UK Sponsorship Licence: How to Obtain It and What Is It for?

British immigration rules allow foreign workers and students to apply for visas and enter the United Kingdom only after they have found a place of work or studies. To regulate the permanent or temporary recruitment of foreign nationals and acceptance of foreign students for studies, a special process was introduced, namely sponsorship licensing.

What Is UK Sponsorship Licence?

A UK sponsorship licence is an official permission for a British employer to hire non-UK residents. To get a sponsorship licence, you need to apply to the UK Visas and Immigration (UKVI), a division of the Home Office. A company, a sole trader, or an individual can become a sponsor.

With a sponsorship licence, you can issue certificates of sponsorship to invite foreign workers on the following visas:

• UK Skilled Worker visa;
• One of the UK Global Business Mobility visas;
• UK Health and Care Worker visa;
• UK International Agreement visa.

in exchange for the right to employ foreign specialists sponsors commit to comply with all the immigration requirements and agree to be inspected by the Home Office officials.

If a sponsor fails any of the mandatory requirements, they may get fined or lose their licence. If the license is revoked, it will affect the sponsored employees who will have to either switch to another sponsor, if their visa allows, or leave the UK.

If you need to sponsor a foreign specialist, this article will explain how to do this.

From 1 January 2021, the EEA and Swiss citizens are treated as foreign nationals. This means that EU citizens also need to be sponsored to work in the UK.

Why Are Sponsors Licensed in the UK?

The Home Office uses the sponsorship system to ensure legal immigration and compliance with all immigration rules.

However, a sponsorship licence per se and a certificate of sponsorship issued to a foreign national do not guarantee that a foreign worker or student will be granted a visa and allowed to enter the UK.

Sponsorship Licence for UK Employers

No matter how long you plan to employ a foreign national, you must obtain a sponsor licence to hire them in the first place. You may need such a licence even if you invite a foreign national to volunteer for a charity.

UK sponsorship licences are issued by the British immigration service, commonly known as the Home Office. Before applying for a sponsor licence, consider these two important things:

1. Hiring an experienced immigration advisor who will provide consultations and be your legal representative before the Home Office;
2. Ensuring that your company meets all the requirements.

What Are Requirements for UK Sponsors?

To get a UK sponsorship licence, you must comply with the following requirements:

1. You must be officially registered and trade in the UK legally. For example, a limited liability company must be registered with the Companies House. There are no requirements for how long you must be in operation. However, at least one employee must be a UK resident who will communicate with the Home Office on all matters concerning the sponsorship licence;
2. You must operate in the UK. Otherwise, your application will be immediately rejected. If you do not have a physical office in the UK but use a virtual business model, you can still apply for a sponsorship licence. However, you will have to provide sufficient evidence that you operate in the UK and can legally fulfil your sponsor’s duties;
3. You must prove to the Home Office that you have a job for a foreign specialist with relevant qualifications. The Home Office can request additional information about the position to clarify the worker’s duties and responsibilities;
4. You must have an HR management and recruitment system in place that will allow you to fulfil your duties as a sponsor. To ensure that this requirement is met, the Home Office inspectors can visit you before and after the sponsorship licence is issued;
5. The company, its owners, directors, and key personnel must have clean immigration and criminal records, especially when it comes to fraud and money laundering convictions;
6. You cannot get a sponsorship licence if you have had it revoked before due to systematic violations of immigration rules;
7. You must provide evidence that you have all the permits to operate in the UK if they are required.

Genuineness Test

This test is used to justify the validity of your business. The Home Office needs to know why you require a sponsorship licence and foreign staff.

Your application will be assessed for eligibility. You will be able to use economic factors to prove that you need a sponsorship licence for employing skilled foreign workers.

The genuineness test can be performed at various stages of your licence application and management:

• When you apply for a sponsorship licence;
• When the Home Office inspectors visit your company to ensure that you meet all the immigration requirements;
• When you request certificates of sponsorship.

The Home Office applies the same eligibility criteria at any stage. The genuineness test shows what position will be or is occupied by a foreign worker and how valuable it is to you as a sponsor.

