This guide explains how UK employers can apply for a Sponsor Licence through the Home Office. It covers the full sponsor licence application process, from eligibility and compliance duties to ongoing licence management. Whether applying for a Skilled Worker Sponsor Licence (formerly Tier 2 Sponsor Licence) or seeking to manage an existing licence, this guide provides practical insights to ensure legal compliance when hiring migrant workers.
Section A: Understanding the UK Sponsor Licence
Employers in the UK looking to hire skilled migrant workers must apply for a Sponsor Licence from the Home Office. Without this legal authorisation, it is not possible to assign Certificates of Sponsorship (CoS) or support a work visa application. Holding a sponsor licence (previously known as a Tier 2 Sponsor Licence) is a legal requirement for any UK business intending to hire foreign nationals who do not have an existing right to work.
This section explains what a sponsor licence is, the types of licences available, and why employers need to apply for a sponsor licence to access the global talent pool.
1. What is a Sponsor Licence?
A Sponsor Licence is formal permission granted by the Home Office to UK organisations, allowing them to sponsor skilled migrant workers under the points-based immigration system. The licence enables employers to assign Certificates of Sponsorship (CoS), which are essential for individuals applying for work visas such as the Skilled Worker visa. Applying for a sponsor licence requires employers to demonstrate they can comply with immigration laws and sponsorship duties, including maintaining robust HR systems and record-keeping processes.
Without a valid Home Office sponsor licence, an employer cannot legally sponsor or employ non-settled workers. Attempting to do so can result in significant penalties.
2. Licence Types: Worker & Temporary Worker
When applying for a sponsor licence, employers must select from two main licence categories:
- Worker Licence: For long-term employment routes such as the Skilled Worker route, Senior or Specialist Worker (under the Global Business Mobility scheme), and Minister of Religion.
- Temporary Worker Licence: For short-term employment routes including Creative Worker, Charity Worker, Religious Worker, and Seasonal Worker.
Employers can apply for either licence type or both, depending on the roles they need to sponsor. The Worker Licence is most commonly used for core staffing needs under the Skilled Worker visa route.
3. Why Employers Need a Sponsor Licence
A sponsor licence is mandatory for any employer wishing to hire workers from outside the UK who do not already have permission to work. Without this licence, a business cannot assign CoS or submit a sponsor licence application in support of a worker’s visa. Non-compliance with this requirement is a breach of immigration law and exposes employers to illegal working penalties—civil fines of up to £60,000 per illegal worker—and potential criminal liability in serious cases.
Additionally, holding a sponsor licence brings ongoing responsibilities. Employers must implement HR systems capable of monitoring sponsored workers’ immigration status, conducting right to work checks on all employees, and maintaining accurate records. These systems must be audit-ready at any time, as the Home Office can inspect licence holders with or without notice. Failure to meet sponsor duties risks suspension or revocation of the licence and disruption to business operations.
Section B: Sponsor Licence Eligibility & HR Compliance Duties
Before submitting a sponsor licence application, employers must ensure they meet the Home Office’s eligibility criteria and have the necessary HR systems in place to manage their sponsorship duties. Applying for a sponsor licence is not a formality; the Home Office assesses whether the organisation is genuine, compliant, and capable of fulfilling its obligations under the UK’s immigration system.
This section outlines the core eligibility requirements for sponsor licence applicants, the HR compliance duties that licence holders must adhere to, and the common compliance failures that can lead to enforcement action.
1. Eligibility Criteria for Employers
To apply for a sponsor licence, UK employers must meet several key criteria:
- Legitimate Business Presence: The organisation must be actively trading in the UK and be legally registered. Evidence such as Companies House registration, VAT certificates, and premises documents will be required as part of the sponsor licence application.
- Genuine Vacancy Requirement: The business must demonstrate a legitimate need to sponsor migrant workers, with job roles that meet the skill and salary thresholds of the relevant visa route, such as the Skilled Worker route.
- Compliance Record: Key personnel involved in the application must not have unspent criminal convictions for immigration offences, fraud, or similar dishonesty-related crimes.
- HR Systems Readiness: The organisation must have robust HR processes capable of fulfilling sponsor duties, including right to work checks, record-keeping, and reporting obligations through the Sponsorship Management System (SMS).
Failure to meet these requirements will result in the refusal of the sponsor licence application.
2. HR Systems & Sponsor Duties
Holding a Home Office sponsor licence comes with ongoing compliance duties that require proactive HR management. Employers must:
- Monitor the immigration status and right to work of all employees, including sponsored workers.
- Maintain accurate records for each sponsored worker, such as copies of passports, visas, and contact details.
- Conduct compliant right to work checks on all staff to establish a statutory excuse against illegal working penalties.
- Report changes via the SMS, including changes to a worker’s role, salary, work location, or if a worker leaves employment.
