Sponsor Licence Questions

by Kidd Rapinet on March 29, 2021
Co workers round table in a business meeting

What is a Sponsor Licence?

It is a formal licence granted to a business that has been authorised to employ migrant workers who do not have permission to work in the UK under any other immigration category.

Q: How much does a Sponsor Licence cost?

The cost of the licence will depend on the size of the applying organisation and the type of licence needed. Generally, for a small sized organisation the fee is £536 and for medium and large organisations, it’s £1,476. The size of the organisation will be determined on the number of employees, assets and turnover, so it may be worth seeking advice before making an application to ensure the correct application fee is paid.

NB Temporary Worker Sponsor Licence are also available, if you don’t wish to sponsor Skilled Workers for more permanent roles.

How long does it take to get a Sponsor Licence?

Most applications are decided within 8 weeks, which should be factored in to the recruitment process. For an additional £500 it may be possible to expedite the consideration of the application and secure a decision within 10 working days. You will be informed if your organisation is eligible for this service only once the application has been submitted.

 How long is a Sponsor Licence valid?

A sponsor licence will be valid for 4 years. It can be renewed before the end of the initial period for a further 4 years. However, if you fail to meet your obligations as a sponsor, the licence can be revoked.  You can also choose to surrender the licence if you no longer need it. While no refund will be given, you will be no longer subject to your duties as a sponsor.

What is the ‘SMS’?

The Sponsor Management System. This is an online platform through which your organisation’s Sponsor Licence will be managed. Using this system, you can assign certificates of sponsorship, report changes to your business, report migrant worker activity, renew your licence and manage your key personnel. Only select individuals are granted access, enabling them to use the Sponsor Management System.

What is a ‘CoS’?

CoS’ stands for Certificate of Sponsorship. It is an electronic record rather than a paper certificate and is assigned to a worker using the Sponsor Management System. Each CoS has a unique reference number and contains details of the job and worker to whom it is assigned.

A migrant worker will not be able to make an application for entry clearance, leave to remain or indefinite leave to remain without a CoS.

Co workers round table in a business meeting 

What is the difference between a defined and undefined CoS?

A ‘defined’ CoS is for Skilled Workers who are applying from outside the UK for entry clearance. An ‘undefined’ CoS is for Skilled Workers who are applying for leave to remain (from inside the UK).

Can I apply for 1 licence to cover multiple branches of a business?

Yes, this is possible. However, if one branch is investigated by the Home Office and the licence is revoked or downgraded, all branches will be affected.

Who are the ‘Key Personnel’ associated with a Sponsor Licence and who can fill these roles? 

When applying for a Sponsor Licence, you will be required to allocate ‘key personnel’. This includes:

  • Authorising Officer. They must be the most senior person in the organisation responsible for the recruitment of all migrant workers and/or meeting the sponsor duties. They will be responsible for the actions of anyone who uses the SMS.
  • Key Contact. The main contact between your organisation and the Home Office
  • Level 1 Users. They are given unique log-in details and full access to the Sponsor Management System in order to carry out day-to-day sponsorship activities. These include:
    • assigning CoS
    • reporting changes to the organisation and worker activity
    • appointing additional Level 1 and 2 Users
    • making applications and renewing the licence.

You must always have at least one Level 1 user in place who is an employee, a partner or director (for Sponsors approved from 6 November 2014). In most cases at least one of your Level 1 Users must be settled.

Additional level 1 users can be paid staff or office holders, employees of third party organisations engaged for delivery HR functions or a UK-based representatives.They cannot be a contractor, a consultant contracted for a specific project, temporary staff supplied by an employment agency or an undischarged bankrupt.

  • Level 2 Users. They are also granted unique log-in details but have limited access to the Sponsor Management System. They can create and assign CoS and report worker activity in respect of any CoS they have created. They can be any of those people who can be listed as a Level 1 User but can also be temporary staff supplied by an employment agency.

They can only be appointed once a licence has been granted.

All of these roles can be filled by the same person or separate individuals but they must be based in the UK.