You will have to prove to the Home Office that the job you are offering to a foreign specialist is genuine:

1. It must be an in-demand occupation. In other words, the occupation code must be from the shortage occupation list published on the official government website;
2. The foreign worker’s qualifications must correspond to the scale and needs of your business. There must be a real need to hire a foreign specialist for a particular position in your type of organisation in the field where you currently operate, and the chosen candidate must meet the job requirements;
3. If you already know who you are going to hire for the position, make sure that the foreign worker’s previous employment and/or education is relevant to the job. You cannot hire a foreign specialist with qualifications that are lower than required and then pay them an extra £10,000 a year to meet the minimum salary requirement for the position.

When the Home Office officials have doubts about a job offered by a prospective or current sponsor, they will ask the employer for further information or evidence. In practice, this means that a UK company needs to ensure in advance that the job description accurately reflects the job responsibilities of the foreign to be employed. If you are unable to provide this evidence in time, the Home Office will refuse the application or suspend an already issued UK sponsorship licence.

An applicant for a UK Skilled Worker visa may also be subject to additional checks if there are doubts about the genuineness of the job. The Home Office may ask the foreign worker to provide further evidence within 28 days or attend an in-person interview where the Home Office official will try to establish:

1. How the applicant’s level of education and work experience are relevant to the offered position;
2. How familiar the applicant is with the UK company inviting them to work;
3. The conditions of the applicant’s employment in the UK.

Although in most cases such additional checks are not applied, the UKVI pays special attention to the so-called high-risk sectors. High-risk sectors are not defined in any guidance for the Home Office caseworkers. However, experienced Imperial & Legal’s immigration advisors warn that, for example, any application for a UK sponsorship licence to employ a foreign care and health worker will be subject to more rigorous scrutiny. The applicant’s immigration history is also taken into account as part of the genuineness test.

If your UK company does not yet have a position for which you plan to employ a foreign national, you can still apply for a sponsorship licence in advance. Like with employing a foreign worker for an existing position, the Home Office officials will have a lot of questions regarding the work the potential foreign specialists will be doing. Moreover, the Home Office will evaluate the offered job to see if your business needs it at all.

How to Choose Right Type of Sponsorship Licence?

The type of a sponsor licence depends on the category of foreign workers that you plan to employ. In other words, the type of licence is determined by the documents that foreign nationals will need to enter the UK.

Long-term work visas are issued to qualified foreign workers who come to the UK for a permanent job. This category also includes employees on Skilled Worker visas for intra-company transfer, sports people, and ministers of religion.

Temporary visas allow companies to invite qualified foreign workers to the UK for a certain period, for example, for seasonal work or internship. Such visas are granted to those who work for charity, arrive in the UK on a tour or for a competition, come to deliver a sermon or take part in a conference.

Your sponsorship licence can allow you to invite foreign workers from one category or both categories. As was mentioned earlier, employers must support the sponsored workers:

1. Employers must pay foreign employees a minimum level of salary for their position;
2. Sponsored workers, in return, must demonstrate sufficient experience and qualifications that are necessary to work successfully;
3. Employers must tell the Home Office how they found the employee to whom they are issuing the requested certificate of sponsorship.

Sponsorship Management System

For your application to be approved in the UK, you must have people in your business taking up the required management roles.

To manage the sponsorship system, the following specialists are required:

1. Authorising officer – is responsible for the work of the company in line with the purpose of the licence and makes the relevant decisions;
2. Key contact – is an employee of the company who liaises with the Home Office;
3. Level 1 user – manages the issued licence. They can grant or withdraw sponsorship certificates. If necessary, the company can have several level 1 users. There can also be level 2 users who have restricted access to the sponsorship management system.

All the functions listed above can be performed by different employees or by the same person. But the company must have at least one level 1 user.

The Home Office requires all the employees managing the sponsorship system to be suitable for their positions. They must spend most of the year in the UK, have relevant knowledge, have no criminal or immigration offences, have no tax debts, and they cannot be majority shareholders of the company whose sponsorship licence was revoked in the last 12 months.

Sponsor Responsibilities

When you apply for a sponsorship licence, you commit to comply with several requirements that ensure legal work immigration.

Sponsors must keep full and up-to-date records of all the activities they perform that they can show to the Home Office officials at any time upon their request. The Home Office evaluates the company’s ability to act as a sponsor at the application stage.

Sponsor’s responsibilities include:

• Personnel record keeping;
• Monitoring and reporting;
• Monitoring of absences;
• Timely notification about any changes in the business.

Personnel Record Keeping

A UK sponsor must keep detailed and up-to-date records about all the sponsored employees, including their permission to enter the UK, national insurance number, employment history, and contact details.