- Ensure job roles and salaries offered to sponsored workers align with those specified in the Immigration Rules and the CoS.
These sponsor duties are not optional. The Home Office expects full compliance and will scrutinise HR systems to ensure they are fit for purpose during audits.
3. Common Compliance Failures & Risks
Many sponsor licence holders face compliance risks due to inadequate HR processes or a lack of awareness of their duties. Common failings include:
- Failing to conduct consistent and compliant right to work checks on all employees, not just sponsored workers.
- Neglecting to report required changes to the Home Office via the SMS within the specified timeframe.
- Inadequate record-keeping, leading to missing documentation during a Home Office audit.
- Employing workers in roles that do not meet the sponsorship criteria set out in the Immigration Rules.
It is important to note that the Home Office can conduct unannounced compliance visits at any time, including before the sponsor licence application is decided. Failure to meet sponsor duties can result in penalties, licence downgrades, suspension, or even revocation, which can significantly impact business operations and workforce planning.
Section C: How to Apply for a Sponsor Licence
Applying for a sponsor licence involves several critical steps, including preparing supporting documents, completing the online sponsor licence application, and paying the relevant Home Office fees. Accuracy and thoroughness are essential, as errors or omissions can delay the application or result in refusal.
This section explains how UK employers should approach their sponsor licence application to ensure a smooth process and compliance with Home Office requirements.
1. Preparing Documents & Evidence Bundle
When applying for a sponsor licence, employers must provide specific documents to verify that their organisation is genuine and capable of meeting sponsorship duties. The Home Office sets out the required documentation in Appendix A of the Sponsor Guidance. While the specific requirements vary based on business type and sector, common documents include:
- Company bank statements in the organisation’s name.
- Employers’ liability insurance certificate (£5 million minimum cover).
- Business premises lease or ownership documents.
- Companies House registration documents (for limited companies).
- Evidence of a corporate bank account regulated by the Financial Conduct Authority (FCA).
Employers must ensure the documents are current, authentic, and formatted in line with Home Office requirements. The Appendix A list is updated regularly, so applicants should verify the latest document list before submission.
In addition to these documents, employers should prepare detailed job descriptions and salary information for the roles they intend to sponsor, along with an explanation of why settled workers cannot fill the vacancies.
2. Completing the Online Application (SMS)
The sponsor licence application is submitted through the Home Office’s Sponsorship Management System (SMS). Employers must appoint key personnel to manage the licence, including:
- Authorising Officer: The person responsible for overall compliance with sponsorship duties.
- Key Contact: The main liaison with UK Visas & Immigration (UKVI).
- Level 1 User: The person responsible for day-to-day management of the licence via the SMS.
Accurate information must be provided throughout the online sponsor licence application form, including details of the business structure, intended licence types (Worker and/or Temporary Worker), and key personnel appointments. Errors in the application can result in refusal.
Once the application is submitted, the employer must print, sign, and submit the sponsor licence submission sheet, along with all supporting documents, to the Home Office within five working days.
3. Sponsor Licence Fees & Application Submission
The sponsor licence application fee depends on the size and charitable status of the organisation:
- Small companies and charities: £536
- Medium and large companies: £1,476
Fee classification follows the Companies Act definition of a small company or charitable organisation. Payment must be made at the point of application submission.
Standard processing times for sponsor licence applications are up to 8 weeks. However, the Home Office offers a priority service for an additional £500, which reduces the processing time to 10 working days. This service is subject to daily allocation limits, so early submission is essential to secure a priority slot.
Employers should also be prepared for the possibility of a Home Office compliance visit as part of the decision-making process. The visit assesses whether the organisation’s HR systems and processes are sufficient to manage sponsorship duties.
Section D: Licence Management & Home Office Enforcement
Securing a sponsor licence is only the beginning. Once granted, employers are responsible for the ongoing management of their Home Office sponsor licence, ensuring full compliance with sponsorship duties throughout the life of the licence. Failure to meet these obligations can result in serious enforcement actions, including licence suspension, revocation, and financial penalties.
This section explains how employers manage their sponsor licence using the Sponsorship Management System (SMS), how licence ratings and renewals work, and what enforcement actions the Home Office can take against non-compliant sponsors.
1. Sponsor Management System (SMS) Roles & Access
The Sponsorship Management System (SMS) is the Home Office’s online portal through which employers manage their sponsor licence. The SMS is used to assign Certificates of Sponsorship (CoS), report changes to migrant worker details, and update organisational information.
Key personnel responsible for managing the licence must be appointed and maintained accurately within the SMS:
- Authorising Officer: Holds overall responsibility for the sponsor licence and compliance with all duties.
- Key Contact: Acts as the primary point of contact with UK Visas & Immigration (UKVI).
