Over the last few years, reports of labour shortages across a range of sectors in the UK have continued to increase, impacted by both Brexit and the Covid-19 pandemic. As a result, more and more businesses are looking to broaden their recruitment pool by employing individuals from overseas. Some businesses may assume that applying for and obtaining a visa is the sole responsibility of the employee, but this is only true to a certain extent. In fact, all foreign nationals seeking entry to work in the UK first require to be sponsored by their employer, which in turn means that the employer must hold a sponsorship licence.
Sponsor Licences are granted by the Home Office and must be applied for by the business itself, rather than the potential employee. There are various eligibility and suitability criteria to be met; the business must be a genuine organisation trading in the UK, its key actors must be honest, reliable and dependable, there must not be a history of non-compliance with immigration rules, and the Home Office must be satisfied that the business will be able to fulfil its sponsorship duties. Generally, the Home Office has broad discretion to investigate and scrutinise the activities of any business applying for a Sponsor Licence.
There are two types of licences: Worker Sponsor licence and Temporary Worker Sponsor licence. The difference is that the sponsor licence for “Workers” is to sponsor non-UK nationals for skilled or long-term employment and “Temporary workers” are for specific types of temporary employment, such as seasonal agricultural work. Currently, the most commonly applied for work visa under the new Points Based System is the Skilled Worker visa, which is open to overseas nationals who have received a job offer in a skilled, long-term role in the UK from a sponsored employer. Conversely, the Scale-up Sponsor Licence is the least used, although this is most likely due to that route only being recently introduced on 22 August 2022.
Once a job offer has been secured, the overseas candidate must then obtain a Certificate of Sponsorship from the employer. There are two types of Certificate of Sponsorships: -
- an Undefined Certificate is for those applying from within the UK; and
- a Defined Certificate is for those applying from outside of the UK.
Each sponsor will only have a set number of Undefined Certificate of Sponsorships to use as set by the annual allocation granted by the Home Office whereas Defined Certificate of Sponsorships are awarded on a case by case basis by the Home Office. The Home Office will allow sponsors to apply for an increase of their annual Undefined Certificate of Sponsorship allocation at any point but this can take potentially up to 18 weeks for the increase to be granted. In this respect, it is important for employers to consider their business needs before applying for a Sponsor Licence, and they should have a realistic recruitment plan in mind.
A Sponsor Licence is valid for up to four years but can renewed by submitting a further application to the Home Office. The cost of applying for a Sponsor Licence depends on the size of the business. A small or charitable sponsor will be charged £536 for a Worker licence, while a medium or large sponsor will be charged £1,476. The application fee for a Temporary Worker licence is £536 regardless of the size of the business, and a joint Worker and Temporary Worker licence costs £536 or £1,476 respectively. The application decision-making process is approximately 8 to 10 weeks on average; however, there is the option of applying for a priority service when you apply for a sponsor licence for an additional fee of £500. This service is not always available as a maximum of 30 priority service requests will be accepted per day.
The Home Office will assess if the organisation is a small or charitable sponsor by determining if at least 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
In addition to the application fee and the fee for each Certificate of Sponsorship, sponsors may be required to pay an Immigration Skills Charge to sponsor a worker. This is only applicable to individuals applying for a Skilled Worker or Senior or Specialist Worker visa. For a small sponsor, this is £364 for the first 12 months of sponsorship, and for each 6 months thereafter, this decreases to £182. Larger sponsors must pay £1,000 initially, which then reduces to £500.
The Home Office have stressed that sponsorship is a privilege, not a right and as such, it is important, as a Sponsor Licence holder, for your business to be aware of its duties and responsibilities under Immigration law and wider UK law. The Home Office will consider whether a business has the necessary HR infrastructure in place when deciding whether to grant a Sponsor Licence, and compliance checks can be carried out at any time during the application process and for the duration of the Sponsor Licence.
Applying for a Sponsor Licence can be a complicated process, and it is important to get it right first time. There is no right of appeal against a refusal of a Sponsor Licence application and a refusal from the Home Office will normally mean that you will not be refunded the application fee and could ultimately lead to a six to twelve months’ cooling off period where the business will not be able to apply for a further Sponsor Licence application. At Thorntons, we have extensive experience of assisting clients in successfully obtaining and managing their Sponsor Licences, and we are always on hand to help with any difficulties along the way.
If you would like any further information and advice in respect of applying for or managing a Sponsor Licence, or have any other questions relating to Immigration Law, please contact our specialist Immigration team on 03330 430350.