Sponsors must also have copies of documents for all their foreign specialists. The list includes:

• Copy of a valid passport;
• Copy of the document confirming the immigration status with the allowed period of stay in the UK;
• Copy of biometric residence card.

Besides, all the employment contracts must be stored in the company’s archive. The Home Office can check at any time whether an employee’s salary and responsibilities correspond to the ones indicated in their certificate of sponsorship.

Monitoring and Reporting

A UK sponsor must have an effective tracking system for the sponsored employees that allows the company to provide the Home Office with the relevant information about foreign workers within 10 days if:

• They could not start their work within the indicated period;
• They have been absent for more than 10 days without a good reason;
• They were fired before their sponsorship certificate or employment agreement expired;
• Their immigration status changed (for example, when a UK Skilled Worker visa holder got a UK permanent residence).

Sponsors must inform the Home Office about any breach of the conditions of stay in the UK.

Monitoring of Absences

A UK sponsor must monitor the absences of all sponsored employees irrespective of the reason: sick leave, annual leave, and business trips inside and outside the country.

Notification of the Home Office Officials About Any Changes

The changes that must be reported to the Home Office using the sponsorship management system include:

• Staff changes that influence the key personnel indicated in the licence;
• Change of the registered or actual company address; the Home Office needs to know to be able to come there with an inspection.

Though the information about UK subsidiaries is not included in the sponsorship management system, it is recommended to keep separate records about the incorporation and closure of UK subsidiaries. The same principle should be applied to foreign subsidiaries and organisations that are related to the parent company. The UKVI must be informed any time a foreign company related to the sponsor is set up or closed.

How Can Sponsors Calculate Minimum Pay for Sponsored Specialists?

One of the key requirements for a UK sponsor relates to the sponsored employee’s rate of pay. It must be equal to or higher than the minimum set by the British government.

Unfortunately, this is one of the most complicated requirements since the minimum pay for various occupations is different. The applied rate is determined by the employee’s qualification and their expertise.

For each type of work, there is a set rate that depends on the position. To calculate the salary of a sponsored employee, the sponsor uses the current rate for the position offered by the company or the set minimum rate, whichever is higher.

The minimum pay for new entrants, namely employees under 26 years old at the time of application, is the same. A specialist is considered a novice if their experience is less than three years. Then, they move to another category of more experienced workers and can hope for a higher minimum pay.

According to new rules, the rate can be lower than the set minimum (but not less than £20,480 per year) if:

• An applicant has a STEM degree that corresponds to their occupation;
• There is a shortage of workers with this qualification.

For all sponsored employees, the minimum requirements are the same: not less than £26,200 per year or not less than £10.75 per hour as well as the minimum set rate for a particular occupation. There can be some exceptions if an applicant has a doctorate degree in STEM, their occupation is from the shortage occupation list, they are under 26 years old, etc. For all these categories, the minimum pay can be lower. If you want to calculate your exact salary, contact Imperial & Legal’s advisors.

Requirements for Applicants for UK Skilled Worker Visas

As you know, not every occupation falls under the UK Skilled Worker immigration category. There are certain fields where employees cannot be sponsored to get a long-term UK visa for relocation to and work in the UK.

To assess whether an applicant can be granted a certificate of sponsorship, a point-based system is applied. Sponsored employees must meet several criteria to get the required points, namely 70 points. The criteria include skills, pay, and the knowledge of English. The following table is used to calculate these points:

Additional points can be granted depending on the pay, field of work, degree, etc.

Certificates of Sponsorship

A certificate of sponsorship (CoS) is a mandatory electronic document that is issued to foreign employees using the sponsorship management system. The CoS ID must be indicated in the application for any work visa as proof that you have a UK sponsor.

There are two types of certificates of sponsorship: defined and undefined.

Defined Certificate of Sponsorship

Defined certificates are for foreign specialists who are outside the UK. After the Home Office approves the application, the company issues the certificate with all the applicant’s details, including their name, passport, information about their future job, responsibilities, pay, etc.

Undefined Certificate of Sponsorship

Undefined certificates are issued for workers who are already in the UK and are switching to a UK work visa from another visa category. To issue undefined certificates of sponsorship, the company must have them available. It means that such certificates can be issued at any time without any approval. The company takes an available certificate and fills it in with the applicant’s details and work-related data.

If all undefined certificates of sponsorship have already been used by the company in this year, it can apply for additional certificates through the sponsorship management system.