- Level 1 User: Manages the day-to-day sponsor licence activities within the SMS, including CoS assignments and reporting duties.
- Level 2 Users: Optional additional users with limited SMS access, assisting with licence management.
Any changes to these roles must be reported to the Home Office promptly via the SMS. Sponsors are also required to notify the Home Office of changes to their own organisation, such as changes to business address, ownership, or structure, within 20 working days.
2. Licence Rating, Renewals & Upgrades
When a sponsor licence is first granted, it is awarded an A-rating, signifying full compliance with the Home Office’s standards. An A-rated sponsor can fully sponsor migrant workers by assigning CoS as required.
However, if the Home Office identifies compliance concerns, it may downgrade the sponsor’s rating to a B-rating. A B-rated sponsor is required to follow an action plan to rectify identified failings. During this period, the sponsor may be restricted from assigning new CoS until compliance is restored.
Sponsor licences are valid for four years. Employers must apply to renew their licence before it expires to continue sponsoring workers. The renewal process involves submitting an application via the SMS, paying the relevant renewal fee, and potentially undergoing a Home Office compliance audit.
Employers may also apply to upgrade their licence by adding additional visa routes or applying for Premium Sponsor status, which provides enhanced Home Office support services.
3. Home Office Audits, Revocations & Enforcement Actions
The Home Office conducts compliance audits to ensure that sponsor licence holders are fulfilling their sponsorship duties. These audits can be announced or unannounced and may occur at any time, including pre-licence approval or post-approval reviews.
Common reasons for enforcement action include:
- Failing to maintain accurate and complete records for sponsored workers.
- Neglecting to report required changes through the SMS within the specified timeframes.
- Employing sponsored workers in roles that do not meet the specified skill level or salary requirements.
- Failing to conduct compliant right to work checks on all employees, including non-sponsored staff.
Enforcement actions can range from licence downgrades and suspension to full revocation. If a sponsor licence is revoked, the organisation loses the right to sponsor migrant workers, and existing sponsored employees will have their visas curtailed. Curtailment typically gives the worker 60 calendar days to find a new sponsor or leave the UK.
Proactive compliance management is essential. Employers should regularly audit their internal HR systems, ensure that key personnel are fully trained on sponsor duties, and maintain accurate records to minimise the risk of Home Office enforcement actions.
FAQs: UK Sponsor Licence
How long does it take to get a Sponsor Licence?
Standard processing times for a sponsor licence application are up to 8 weeks from submission. A priority processing service is available for an additional £500, which reduces the timeframe to 10 working days. Due to limited daily allocations, early submission is recommended if using the priority route.
What is a Certificate of Sponsorship (CoS)?
A Certificate of Sponsorship (CoS) is a unique electronic reference number assigned by a licensed sponsor to a migrant worker. It is a mandatory part of the worker’s visa application process, providing evidence of the job role, salary, and compliance with sponsorship requirements.
Can my Sponsor Licence application be refused?
Yes. The Home Office may refuse a sponsor licence application if the employer fails to meet eligibility criteria, submits incomplete or inaccurate documentation, or has a history of immigration compliance breaches. If an application is refused, there is no formal right of appeal, though a fresh application can be submitted after addressing the refusal reasons.
What happens if my Sponsor Licence is suspended or revoked?
If a sponsor licence is suspended, the organisation cannot assign new CoS until the Home Office completes its investigation. If revoked, the business loses its ability to sponsor any workers, and existing sponsored employees will have their visas curtailed, typically giving them 60 days to find a new sponsor or leave the UK.
Do I need a Sponsor Licence for unpaid internships?
If the intern requires permission to work in the UK and the role does not fall under a visa route that allows unsponsored work, the employer will need a valid sponsor licence to assign a CoS, even for unpaid roles.
How much does a Sponsor Licence cost?
The application fee is £536 for small companies and charities, and £1,476 for medium and large organisations. Additional costs apply for each CoS assigned and for visa application fees. Legal and compliance management costs should also be factored in.
Can I sponsor workers from any country?
Yes. A valid sponsor licence allows UK employers to sponsor eligible migrant workers from any country, provided the job role meets the skill and salary thresholds set out in the Immigration Rules.
How often do I need to renew my Sponsor Licence?
Sponsor licences are valid for four years. Employers must submit a renewal application via the SMS before the licence expiry date to continue sponsoring workers.
What are the main reasons Sponsor Licences get revoked?
Common reasons include failure to maintain proper records, neglecting reporting duties, employing workers in non-compliant roles, and systemic failures in HR compliance processes. The Home Office may also take enforcement action for failing to conduct right to work checks on all staff.
Is it mandatory to conduct right to work checks even if I have a Sponsor Licence?
