

Worker Licence (Long-Term Employment)

This licence is issued to employers who need to hire skilled international workers on a temporary or permanent basis. It includes sponsorship for:

• Skilled Worker Visa
• Scale-up Worker Visa
• Senior or Specialist Worker Visa (formerly Intra-company Transfer visa)
• Minister of Religion Visa
• International Sportsperson Visa

Temporary Worker Licence

This licence allows businesses to recruit temporary foreign workers, including:

• Charity workers
• Creative sector workers
• Seasonal workers
• Government-authorised exchange workers

Note: Not all job roles qualify for sponsorship. Employers must ensure that sponsored workers meet the UK points-based system requirements and minimum salary thresholds.

Applying for a Sponsor Licence

Steps to Apply

1. Determine the visa categories required
2. Assess business eligibility and ensure HR systems meet compliance standards
3. Assign Key Personnel to manage the Sponsor Management System (SMS)
4. Gather supporting documents
5. Decide on the number of Certificates of Sponsorship (CoS) required
6. Submit the online sponsor licence application
7. Prepare for a Home Office compliance visit (if applicable)
8. Await the decision

Sponsor Licence Fees

Application Costs

A small or charitable sponsor must meet two of the following conditions:

• Annual turnover of £10.2 million or less
• Total assets of £5.1 million or less
• 50 employees or fewer

Certificates of Sponsorship (CoS)

A Certificate of Sponsorship (CoS) is an electronic record that includes details of the job role and employer. There are two types:

1. Defined CoS – For Skilled Worker Visa applicants outside the UK
2. Undefined CoS – For candidates switching visas within the UK

Employers must apply for and issue CoS through the Sponsor Management System (SMS).

CoS Costs

• £25 – £239, depending on the type of licence

Sponsor Licence Compliance & Monitoring

Sponsoring businesses must:

• Maintain HR records (e.g. worker contracts, contact details)
• Report changes (e.g. if a sponsored employee leaves)
• Cooperate with Home Office compliance visits

Sponsor Licence Ratings

• A-Rating – Full compliance
• B-Rating – Restrictions imposed; must improve to regain A-rating
• Revocation – Licence withdrawn for serious non-compliance

Sponsor Licence Renewal

From April 2024, sponsor licences will be automatically extended for 10 years. Licences expiring before this date must follow the renewal process and submit an application through the Sponsor Management System (SMS).

Renewal Fees

• Small businesses/charities – £536
• Medium/large businesses – £1,476