Application for Undefined Certificate of Sponsorship

In your application for a sponsorship licence, you need to specify how many undefined certificates you require until 5 April when a new sponsorship year starts.

In practice, this means that if your application for a sponsorship licence is approved, you will get your licence together with undefined certificates of sponsorship. You will then be able to issue a certificate for a foreign worker who is already in the UK so that they can switch to a UK Skilled Worker visa and start working for you.

It is recommended to estimate how many foreign employees you will need in the 12 months ahead to request the correct number of certificates of sponsorship for the whole year. If you need some additional certificates, you will still be able to apply for them using the sponsorship management system.

Issuing Certificates of Sponsorship

Sponsors need to understand the difference between two existing types of certificates of sponsorship. If a UK sponsor chooses an incorrect certificate of sponsorship, it will be fined since this is a serious violation of the immigration rules. In other words, a sponsor must not issue undefined and defined certificates of sponsorship to foreign specialists who are not eligible for them and grant definite certificates for the occupation that differs from the one indicated in the application.

A certificate of sponsorship number must be included in the worker’s visa application. After they get a certificate of sponsorship, they have three months to apply for their visa. The Home Office will refuse late applications. Note that the application must be also submitted more than three months before the official start of work, which is stated in the certificate of sponsorship.

Application for Sponsor Licence and Home Office Visit

Imperial & Legal can assist you in preparing all the necessary documents to confirm that your business operates in the UK.

At least four pieces of supporting evidence must be submitted with the application:

• Corporate bank account statement for the last six months;
• Long-term office lease or purchase agreement;
• Registration with the HMRC;
• Audited financial accounts for the last year.

The Home Office officials may not be satisfied just with the documents you submit. They may visit your business to confirm that you are a reliable sponsor.

Companies that want to become sponsors must pay a licence fee that depending on the category of foreign workers and the size of the company ranges from £536 to 1,476.

Rating System of Sponsorship Licences in the UK

If everything is done correctly, all the necessary documents are submitted on time, and your business is confirmed to be reliable, you get an A-rated licence and are included in the register of sponsors. An A-rated licence allows you to issue certificates of sponsorship and, if all other requirements are met, employ foreign nationals.

However, if your company fails to fulfil one or more responsibilities as a sponsor, for example, if you fail to pay your foreign employee at least the minimum pay prescribed by law, you may be downgraded to B-rating. With a B-rated licence, you cannot issue new certificates of sponsorship but can support your foreign workers in their application for the extension of their existing visas.

If you fail to fulfil your responsibilities, downgrading your licence will only be one measure. After getting a B-rated licence, you must contact the Home Office within 10 days to obtain the so-called plan of action that will give you instructions on how to restore to an A-rating. You will have to pay for the plan. If you do not contact the Home Office, it will revoke your licence. During 4 years, you can only be downgraded twice. If it happens a third time, you will lose your sponsor licence.

If your licence is revoked, it will be difficult to obtain another one. Even if you lost your licence for a good reason and the Home Office admits it, you will have to wait 12 months to apply for a new sponsorship licence. An experienced advisor can help you avoid such situations.

As a rule, it takes the Home Office not more than eight weeks to process a sponsor licence application. A UK sponsorship licence is valid for four years and can be extended. If necessary, you can pay for accelerated processing and obtain your licence in two weeks.

Obtain UK Sponsorship Licence in One Month with Imperial & Legal

It will be easier for a British company to get a sponsorship licence if it gets assistance from qualified advisors from the very beginning and fulfils the requirements of the Home Office.

A prospective sponsor must prove that they are suitable for a sponsor status. The company must:

• Be real and operate mainly in the UK;
• Appoint authorised employees who are UK residents to manage the sponsorship licence.

The Home Office officials also pay a lot of attention to whether the company can meet certain requirements:

• How genuine is the job offered to a foreign employee and what professional skills does it require?
• How does the company employ workers and how does it monitor their work?
• Is the prospective sponsor ready to fulfil their responsibilities as a sponsor?

British companies and international companies that expand their business to the UK must be able to give detailed answers to these questions. Imperial & Legal, on its part, will provide reliable legal support that will allow you to obtain a sponsor licence in less than one month.

Our experienced specialists have earned the reputation of reliable partners who can provide effective legal support for any business process in the UK – from registering a UK company and opening a bank account to business management and tax optimisation. If you have any questions, don’t hesitate to contact Imperial & Legal’s experts.