UK Sponsorship Licence Costs: A Comprehensive Guide

In the fast-paced realm of international business, the necessity to attract, recruit, and retain global talent is paramount. For UK-based enterprises, a pivotal tool in achieving this is the Sponsor Licence—a gateway to hiring overseas workers. This guide delves into the intricacies of Sponsor Licence costs, breaking down each element for a more profound understanding.

What is a Sponsor Licence?

A Sponsor Licence, also known as a Sponsorship Licence, is an official endorsement by the UK Home Office. It empowers UK businesses to issue Certificates of Sponsorship (CoS) and sponsor foreign workers for a Skilled Worker visa, enabling legal employment in the UK. This post-Brexit era has elevated the importance of Sponsor Licences, making them integral for businesses aiming to tap into global talent pools.

Sponsorship Licence Costs

Understanding Sponsor Licence costs involves navigating through various components. This guide aims to unravel these intricacies, offering nuanced insights for businesses, regardless of their size.

Essential Costs for Employers

  1. Sponsor Licence Fee:
    • Small/Charitable Organisations: £536
    • Medium/Large Organisations: £1,476

Acquiring a Sponsor Licence necessitates payment of the primary Sponsor Licence fee. Small and charitable entities enjoy a reduced fee compared to their larger counterparts.

  1. Certificate of Sponsorship (CoS) Fee:
    • £199 for each CoS assigned

Issuing a CoS, a virtual document outlining job and worker details, incurs a fee. Each sponsored worker requires a CoS, adding to the overall cost for the employer.

  1. Immigration Skills Charge (ISC):
    • Small Businesses/Charities: £364 (first 12 months) + £182 (subsequent 6 months)
    • Medium/Large Businesses: £1,000 (first 12 months) + £500 (subsequent 6 months)

The ISC, an additional cost, aims to incentivise local workforce training. The charges vary based on business size and employment term, forming a significant part of the overall cost.

Worker-Related Costs

  1. Skilled Worker Visa Fee:
    • Outside the UK: £610 (up to 3 years) / £1,220 (more than 3 years)
    • Inside the UK: £704 (up to 3 years) / £1,408 (more than 3 years)

Prospective employees bear the Skilled Worker Visa fee, dependent on the length of stay and application location. These fees contribute to the overall financial considerations for both employers and workers.

  1. Immigration Health Surcharge (IHS):
    • £624 per year (exceptions and discounts available)

The IHS, a fee providing immigrants access to the National Health Service (NHS), adds to the worker-related costs. Certain exceptions and discounts may apply, impacting the overall financial outlay.

Impact of Business Size and Worker’s Origin

  • Business Size:
    • Small Businesses/Charities enjoy fee reductions.
    • ISC varies based on business size.

Understanding the impact of business size is crucial, as it directly influences fees. Small businesses and charities benefit from reduced charges, making Sponsor Licences more accessible.

  • Worker’s Origin:
    • Worker’s nationality can lead to a reduced visa fee.

The nationality of the worker influences the visa fee, potentially reducing costs for certain countries. This factor indirectly affects the overall cost to the business, especially if the company covers the expense as part of the relocation package.

Fee Reductions and Exemptions

  1. Small Business and Charitable Sponsors:
    • Reduced initial Sponsor Licence fee.

Small businesses and charitable sponsors enjoy a fee reduction for the initial Sponsor Licence, making it a more viable option for organisations with limited resources.

  1. ISC Reduction and Exemption:
    • Reductions based on business size and occupation list.
    • Exemptions for specific roles and workers.

The ISC, a significant contributor to costs, undergoes reductions based on business size and occupation list. Certain roles and workers may also be exempt from this charge, offering potential savings.

  1. Healthcare and Social Care Visa:
    • Lower application fees and IHS exemption.

A special visa category for health and social care workers comes with lower application fees and an exemption from the Immigration Health Surcharge. This scheme provides tangible savings for both workers and organisations in this critical sector.

  1. IHS Reimbursement Scheme:
    • Eligible health and social care workers can claim back IHS costs.

In recognition of their contribution, certain health and social care workers are eligible for an IHS reimbursement, providing a potential financial relief for both employers and workers.

Additional Considerations

HR Compliance and Systems:

  • Investment in HR systems and compliance measures.

Maintaining a Sponsor Licence involves adhering to stringent HR compliance measures, potentially requiring investments in new systems or processes to meet Home Office requirements.

Legal Advice and Services:

  • Potential costs for legal counsel during the application process.

Navigating the complexities of the UK immigration system may necessitate legal advice. Immigration solicitors can provide expert guidance, assisting in application preparation and minimising the risk of costly errors.

Training Levy and Renewal Costs:

  • Ongoing commitment to training and renewal fees.

