Everything you need to know about how to apply for a UK sponsor licence to hire the skilled workers your business needs to grow
3 May 2024
If you’re a UK-based company, you may want to sponsor a skilled worker from overseas. In 2023, around a quarter of UK employers had overseas nationals on their payrolls. The Tech and Healthcare sectors rely particularly heavily on international labour markets to access skilled workers with specialised yet scarce abilities.
However, since the UK left the European Union and its free movement regime in 2020, businesses are still adjusting to what’s replaced it. To hire from abroad, you must hold a valid sponsor licence issued by the UK government’s UK Visas and Immigration (UKVI) agency.
This may seem like an onerous and bureaucratic process. But the ability to tap a global talent pipeline makes it more than worth the trouble.
We hope this guide will help you apply for a sponsor licence successfully, so that you can access a global talent pool without fear.
What is a sponsor licence?
A sponsor licence is a mandatory certification for employers who wish to hire foreign nationals to work in the UK. This includes workers from the EU, EEA, and Switzerland who arrived after the Brexit transition period ended on 31 December 2020.
The requirement came into effect on 1 January 2021.
Why does the sponsor licence scheme matter?
The sponsor licence is the keystone of the UK’s points-based system for strategically managing immigration.
Under the pre-Brexit free movement regime that preceded the current arrangement, nationals of over 27 EU/EEA countries were automatically entitled to move to and work in the UK.
This became a fault line in the 2016 vote to leave the EU that only deepened during the following years of political wrangling. The sponsor licence scheme balances businesses’ need to stay open to overseas talent with the political imperative to ‘take back control’ of immigration.
1. It means only sponsored candidates can apply for visas
A licence is proof that an organisation has permission to issue Certificates of Sponsorship (CoS) for skilled workers from overseas. Without a CoS, a foreign national cannot apply for a visa.
The sponsor licence system prevents those without the means to support themselves from moving to the UK. It also helps the government keep tabs on how many foreign nationals are working in the country.
2. It imposes obligations on sponsors
The sponsor licence, in theory, ensures that bad actors cannot hire foreign nationals. Organisations must meet high legal standards to be granted one, and keeping it requires proving ongoing compliance with legally defined duties.
These compliance requirements place a cost on employers looking to sponsor skilled workers from overseas. However, these requirements keep the immigration system transparent and lower the risk of migrant workers being treated unfairly.
What do I need to prove when I apply for a sponsor licence?
Anyone who runs a business or organisation in the UK can apply for a sponsor licence. But to get one, you must prove you’re a genuine organisation carrying out legitimate business.
A licence symbolises a company’s commitment to fair hiring practices. Your company must show that it is:
- Legally incorporated
- Advertising genuine jobs
- Paying above the salary thresholds
- Keeping consistent records
- Reporting to the Home Office regularly
- Acting in the public interest
- Carrying out right-to-work checks
- Cooperating with UKVI fully
You can read more about your duties and obligations as a sponsor here.
What type of sponsor licence do I need?
Depending on which business visa your hire will apply for, you can apply for two types of sponsorship licence.
1. Worker licence
This strand of the scheme lets you issue Certificates of Sponsorship to skilled workers.
This might be for permanent positions, long-term placements or single
A Worker licence allows businesses to issue Certificates of Sponsorship to applicants for the following visas:
Skilled Worker visa
The Skilled Worker Visa, formerly the Tier 2 Visa, is the most common type for employers wishing to hire skilled workers from abroad.
The skilled worker route allows employers to hire for hundreds of possible roles, from marketing directors to electronics engineers, as long as the applicant has sufficient English language skills.
As of April 2024, foreign workers hired through this visa must be paid at least £38,700, or the going rate for that position – whichever is higher.
Refer to this article for a full breakdown of the Skilled Worker Visa and its subtypes.
Senior or Specialist Worker visa (Global Business Mobility)
These strands of the Global Business Mobility visa serve businesses that already have a branch in the UK and want to transfer employees from an overseas branch.
This was previously called the Intra-company Transfer visa.
Minister of Religion visa
This visa facilitates those coming to work for religious organisations.
International Sportsperson visa
This visa is designed for elite professional athletes and coaches based in the UK. This is the visa that holds the Premier League together.
2. Temporary Worker licence
This type allows you to issue a CoS for short-term hires.
It enables many forms of employment, from fruit-picking to taking monastic orders.
Employers in search of skilled workers will want to focus on the following UK business visa types:
Scale-up Worker visa
The Scale-up Worker Visa is a subtype of the Temporary Worker visa.
It’s specifically designed for high-growth companies hiring skilled workers from outside the UK.
Your sponsorship duties for a scale-up worker will only last six months. Your hire can then continue working for you without needing a CoS.