An Authorising Officer and Key Contact will not automatically be given access to the Sponsor Management System. If they require access they must be appointed as a Level 1 or 2 user.

 Can I appoint a legal representative to be the ‘Authorising Officer’?

No. The Authorising Officer must be a paid member of staff or engaged as an ‘office holder’. They must be based in the UK and must not have any unspent criminal convictions. However you can appoint a legal representative to be a Level 1 or 2 User to help manage your Sponsor Licence.

My business holds a Tier 2 Sponsor Licence. Do I need to apply for a Skilled Worker Sponsor Licence?

No. Your licence will have been automatically converted to the new system following the introduction of the new worker categories on 1st December 2020.

 Do I need a Sponsor Licence to employ EU nationals with pre-settled status?

No. All EEA Citizens who arrived in the UK on or before 11:00pm on 31st December 2020 and have applied for settled or pre-settled status under the EU Settlement Scheme do not need to be sponsored to work for your business. If they arrived by this time but have not yet made an application, they must do so by 30th June 2021. Any EEA Citizens arriving in the UK from 1st January 2021, who do not have permission to work in the UK under another immigration category, will need to be sponsored for you to employ them.

What is an ‘A-rating’?

You will be given an ‘A-rated’ licence if your application for a Sponsor Licence is successful. It is an acknowledgment that you have been trusted to act appropriately as a sponsor and have systems in place to fulfil your duties. The licence can be downgraded to a ‘B-rating’ during its validity period if you fail to comply with your duties. You will be given a time-limited action plan to rectify the situation and required to pay a fee to avoid the licence being revoked.

My application for a Sponsor Licence has been refused. What can I do?

It is probably advisable to seek advice to assess your options. There is no right of appeal but you may be able to apply again, after the passing of any relevant ‘cooling-off period’. Alternatively, if there has been a simple case work error or your submitted documents have not been considered, an ‘error correction request’ may be submitted.

Why might an application for a Sponsor Licence be refused?

There are many reasons this may happen, such as:

  • You have had an application refused within the last 6 months and the ‘cooling-off period’ applies
  • You are currently employing an illegal worker
  • Your business does not have any operating or trading presence in the UK
  • False information or documentation was submitted with the application
  • A key member of the organisation (owner, director, any of the key personnel or someone involved in the day-to-day running) has a relevant unspent criminal conviction, an outstanding civil penalty, is legally prohibited from becoming a company director, has outstanding costs due to the Home Office which were ordered in legal proceedings or was named as ‘key personnel’ at a sponsoring organisation whose licence was revoked in the last 12 months
  • A previous licence was revoked (or surrendered whilst compliance action was being taken) in the 12months before applying
  • Requested documentation was not supplied within the given time limit
  • Unsuitable HR systems are in place
  • The Home Office are not satisfied that you offer genuine employment that meets the necessary salary and skill level
  • During the last 5 years you or key personnel have been involved in a similar role for another sponsoring organisation, issued with a penalty for failure to pay VAT or duty
  • There is good reason to believe you pose a risk to immigration control

What is the ‘cooling-off period’?

A specified period in which you are unable to re-apply for a sponsor licence. This can be following:

  • Refusal of an application for a Sponsor Licence;
  • Revocation of a Sponsor Licence;
  • Issue of a civil penalty; or
  • Conviction for a relevant offence by a key member of the organisation (owner, director, any of the key personnel or someone involved in the day-to-day running).

The exact period will depend on the circumstances.

To speak to a member of our immigration team, please call 020 7205 2115 or use the form provided to request a call back.

These materials and content have been prepared for the benefit of their viewers/readers. They are intended for marketing purposes only and are of a general nature and do not constitute legal advice applicable to any particular facts or circumstances. Kidd Rapinet LLP and/or the author(s) accept no duty of care, responsibility or liability for any loss or damage which you or any third party may suffer as a result of any reliance or use by you or they of these marketing materials and content, except to the extent it is not legally possible to exclude such liability. If you require legal advice on your own situation, please contact us so we can discuss how we may assist.

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