Sponsor Licence for Employers
What is a sponsor licence and do employers need one? Understand sponsorship requirements, costs, and compliance duties.
Last updated: 30 January 2025
A sponsor licence allows employers to hire workers who need sponsored visas.
What Is a Sponsor Licence?
Definition
| Feature | Detail |
|---|---|
| Home Office permission | To sponsor workers |
| Allows you to | Issue Certificates of Sponsorship |
| Required for | Skilled Worker route |
| Not needed for | Some other visas |
Who Needs One
| Hiring | Licence Needed? |
|---|---|
| Skilled Worker | Yes |
| Health and Care Worker | Yes |
| Global Business Mobility | Yes |
| Graduate visa holder | No |
| EU Settled Status | No |
| Youth Mobility | No |
Types of Licence
Worker Licence
| Type | For |
|---|---|
| Skilled Worker | Main work route |
| Health and Care | NHS, care sector |
| Senior/Specialist Worker | Intra-company |
| Graduate Trainee | ICT route |
Temporary Worker Licence
| Type | For |
|---|---|
| Charity Worker | Unpaid charity |
| Creative Worker | Arts, entertainment |
| Religious Worker | Ministers |
| Seasonal Worker | Agriculture |
Both Types
| Option | Detail |
|---|---|
| Apply for both | If needed |
| Separate application | For each |
| Different costs | May apply |
Application Process
Eligibility
| Requirement | Detail |
|---|---|
| Genuine business | Operating legally |
| UK presence | Based in UK |
| Systems in place | For compliance |
| Key personnel | Named individuals |
Key Personnel
| Role | Responsibility |
|---|---|
| Authorising Officer | Overall responsibility |
| Key Contact | Day-to-day management |
| Level 1 User | System access |
| Level 2 User | Additional access |
Documents Needed
| Document | Purpose |
|---|---|
| Business registration | Proves genuine |
| Accounts | Financial evidence |
| VAT certificate | If registered |
| Employer liability insurance | Required |
Costs
Licence Fee
| Business Size | Fee |
|---|---|
| Small/charitable | £536 |
| Medium/large | £1,476 |
| Valid for | 4 years |
Small Sponsor Definition
| Qualifies If | Criteria |
|---|---|
| Under 50 employees | Or |
| Turnover under £10.2m | Or |
| Balance sheet under £5.1m | Annual |
Immigration Skills Charge
| Per Worker | Annual Cost |
|---|---|
| Small sponsor | £364 |
| Medium/large | £1,000 |
| Per year of visa | Multiplied |
Other Costs
| Cost | Amount |
|---|---|
| Certificate of Sponsorship | £239 each |
| Priority processing | £500 (if available) |
Compliance Duties
Core Duties
| Duty | Requirement |
|---|---|
| Keep records | Of sponsored workers |
| Report changes | To Home Office |
| Cooperate | With audits |
| Prevent illegal work | Right to work checks |
Record Keeping
| Keep Records Of | Detail |
|---|---|
| Worker's passport | Copy |
| Contact details | Current address |
| Attendance | Work patterns |
| Salary evidence | Payslips |
Reporting Duties
| Report | Within |
|---|---|
| Worker not starting | 10 working days |
| Absences over 10 days | 10 working days |
| Job changes | 10 working days |
| Worker leaving | 10 working days |
What to Report
| Change | Report |
|---|---|
| Address change | Worker moves |
| Role change | Significant |
| Salary change | Decrease |
| Absences | Unexplained |
| Leaving employment | When ends |
Using the Licence
Issuing Certificates of Sponsorship
| Process | Step |
|---|---|
| Log into SMS | Sponsorship Management System |
| Assign CoS | To worker |
| Enter details | Job, salary |
| Submit | To system |
CoS Requirements
| Must Include | Detail |
|---|---|
| Job title | Accurate |
| SOC code | Occupation code |
| Salary | Meeting threshold |
| Start date | When work begins |
Compliance Checks
Home Office Visits
| Type | Detail |
|---|---|
| Pre-licence | Before granting |
| Post-licence | After granting |
| Compliance | Random or triggered |
