The UK Home Office has introduced several updates to the Sponsorship Guidance that significantly impact employers who hire international talent. These changes, which refine compliance requirements and sponsorship obligations, are particularly relevant for businesses planning to obtain or maintain a Sponsor Licence.
Although many of the updates overlap across these documents, together they reflect a comprehensive tightening of rules aimed at reducing abuses of the UK immigration system. Employers and potential sponsors must take note of the following changes to ensure compliance and avoid severe consequences.
One of the most notable updates concerns the costs employers can recover from sponsored employees. Previously, there was ambiguity around which expenses could be charged back to workers. However, concerns over exploitation have led the Home Office to implement new restrictions.
Effective for any costs incurred on or after 31 December 2024, sponsors are no longer allowed to pass on or recover:
While the guidance does not provide a comprehensive definition of “associated administrative costs,” it does mention premium services as an example. This might also include professional legal fees incurred during the sponsorship application process. Importantly, these restrictions do not apply to the costs associated with a visa application or CoS assignment that occur outside the specified circumstances, meaning that under employment and contract law, expenses like priority service fees or legal costs might still be recoverable in those contexts.
Employers and their advisers must carefully review and, if necessary, update any clawback agreements to ensure they fully comply with the new rules and any transitional protections.
A significant overhaul has been made to the requirements for key personnel within sponsoring organisations, detailed in the rewritten Section L4 of the guidance.
Key points include:
These stricter criteria, especially the requirement for a combined Level 1 User role, may pose challenges for start-ups and overseas companies operating in the UK that lack readily available settled workers.
The updated guidance explicitly prohibits the use of a Sponsor Licence for hiring workers in a personal capacity. Specifically, Sponsor Licences must not be used in circumstances where:
The only exception to this rule is for private servants in diplomatic households. Historically, individuals (except sole traders wishing to sponsor someone for their own business) could not become licensed sponsors, leading to workarounds where household roles – such as personal assistants, secretaries, nannies, carers, and cooks – were sometimes sponsored through alternative structures like family offices or by being employed by a related business. However, UKVI has grown increasingly strict about such arrangements, and these changes reinforce a clear boundary against sponsoring workers for personal employment.
For those ineligible for sponsorship under this provision, alternative immigration routes exist. These include non-sponsored options like UK Ancestry, Youth Mobility, Graduate, and High Potential Individual visas, as well as dependant / family visas. The Domestic Worker visa remains an option for certain household roles, though it is extremely limited. Additionally, changes made in April 2024 mean that SOC code 6116 – used for nannies and au pairs – no longer meets the minimum skill level required for sponsorship; this SOC code now can only be used to extend an existing Skilled Worker visa for an individual continuing in the same role with the same sponsor.
The revised guidance clearly outlines the responsibilities of sponsors, specifying that non-compliance by anyone covered by the definition of “you or your” can lead to a refusal of a licence application or revocation of an existing licence.
Previously, “you” referred to the owner, director, key licence personnel (such as the Authorising Officer, Key Contact, and Level 1 Users), and those involved in the organization’s day-to-day operations. Now, the definition has been broadened to also include any “person recorded on your Companies House profile as a Person with Significant Control.”
This addition means that during the Sponsor Licence application process, employers must conduct more thorough due diligence to ensure that all individuals identified on their Companies House profile meet the necessary compliance standards.
Several further updates have been introduced that refine the operational aspects of sponsorship:
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