Read our scale-up worker visa explainer to understand the application process.
Global Business Mobility
These sub-types of the Global Business Mobility visa let companies transfer employees for brief periods.
Graduate Trainee visa – for foreign workers undergoing graduate training schemes in the UK
Service Supplier visa – for foreign workers contracted to provide short-term services for 6-12 months
UK Expansion Worker visa – for overseas workers setting up a new branch or subsidiary of a foreign business
Secondment Worker visa – for overseas staff being seconded to a UK company to execute a high-value contract.
Read more about the application process for these permits in our Global Business Mobility Visa guide.
How do I apply for a sponsor licence?
The application process itself is reasonably simple and conducted online.
1. Determine your eligibility
If all the following conditions are met, you can apply for a sponsor licence:
- You have an established business presence in the UK with a fixed office address. This is demonstrated by having an entity registered on UK Companies House, together with supporting documents submitted to UK Visas and Immigration (UKVI) in support of the application.
- You can offer ‘genuine employment’ that meets the skill and minimum salary requirements set by the UK Visas and Immigration (UKVI) agency.
- You have appropriate systems in place to monitor sponsored workers, plus appointed personnel, like an Authorising Officer, to manage sponsorship in your business.
- You have no unspent criminal convictions for immigration offences or certain other crimes, such as fraud or money laundering.
2. Prepare your application documents
You need to gather the documents needed to sponsor an employee in the UK. These include proof of your business operations and evidence that you can comply with the responsibilities and duties of a sponsor and any other relevant documentation as required by the UK immigration authorities.
Once you have started your application, you must submit all your documentation and completed submission sheet to UKVI within five working days.
3. Pay the fee
The sponsor licence application fee depends on the licence you’re applying for and what type of organisation you are.
Medium or large sponsors must pay the ‘large’ fee of £1,476 for a licence and £940 to add a Worker licence to an existing Temporary Worker licence.
However, small or charitable sponsors are charged a ‘small’ fee at the reduced rate of £536 and no fees to add a Worker licence to an existing Temporary Worker licence.
Adding a Temporary Worker licence to an existing Worker licence is free.
Am I a small sponsor?
Many smaller companies will receive a discount on the rate they pay for their licence. You will benefit from this if you meet any two of the following conditions:
- 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
How long does a sponsor licence application take?
Most applications are dealt with in less than eight weeks. However, if your business requires a licence urgently, you may be able to pay for a faster decision.
The UKVI pre-licence priority service allows applicants to pay an extra £500 to get a decision within ten working days.
This service is limited to a small number of applications every working day.
Faster decisions are allocated on a first-come, first-served basis in the order requests arrive.
If you wish to expedite the approval process, our legal experts can submit a request to the priority service on your behalf.
We recommend that employers use this service wherever there’s a time-critical need to sponsor skilled workers.
What might slow my application down?
The UKVI sponsor licence system is normally efficient and reliable, with four to six-week turnaround times the norm.
Any errors in your supporting documents will slow down your application. In some cases, the Home Office will conduct an audit of an applicant’s premises. This will then generate an inspection report that can take up to six weeks to complete.
To minimise the chances of delay, check over your application carefully and analyse your systems to anticipate any red flags.
What happens when my sponsor licence application is approved?
Once your application has been approved and your sponsor licence obtained, you will be given your own unique sponsor licence number.
This is recorded in UKVI’s systems, allowing you to sponsor skilled workers, who will each receive a Certificate of Sponsorship number.
How long does my licence last?
On April 6 2024, UKVI extended the sponsor licence term from four years to ten.
This move also granted existing sponsor licence holders a ten-year extension, sparing thousands of businesses the need to renew.
How can I keep my sponsor licence?
To maintain a valid sponsor licence number, you must comply with the rules and regulations set by UKVI. The system imposes penalties on companies that contravene these laws, ranging from suspending licences to criminal prosecution.
There are four main pillars of your responsibilities under the sponsor licence regime.
- Preventing illegal working: Sponsors must consistently demonstrate that everyone on their payroll has the ongoing right to work in the UK
- Keeping records: You must keep comprehensive records for each worker you sponsor, from personal details to proof of your recruitment processes
- Proactively reporting: You must use the Sponsor Management System (SMS) software platform to report any changes to your workforce and/or the status of your individual employees
- Complying with national law: Sponsors must comply with the wider laws of the land and make sure all their commercial and personal actions are in the public good
The success of your compliance strategy depends on having dedicated personnel to manage your responsibilities. You’ll need to appoint, at the very least, an Authorising Officer, a Key Contact, and a Level 1 SMS user.
