Success Story: How to Apply for a Sponsor License as an Employer 101

The Points Based System (PBS) was introduced in 2008 and is based on employers applying to the Home Office (UK Visas & Immigration) for a Sponsor License and becoming registered sponsors. Once a business is a licensed sponsor, it will be added to the Home Office’s register of sponsors and it can then allocate Certificate of Sponsorships (CoS) to migrants, enabling them to work in the UK in a variety of employment. Under the new Skilled Worker visa route, which has replaced the Tier 2 visa, the number and types of jobs capable of being sponsored has been vastly increased.

Our Immigration Team has recently received several positive results for our clients in applications for Sponsor Licenses. We successfully represented our clients to obtain licenses so that their employees could come and work in the UK.

Sponsor License (formerly Tier 2 Sponsor License)

A Sponsor License, which was formerly known as the Tier 2 Sponsor License, now allows UK-based companies to employ workers who are settled overseas or within the UK (applicants may also “switch” into their current visa i.e., Tier 4 Student and Tier 2 visas into Skilled Worker visa.

Once the license has been approved, the validity will last for up to a period of four years, with an option for renewal thereafter.

What is a Certificate of Sponsorship?

A Certificate of Sponsorship (CoS) is an electronic document generated on the Sponsor Management System (SMS) after the licence is granted.

A company must first request a Certificate of sponsorship from the Home Office to sponsor a migrant employee. Companies will then need to assign it to the migrant employee they intend to sponsor to generate a unique reference number for the employee to submit during their visa application.

What are the eligibility requirements for a Sponsor License?

To be eligible to apply for a sponsor license, your company must be present in the UK and be actively trading or operating lawfully in the UK. You can also apply for one license to cover all the linked UK entities if you have multiple UK branches. Alternatively, it is possible for you to apply for separate licenses for each branch as well.

You will be expected to submit proof that you are required to be registered with or monitored/inspected by a statutory body to operate lawfully in the UK, (and any branches covered by the license) are registered with the appropriate body. You will also be expected to provide evidence that you hold the planning permission or local planning authority consent so you can run your class of business at your trading address.

The Home Office needs to be satisfied that you are in a position to offer genuine employment in a skilled occupation and that you will be able pay the correct rate of salary, as set out by the Home Office.

Private individuals are not usually eligible to be recognised as sponsors, however, an exception can be applied where the individual is a sole trader who is willing to sponsor someone to work in their business.

We have an in-depth understanding of Sponsor License applications and are professional and results-focused. For assistance with any UK immigration law concerns, contact us.

What are the costs for Sponsor License application?

The costs for a sponsor license vary on the type and size of organisation. This application fee is payable every time the sponsor renews their license i.e., every four years. Costs are usually reviewed every year by the Home Office, publishes them on its website.

Companies classified as “medium” and “large” are required to pay a sponsor license fee of £1,476. This fee applies to all companies which do not meet the definition of a “small” sponsor.

A company 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 normally considered to be “small” sponsors. Companies classified as “small” sponsors must pay a sponsor license fee of £536.

What is a Sponsor License rating?

There are two sponsor license ratings:

  • A-rating
  • B-rating

You will be awarded an A-rating, if your sponsor license application has been granted. This is considered to be the highest rating and is awarded by the Home Office to companies which have an efficient system in place to comply with their sponsor duties.

It may also be downgraded to a B-rating, if the Home Office finds that an organization is not complying with their sponsor duties. A B-rated sponsor will then have to meet a time-limited action plan in order to regain their A-rating. The license will be revoked if they are unable to meet the conditions of the action plan within the timeframe,

Notwithstanding, the Home Office can revoke or suspend a license without taking the preliminary step of downgrading to a B-rating. The choice of action taken by the Home Office will entirely depend on the seriousness of the breaches that have been recognised.

How can a business apply for a Sponsor License?

Organisations are required to submit an application form online along with a minimum of four supporting documents as evidence of its trading presence in the UK, in addition to a covering letter to provide background details about the organisation.

Additional documents may also be required by the Home Office such as evidence of the company’s HR processes to examine whether the sponsor duties and compliance requirements will be met. While assessing the application, the Home Office may also conduct a compliance visit at the organisation 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.

What documents are required to apply for a Sponsor License?

You will have to submit a minimum of four specified mandatory documents with the Skilled Worker license application. The list of the required documents is very extensive and will usually depend on whether you are representing a public body, start-up, franchise or SME. Documents are easy to obtain may include:

  1. A chart showing the business hierarchy and where this position is
  2. A job listing / description
  3. Screenshots from the HR system to show that a proper system is in place to:
    3.1.  Monitor employees’ immigration status
    3.2.  Keep copies of relevant documents for each employee, including passport and right to work information
    3.3. Track and record employees’ attendance
    3.4. Keep employee contact details up to date
    3.5. Report to UKVI if there is a problem, for example if an employee stops coming to work
  4. Evidence that the company has employer’s liability insurance cover for at least £5m from an authorised insurer
  5. Proof of ownership or lease of the business premises
  6. Latest corporate/business bank statement and/or a letter from the company’s bank setting, including the nature and duration of its dealings.
  7. HM Revenue & Customs (HMRC) VAT registration certificate confirming VAT registration number and ‘effective date of registration’ if business’ VAT taxable turnover is more than the ‘threshold’.
  8. The company’s latest audited annual accounts with the name of the accountant clearly shown. The accountant should be a member of an accredited accounting body such as ACCA. If the company is legally obliged to submit audited accounts, then these must be provided.
  9. Latest acknowledgement of a Company Tax Return CT620, or the completed CT600 tax return and the CT603 notice.
  10. Evidence of Registration with HM Revenue & Customs [“HMRC”] as an employer to pay PAYE & National Insurance. Provide proof of PAYE Reference Number & Accounts Office Reference Number. Evidence of registration must be original or certified copies of documentation issued by HMRC only.
  11. Current financial report or audited annual report with the name of the accountant clearly shown. The accountant should be a member of an accredited accounting body such as ACA.
  12. Evidence that the company has the appropriate planning permission to operate its type/class of business at its trading address where this is a Local Authority requirement.
  13. We need these staff members’ identity documents: the company needs to appoint people within the business to these 3 roles as part of the sponsor license application.

Please note that this list is not exhaustive. It has to be tailored for each type of organisation and your application will be refused if you do not submit a document mandated by the Home Office. If your application is refused, you will not be able to file another one for at least 6 months and you may get a lower sponsor rating on any subsequent application. It is therefore crucial to seek legal help from an early stage.

What are these roles?

  1. Authorising officer – a senior and competent person responsible for the actions of staff and representatives who use the SMS (Sponsorship Management System).
  2. Key contact – the shop’s main point of contact with UK Visas and Immigration [“UKVI”]
  3. Level 1 user – responsible for all day-to-day management of your license using the SMS

These roles however can be filled by the same person or different people. This is usually the (internally employed) HR manager of the organisation.

We offer complete training in using the SMS to employers for a separate fee. The organization and its chosen member of staff will be checked to make sure they’re suitable for these roles. The organisation may not get its license if anyone involved in sponsorship has:

  1. an unspent criminal conviction for an offence listed in the guidance for sponsors.
  2. been fined by UKVI in the past 12 months
  3. been reported to UKVI
  4. broken the law
  5. been a ‘key person’ at a sponsor that had its license revoked in the last 12 months
  6. failed to pay VAT or another excise duty

The business and the chosen staff member must be based in the UK most of the time, not be a contractor or consultant contracted for a specific project, not be subject to a bankruptcy restriction order or undertaking, or a debt relief restriction order or undertaking. Lastly, not have a history of non-compliance with sponsor requirements.

Procedurally, we will prepare and file the application and correspond with the Home Office on the shop’s behalf and keep it apprised of developments. There may be a compliance visit from the Home Office to interview staff and see those proper systems, as mentioned above, are in place. We offer mock visits for a separate fee.

If the application is made for the Intra-Company Transfer sponsor license subcategory, you must submit evidence of common ownership between the company overseas and in the UK.

Our team can advise on the type you need to apply for and provide a tailored document checklist for you.

There are several types of sponsors license and each type of license will require different supporting documents to be submitted. Our team can advise on the type you need to apply for and provide a tailored document checklist for you. Provided the conditions are met and the evidence is submitted, it will be possible to apply for multiple subcategories of sponsorship license at the same time.

The UK Immigration Rules are complex and a legal representative can help ensure that your application meets the Immigration Rules.

What if the application gets refused?

A six-month cooling-off period will be triggered from the date of the refusal unless there was an error in the Home Office’s assessment of the application. In other words, another application for license cannot be submitted until the end of that period.

We can submit a pre-license error correction on your behalf if there has been a mistake in the decision to refuse your application. However, the next option would be to challenge the decision to lodge a judicial review, if the decision was not overturned after the pre-license error correction.

Our team can expertly advise and represent you in challenging a decision of sponsor license refusal.

For instance, if your application was refused because you were unable to submit requested information or documentation within a specified timeline (for reasons not under your control) you may be able to reapply without waiting.

There are some circumstances where cooling off period may longer. For example, it can be 12 months from the date you paid the penalty in full if you have been issued with a civil penalty for employing an illegal worker. If you tried to reapply during this time, your application would automatically be refused. However, If you have never previously applied for a sponsor license, it is still crucial to check if your company may be subject to a cooling off period before submitting an application for a sponsor license.

Why instruct our immigration team?

Our team of solicitors and barristers are specialist immigration lawyers who act in your best interest. We offer a client-tailored approach from the outset. From the very first meeting, we will be able to advise you in respect of your prospects of submitting a visa application before your application even reaches the Home Office UK Visa & Immigration department. We can assist you with the preparation and submission of your application and ensure that you meet all the requirements under the Immigration Rules.

The benefit of instructing us is that we work with you throughout the entire process to make sure we have the correct documents and file a proper application, so we get it right the first time.

We are based in the legal epicentre of London, just across the road from the Royal Courts of Justice in order to ensure we get the best results for our clients.  We are minutes away from the Immigration and Asylum Tribunal, the Royal Courts of Justice and other Central London courts.

Preparation is the key to successful immigration applications. Our UK immigration and visa solicitors are here to guide you through the complex immigration rules and requirements. If you wish to meet one of our lawyers, please call our Immigration Team so we can assess your case and arrange your legal consultation.

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