Yes. Holding a sponsor licence does not exempt employers from their legal obligation to conduct right to work checks on all employees. Proper right to work checks establish a statutory excuse against illegal working penalties of up to £60,000 per illegal worker.
How do I apply for a Sponsor Licence with the Home Office?
Employers can apply for a sponsor licence by completing an online application via the Home Office’s Sponsorship Management System (SMS), submitting the required supporting documents, and paying the applicable fee. Guidance is available on gov.uk sponsor licence pages.
What is the difference between a Tier 2 Sponsor Licence and a Skilled Worker Sponsor Licence?
The Tier 2 Sponsor Licence was the former category under the old points-based system. Following the introduction of the Skilled Worker route, employers now apply for a Skilled Worker Sponsor Licence. The underlying sponsorship duties and compliance obligations remain broadly the same.
Conclusion
Applying for a sponsor licence is a significant legal and operational commitment for UK employers. The sponsor licence application process requires detailed preparation, including gathering supporting documents, appointing key personnel, and demonstrating robust HR systems capable of managing sponsorship duties.
Holding a sponsor licence gives businesses access to a global talent pool, allowing them to sponsor skilled migrant workers for roles that cannot be filled by settled workers. However, the licence comes with strict compliance duties, and the Home Office maintains close oversight through audits and enforcement action. Non-compliance can result in severe penalties, including licence suspension, revocation, and substantial fines.
Employers should approach the sponsor licence application with a compliance-first mindset, ensuring their HR processes are audit-ready and that key personnel understand their obligations. With the right preparation and ongoing licence management, organisations can confidently navigate the UK’s sponsorship system to meet their workforce needs.
Glossary
| Term | Definition |
|---|---|
| Sponsor Licence | Formal permission granted by the Home Office allowing UK employers to sponsor skilled migrant workers under the points-based immigration system. |
| Certificate of Sponsorship (CoS) | An electronic reference number assigned by a licensed sponsor to a migrant worker, required for their visa application. |
| Sponsorship Management System (SMS) | The online portal through which sponsor licence holders manage their licence, assign CoS, and report changes to the Home Office. |
| Authorising Officer | The senior person responsible for the organisation’s sponsor licence and overall compliance with sponsorship duties. |
| Key Contact | The primary point of contact between the sponsor organisation and the Home Office. |
| Level 1 User | The individual responsible for daily management of the sponsor licence via the SMS, including CoS assignments and reporting duties. |
| Immigration Rules | The legal framework setting out the requirements for entry and stay in the UK, including work visa eligibility criteria. |
| A-rating | The initial rating awarded to a sponsor licence holder, signifying full compliance with Home Office standards. |
| B-rating | A downgraded licence status indicating compliance concerns, requiring the sponsor to follow an action plan to rectify failings. |
| Licence Revocation | The cancellation of a sponsor licence by the Home Office due to serious breaches of sponsorship duties. |
| Right to Work Checks | The legal process employers must follow to verify and document an individual’s permission to work in the UK, providing a statutory excuse against illegal working penalties. |
| Tier 2 Sponsor Licence | The former name for the sponsor licence category used to sponsor skilled workers under the old Tier 2 system, now referred to as the Skilled Worker Sponsor Licence. |
| Home Office Sponsor Licence | A sponsor licence issued by UK Visas & Immigration (UKVI), a division of the Home Office, authorising employers to sponsor migrant workers. |
Useful Links
| Resource | Link |
|---|---|
| DavidsonMorris: UK Sponsor Licence Guide | https://www.davidsonmorris.com/sponsor-licence/ |
| DavidsonMorris: Sponsor Licence Compliance Duties | https://www.davidsonmorris.com/sponsor-duties/ |
| DavidsonMorris: Certificate of Sponsorship (CoS) | https://www.davidsonmorris.com/certificate-of-sponsorship/ |
| DavidsonMorris: Sponsor Licence Check | https://www.davidsonmorris.com/sponsor-licence-check/ |
| DavidsonMorris: Apply for a Sponsor Licence | https://www.davidsonmorris.com/appy-for-sponsor-licence/ |
| Gov.uk: Apply for a Sponsor Licence | https://www.gov.uk/apply-sponsor-licence |
| Gov.uk: Sponsor a Skilled Worker | https://www.gov.uk/skilled-worker-visa/sponsor-a-skilled-worker |
| Gov.uk: Sponsorship Management System (SMS) Guide | https://www.gov.uk/guidance/using-the-sponsorship-management-system |
| Xpats.io: Sponsor Licence Guide | https://www.xpats.io/sponsor-licence/ |
Author
Gill Laing is a qualified Legal Researcher & Analyst with niche specialisms in Law, Tax, Human Resources, Immigration & Employment Law.
Gill is a Multiple Business Owner and the Managing Director of Prof Services - a Marketing Agency for the Professional Services Sector.