We recommend brushing up on your obligations with our guide to sponsor duties and compliance. Any errors might result in your licence being downgraded, suspended, or revoked altogether.
What happens if my licence is downgraded?
All new licences are automatically granted an A rating. However, small slip-ups can lead to UKVI downgrading your rating to a B. If this happens, you will be placed under supervision by the UK Visas and Immigration (UKVI), typically for six months.
UKVI will create an action plan to help you reach the standards needed to regain your previous licence status. You must pay £1,476 within ten days of receiving notification of your downgrade.
During the downgrade period, you cannot issue new Certificates of Sponsorship to hire new employees from abroad. However, you can maintain your existing foreign workforce as normal.
It’s crucial to take this downgrade period seriously, as failure to improve could lead to further sanctions, including revocation of the licence.
You are allowed two B downgrades per licence. If compliance issues are not resolved after this point, you will face the suspension of your sponsor licence.
What happens if my licence is suspended?
When your licence is suspended, your company will be temporarily barred from issuing any new Certificates of Sponsorship or extending those already in place. You will also be removed from the public register of sponsors.
This will not affect the sponsored employees who are currently working for you, who can continue their work as normal. Any sponsored prospective hires still awaiting their visa decisions will have their applications paused.
A suspension is not necessarily permanent. Nonetheless, it is a serious situation that demands immediate attention. What happens next is entirely in the hands of UK Visas and Immigration (UKVI). Based on their assessment, they can either reinstate or revoke your licence.
You’ll receive a notice of suspension from UKVI outlining why they made this decision. You’ll then have 20 working days to respond with a letter addressing each point raised. You will be expected to offer evidence of constructive actions you will take.
UKVI will then start a formal investigation into your company, possibly including a compliance visit. This will assess whether you are working in good faith to remedy the shortcomings that prompted the suspension.
At the end of this process, UKVI will decide whether to reinstate your skilled worker sponsor licence, keep it suspended or even revoke it.
If they choose to reinstate your licence, they will likely downgrade its rating to a B. This signifies that you are under probation and must step up your compliance efforts.
What happens if my licence is revoked?
If your licence is revoked, the consequences are more severe.
You will immediately lose the ability to issue any new CoS or extend current licences.
All migrant workers you currently sponsor will have 60 days from the point of revocation to find alternative sponsors, switch visa types, or leave the UK.
You do not have the right to appeal a revocation.
A ‘cooling-off’ period then ensues, typically 12 months but potentially up to five years in the most severe cases. Once this has elapsed, you can apply for a licence again. However, you are only likely to be granted one if you can prove that you have resolved all the issues that caused it to be revoked in the first place.
If UKVI finds that your business employs illegal workers, you will be liable for civil and criminal penalties. The government has recently tripled fines on rogue employers, and firms can expect to pay up to £60,000 per breach.
To avoid such grim consequences, we recommend being very proactive about your compliance. Follow the three Rs: recruiting compliance officers, reporting all changes in your workforce to UKVI, and keeping strict records.
For more advice, consult our employers’ guide to sponsor duties and compliance.
If you’re worried about hidden weaknesses, you can also arrange a mock audit of your organisation.
Will the rules change?
A slew of changes to the UK visa system came into effect in April 2024. The new rules are designed to reduce net migration from its unusually high peaks in 2022 and 2023. They directly impact companies that sponsor skilled workers.
The changes in a nutshell:
- Salary thresholds for skilled workers rose to £38,700
- The general salary threshold for senior or specialist workers in the Global Business Mobility routes will increase from £45,800 to £48,500
- The salary threshold for the Scale-up route now sits at £36,300
- Creative workers must now demonstrate their unique contributions to the industry
- The Shortage Occupation List was replaced with a new Immigration Salary List (ISL)
- Limitations on supplementary work have been lifted
- The new minimum income requirement (MIR) for sponsoring partners and children in family immigration routes is £29,000 annually
We do not currently foresee any further changes to the immigration rules that will impact sponsors. We will keep readers updated if any more new rules come into effect.
Read more about the Statement of Changes to visa rules and its full effect on sponsors.
Expert guidance and assistance for every sponsor licence application
Getting a licence is a complicated process by design. The system is supposed to ensure that only reputable firms can sponsor skilled workers to come to the UK.
Small mistakes can be costly in a process that rightly insists on high standards. Missing a piece of documentation, misunderstanding a visa category, or appointing someone unsuitable to a compliance role — all these small, honest mistakes can leave your application in limbo.
Working with a trusted partner can eliminate these risks. Our seasoned legal team has decades of experience handling immigration and visa requests at scale. We can set you up with a sponsor licence quickly and smoothly, so that you can start sponsoring skilled workers to fill your post-Brexit talent gaps.
All you have to do is get in touch.
