Hiring skilled workers from abroad is an essential way for many UK businesses to address skills shortages and get the best international talent. However, to employ foreign workers legally, companies must apply for a sponsor licence from the Home Office first. This process can be complex, but with the right guidance, it can be navigated effectively. Here’s an in-depth guide on everything you need to know to apply for a sponsor licence, ensure eligibility, and avoid common pitfalls.
A sponsor licence is formal permission granted by the Home Office to UK businesses, allowing them to hire foreign skilled workers via sponsorship under certain conditions. It is granted for the duration of 10 years, and a company can sponsor as many individuals as required – under the assumption that the organisation remains compliant and has a necessary number of Certificates of Sponsorship (CoS).
Step 1: Ensure Your Business Meets the Eligibility and Suitability Criteria
Before you can apply for a sponsor licence, your business must meet specific eligibility and suitability criteria that the Home Office will assess.
Eligibility Criteria:
- Operating a legitimate business in the UK: your business must be a genuine, lawful entity with a trading presence in the UK. This applies to UK-based companies as well as UK branches of international firms. Even if your business was established recently, it will not be an issue – however, it must be genuinely operational and be a “going concern”.
- Public good: your organisation and key personnel must not have a history of activities deemed against the public good, such as previous convictions or any other troubles with the law.
- Compliance capability: your company must prove that it has robust HR and recruitment processes and systems in place to manage sponsored workers. Those don’t have to be “fancy” systems – a simple Excel file will suffice, as long as it is an effective way to track attendance, visa expiration dates, etc., ensuring that the company is capable of fulfilling the sponsor duties in line with the Home Office guidelines and regulatory requirements.
- Genuine job vacancy: the role must be a genuine position that meets the requirements for the Skilled Worker visa or other relevant visa routes. You need to demonstrate that the position wasn’t created solely for immigration purposes.
- Minimum salary threshold: depending on the role, you have to offer the minimum annual salary. The most common salary threshold as of September 2024 is £38,700. However, if the candidate is younger than 26 y.o. or is switching from Student/Graduate visa, the minimum annual salary will be £30,960 (but again, it all depends on the role). Keep in mind that the Home Office has access to the HMRC records and can check payments via PAYE, therefore you have make sure that you are able to sustain the guaranteed offered level of salary.
Suitability Criteria:
- HR systems: you must have effective HR systems and processes to manage sponsored workers and remain compliant with immigration rules.
- Key personnel: you must appoint individuals to key roles (see Step 3) to manage the sponsorship process. These individuals must have no history of non-compliance with UK immigration or employment laws.
- Workplace systems: your company should have proper processes to meet sponsorship obligations, including keeping accurate records and monitoring sponsored employees.
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Step 2: Choose the Type of Sponsor Licence
There are two main types of sponsor licences that businesses can apply for, depending on the type of employment you are offering:
- Worker Licence: For long-term skilled employment, which includes categories like:
- Skilled Worker: For general skilled roles that meet the required salary and skill levels.
- Intra-Company Transfer: For transferring employees from an overseas branch to a UK branch.
- Minister of Religion: For religious roles.
- International Sportsperson: For athletes and coaches.
- Skilled Worker: For general skilled roles that meet the required salary and skill levels.
- Temporary Worker Licence: For short-term roles such as creative or sporting jobs, charity work, and youth mobility programs.
Your choice of licence depends on the nature of the positions you intend to fill.
Step 3: Appoint Key Personnel
Before applying, you must appoint individuals to key roles within your organisation. These people will be responsible for managing the sponsorship process and ensuring compliance with the sponsor duties.
- Authorising Officer: a senior person in your organisation who will oversee the sponsorship process and ensure that your business adheres to its responsibilities.
- Key Contact: the individual who will liaise with the Home Office regarding your licence and any compliance matters.
- Level 1 User: the person responsible for the day-to-day management of the Sponsor Management System (SMS), which is used to assign Certificates of Sponsorship and report certain activities.
These individuals must meet the following criteria :
- Be a British citizen or have settled status in the UK
- Be based in the UK
- Be involved in the company as a director (can be unpaid) or as a paid employee through PAYE (contractors are not eligible)
- Have no prior or ongoing convictions, tax issues, or legal proceedings against them
- Oversee HR and recruitment processes to ensure compliance with immigration regulations
If the Home Office determines that this person was appointed solely to obtain the Sponsor Licence, the application will be refused.
One person can hold all three roles, but this must be specified in your application.
Step 4: Submit the Application and Required Documents
You can apply for a sponsor licence through the Home Office’s online portal. Along with the application form, you will need to submit at least 4 supporting documents. These must prove that your business is genuine and capable of fulfilling sponsorship duties. Required documents typically include:
- Proof of trading status: such as a bank statement or VAT registration
- Insurance: employer’s liability insurance certificate
- Financial statements: latest unaudited / audited accounts
- HMRC registration: Proof of registration as a PAYE and National Insurance-paying employer
- Lease or ownership documents: for your business premises
It is also recommended to accompany your application with a cover letter, providing more information about the business, your decision to become a sponsor, and the candidate(s) you plan on sponsoring.
You must submit your documents within 5 working days of the application, and they must be in the correct format (PDF, JPEG, PNG). If any documents are not in English or Welsh, you must provide certified translations.
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Step 5: Sponsor Licence Fees and Processing Times
The cost of applying for a sponsor licence depends on the size and type of your organisation.
- Small or charitable sponsors: £536
- Medium or large sponsors: £1,476
Processing times usually take up to 8 weeks, but you can use a priority service for an additional £500 to get a decision within 10 working days. If the Home Office requires further documents or a site visit, processing could take longer.
Qualifying as a small or medium / large organisation
Your company’s size and annual turnover determine whether you qualify as a small or large sponsor, which affects the fees you’ll pay and some aspects of the application process.
You’re considered a small business if you satisfy two or more of the following requirements:
- Total turnover per fiscal year – not more than £10.2 million net;
- Total net asset per given fiscal year – not more than £5.1 million net;
- Total number of employees – not more than 50.
Companies excluded from the small companies regime: insurance firms, e-money issuers, or companies involved in financial markets.
Pre-licence audit
Sometimes, before making a decision about your sponsor licence application, the Home Office will conduct a pre-licence audit. The selection of a company is typically random, however it is known that small and new companies are getting audits more often than more established larger businesses. An authorising officer appointed by your organisation will be responsible for attending a two-hour-long interview (usually via Teams) and answering ~60 questions about the company, trading, funds, salaries, sponsored employees, future immigration compliance, etc. During the interview, the Home Office will be testing if the sponsorship role is genuine and not just created for the purposes of obtaining an immigration status in the UK.
How Nation.better can help you
Applying for a sponsor licence is not as straightforward as it seems. It is a long and delicate process that needs careful planning to adhere to all the Home Office requirements.
By using Nation.better’s sponsor licence service , you can rely on our immigration experts to handle the entire process for you. Our mission is to make the experience stress-free while increasing your chances of obtaining Home Office approval.
If you feel that you are in need of assistance, fill out this form – our team will contact you with detailed information on how we can support your business in attracting top international talent.
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