What They Check
| Area | Inspection |
|---|---|
| Records | Are they complete? |
| Systems | HR processes |
| Workers | Are they there? |
| Genuine vacancy | Real job? |
Outcomes
| Result | Consequence |
|---|---|
| Compliant | Continue |
| Action plan | Must improve |
| Downgrade | B-rating |
| Suspension | Cannot sponsor |
| Revocation | Licence withdrawn |
Licence Ratings
A-Rating
| Status | Meaning |
|---|---|
| Good standing | Can sponsor |
| Normal operation | Full access |
| Maintain | Through compliance |
B-Rating
| Status | Meaning |
|---|---|
| Concerns identified | On notice |
| Action plan | Must complete |
| Time limited | To improve |
| Can still sponsor | Usually |
Suspension
| Status | Meaning |
|---|---|
| Serious concerns | Suspended |
| Cannot sponsor | New workers |
| Investigation | Ongoing |
| May recover | Or be revoked |
Revocation
What Happens
| If Revoked | Effect |
|---|---|
| Cannot sponsor | Anyone |
| Existing workers | 60 days to find new sponsor |
| Must reapply | If want licence back |
| Cooling off | Period may apply |
Common Reasons
| Reason | Example |
|---|---|
| Non-compliance | Missing reports |
| Fraud | False information |
| Not cooperating | With Home Office |
| Illegal working | Employed without checks |
Best Practices
Stay Compliant
| Practice | Benefit |
|---|---|
| Regular audits | Catch issues |
| Training | Staff know duties |
| Systems | Automated tracking |
| Documentation | Everything recorded |
Common Mistakes
| Mistake | Avoid |
|---|---|
| Late reports | Set reminders |
| Missing records | Regular checks |
| Wrong job details | Accurate CoS |
| Salary drops | Monitor payments |
When You Don't Need a Licence
Workers Who Don't Need Sponsorship
| Status | Sponsor? |
|---|---|
| British citizens | No |
| Irish citizens | No |
| Settled/Pre-settled | No |
| ILR holders | No |
| Graduate visa | No |
| Youth Mobility | No |
| Dependants | Usually no |
Benefits
| Without Sponsorship | Advantage |
|---|---|
| No licence needed | For these workers |
| Simpler hiring | Just RTW check |
| No compliance | Beyond normal |
| No ISC | Immigration charge |
Summary
Key Points
| Element | Detail |
|---|---|
| Required for | Skilled Worker route |
| Costs | £536-£1,476 + per worker |
| Duties | Records, reporting, compliance |
| Maintain | A-rating through compliance |
For Employers
| Action | Purpose |
|---|---|
| Assess need | Do you need one? |
| Apply if needed | Plan ahead |
| Comply | Maintain licence |
| Train staff | On duties |
Related answers
Preventing Illegal Working: Employer's Guide
Civil penalties for illegal working. How to establish a statutory excuse, avoid fines, and handle Home Office enforcement visits.
Right to Work Checks: UK Employer Guide
UK employers must verify every employee's right to work before they start. Learn the 3 methods, required documents, and penalties for non-compliance.
Skilled Worker Visa
What is a Skilled Worker visa and what are the work rights? Understand employer sponsorship, restrictions, and checking requirements.
Frequently Asked Questions
- Do I need a sponsor licence to hire foreign workers?
- Only for certain visa routes. You need a sponsor licence to hire Skilled Workers, but not to hire people on Graduate visas, Youth Mobility, or settled status. The licence lets you issue Certificates of Sponsorship.
- How much does a sponsor licence cost?
- A small business (under 50 employees) pays £536, while medium/large businesses pay £1,476. There are also Immigration Skills Charges per worker (£364-£1,000 per year depending on company size).
- What are sponsor compliance duties?
- Sponsors must keep records, report changes (like absences or job changes), cooperate with Home Office, and ensure workers only do permitted work. Failure can result in licence downgrade, suspension, or revocation.