Organisations with a Sponsor Licence commit to investing in training for resident workers, potentially involving additional costs depending on the size and type of the company. Renewing a Sponsor Licence, typically valid for four years, incurs costs similar to the initial application fee.

Other Associated Costs:

  • Ancillary expenses like adjusting HR systems and potential legal fees.

While not directly related to the application process, businesses should consider ancillary expenses such as adjusting HR systems and potential legal fees when calculating the true expense of acquiring and maintaining a Sponsor Licence.

The Value Proposition of a Sponsor Licence

The costs associated with a Sponsor Licence should be viewed as an investment rather than an expense. The benefits that come with access to a global talent pool, innovation, diversity, and economic growth can far outweigh the initial and ongoing costs, delivering substantial returns over the long term.

Access to a Global Talent Pool

With a Sponsor Licence, businesses unlock the potential to recruit from a global talent pool, crucial for industries demanding specific skills not readily available locally. Casting a wider recruitment net allows businesses to address talent gaps effectively.

Business Growth and Innovation

Diverse teams bring varied perspectives and innovative approaches. Hiring overseas talent provides access to fresh ideas, fostering growth and development. Employees from diverse backgrounds can also help businesses understand and tap into international markets, strengthening global standing.

Fostering Diversity and Inclusion

A diverse workforce is a powerful driver of business performance, fostering a culture of innovation, engagement, and resilience. A Sponsor Licence enables businesses to build and nurture a diverse workforce, enhancing competitiveness.

Demonstrating Corporate Responsibility

Possessing a Sponsor Licence signals a commitment to legal compliance and corporate responsibility. It reflects dedication to fair and ethical recruitment practices, enhancing the company’s reputation and appeal to top-notch candidates, customers, and partners.

Economic Impact

By participating in the global talent market, businesses contribute to economic growth. Sponsored workers pay taxes, stimulate local economies, and often fill essential roles that benefit the community at large. The economic impact of a skilled and diverse workforce extends beyond the immediate company interests.

Expert Tips When Considering Sponsor Licence Fees

  1. Be Prepared:
    • Understand the full financial commitment upfront.

The application process involves various fees and potential additional costs. Being fully prepared and informed about these financial commitments is crucial for a smooth and successful application.

  1. Understand Your Business Size:
    • Accurately assess your business size to determine fees.

The size of the business significantly influences the Sponsor Licence fees. Understanding and accurately assessing the business size is crucial for budgeting and compliance.

  1. Leverage Fee Reductions:
    • Investigate opportunities for reductions and exemptions.

Exploring available fee reductions and exemptions can significantly impact the overall costs. Thoroughly investigate and leverage these opportunities to optimise financial investments.

  1. Comply with Sponsor Duties:
    • Adhere to duties and responsibilities to avoid penalties.

Strict adherence to Sponsor Licence duties and responsibilities is not only a legal requirement but also crucial for maintaining the licence. Non-compliance can lead to penalties and, in severe cases, revocation of the licence.

  1. Consider Long-term Value:
    • View costs as an investment in future success.

While the upfront costs might seem significant, viewing them as an investment in future success, talent acquisition, and business growth provides a more strategic perspective. Consider the long-term value of having a diverse and skilled workforce.

  1. Seek Professional Guidance:
    • Consider professional advice for a smoother application process.

Engaging with immigration experts or legal professionals specialising in sponsorship applications can streamline the process, reduce the risk of errors, and enhance the chances of a successful application.


Acquiring and maintaining a Sponsor Licence involves a multifaceted financial commitment. However, the strategic advantages it offers, including access to a global talent pool, fostering innovation, promoting diversity, and contributing to economic growth, position it as a worthwhile investment. With careful planning, utilisation of available reductions, and a long-term perspective, businesses can navigate the costs effectively, ensuring sustained success in the ever-evolving landscape of international talent acquisition.

UK Business Sponsor Licence Solicitors

Our immigration lawyers have extensive experience in preparing Sponsor Licence applications for businesses/employers regardless of whether the employer is a start up or large enterprise. Our immigration team can offer the following services:

  • Consultation with our experienced business immigration solicitors who can advise on the eligibility criteria of a Sponsor Licence application;
  • Provide the business/company with a bespoke supporting documents list which will assist in collating documents required for the Sponsor Licence application;
  • Prepare the relevant application form and detailed legal representations to accompany the application; and
  • If necessary liaise with the Home Office to track the progress of the application.

We are an Immigration law firm based in Middle Temple, London and our solicitors are fully authorised by the Solicitors Regulation Authority (SRA). Contact our specialist immigration team today and we can offer you a consultation in person or via telephone or Skype so we can explore your options. You can leave us a message on our Contact Form or give us a call on 02030110276.

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