Table of Contents
- What is a sponsorship licence?
- Employer requirements for obtaining a licence
- How to obtain a Sponsorship Licence
- Employer responsibilities after obtaining a licence
- When can your licence application be refused?
- Sponsorship Licence – Main Categories
- Certificate of Sponsorship (CoS)
A sponsorship licence is one of the most significant changes to immigration law since the UK officially left the European Union. You need one if you run a business in the UK and want to employ foreign workers.
What is a sponsorship license?
Every UK employer is required to hold an official document (sponsorship licence) that allows them to employ skilled workers from other countries. This document was previously known as a Tier 2 Sponsor’s Licence.
The Certificate of Sponsorship is issued for a period of 4 years and has a unique number which the employee can use to apply for a work visa in the UK.
Remember that you cannot hire an employee without a sponsorship licence. The only exception to this is if the person has another form of work permit, such as a PBS dependent or spouse visa.
However, hiring an illegal worker carries both civil and criminal consequences!
Employer requirements for obtaining a licence
- In most cases, only companies can obtain a sponsorship licence. Sole traders may qualify in very few cases;
- The company must be based in the UK;
- The company must comply with the law and current regulations. Any breach of the law may make it difficult to obtain a sponsorship licence;
- The Home Office has the right to carry out additional checks to verify that the employer is fulfilling its responsibilities.
The Home Office must be satisfied that you can offer genuine employment in the occupation and that you will pay the appropriate wage rate, as set out in the guidelines for the immigration scheme in question.
How do I get a sponsorship licence?
The basic requirement for obtaining a Certificate of Sponsorship is to submit an application demonstrating that the company is genuinely operating in the UK.
You will also need to select the licence category that best suits your needs.
As you will be aware, the Home Office may require additional documentation. The most common are:
- PAYE number;
- Reports or financial statements;
- Employer’s Liability Insurance number for at least £5 million from an authorised insurer;
- Documents showing ownership or rental of the company’s premises;
- Bank account number with a recent bank statement.
The maximum time taken to make a decision on a licence is 8 weeks. However, you can request a priority decision (within 10 working days) for £500.
If your company receives a positive decision, it’s time to pay the licence fee. For a small business the cost is £536. Medium and large businesses pay £1,476.
When is your business no longer considered 'small’? It happens when you meet 2 of the following conditions:
- annual turnover exceeds £10.2 million;
- assets are £5.1 million;
- you employ 50 employees;
- you are not a registered charity.
Employer responsibilities after obtaining a licence
If the decision is positive, your company will receive an A rating, meaning that it meets all the requirements to be a sponsor.
From now on, you will have to fulfil certain obligations on an ongoing basis:
- You must ensure that the employee meets the criteria required for the licence:
– fluency in English;
– professional qualifications, if required for the job. - You must keep records of the employee:
– personal data;
– place of residence;
– number of hours worked;
– NIN (National Insurance Number). - you must regularly submit reports to regulatory authorities.
You can also expect visits from Home Office officials, who will inspect your company and each location where employees will be working. These visits may or may not be announced.
Over time, the Home Office may decide that your company no longer meets all the requirements. If this happens, your rating will drop to B. In such a situation, you will be given an action plan to help you correct the deficiencies and regain an A rating. If you fail to do so, the Home Office may even revoke your licence!
It is also important to note that your licence may be suspended or revoked without the first step of downgrading to category B. The choice of action taken will depend on the seriousness of the offences found.
When can your licence application be refused?
The Home Office can refuse a sponsorship licence application for a number of reasons. Reasons for refusal may include, for example
- Failure to pass a Home Office compliance audit;
- Lack of adequate procedures to meet sponsorship obligations;
- Failure to pass the 'genuineness test’;
- inadequate documentation of migrant workers
- failure to respond to Home Office enquiries in a timely manner.
This is not an exhaustive list. Remember that your application may be refused for other reasons. You cannot apply for a licence again for six months from the date of refusal. This is known as the cooling-off period.
Sponsorship Licence – Main Categories
There are several main categories of sponsorship licences, and each type of licence requires the submission of different supporting documents.
Depending on the type of workers you intend to employ, you will need to select the type of licence you require when submitting your application.
The four main categories include:
1. Skilled Worker
The Skilled Worker Scheme applies to skilled workers from outside the UK. From 1 January 2021, it will also apply to all EEA and Swiss nationals.
The Skilled Worker route requires a minimum annual salary of £25,600. If you want to recruit under this scheme, you must pay your employee a salary equal to or exceeding this threshold.
This is the best option if you want to recruit someone for a specific job in the UK, such as a doctor or accountant. Such an employee must have the appropriate education/qualifications and be able to speak English.
2.Intra-company Transfer (ICT)
The ICT route is for migrants who are offered temporary work in the UK, provided the salary does not exceed £73,900 and the employee has been with the company for at least 12 months. The maximum permitted stay in the UK is 5 years.
You can also sponsor an overseas employee under the Intra-company Graduate Trainee scheme. This route is suitable for people coming to the UK as part of a training programme for a managerial or professional role.
3. Sports Person
The Sports Person (T2) visa is for qualified trainers and professional athletes.
4. Ministers of Religion
This licence is for ministers who have been offered a position within a religious community. The role must be strictly ministerial. Teaching or administrative roles within a religious organisation may be refused.
Certificate of Sponsorship (CoS)
An important term in sponsorship licensing is the CoS. It is an electronic document generated in the Sponsor Management System (SMS) once the licence has been granted.
You can assign the certificate to a migrant worker to generate the unique reference number required for a visa.
You must appoint a Sponsorship Manager (called an Authorising Officer) within your company. This person will be responsible for overseeing the sponsorship management system and ensuring compliance with sponsorship obligations.
This is usually the person responsible for recruitment in the company; it can be, for example, a director or HR manager.
It is also necessary to appoint a level 1 user. This person will have access to SMS (the Sponsorship Management System). They will be responsible for reporting any changes in your organisation, sending CoS requests and assigning CoS to migrant employees via SMS.
Sponsorship licence – summary
- A Sponsorship Licence is essential if you wish to employ workers from other countries;
- To obtain the licence, your company must be based in the UK and operate within the law;
- To obtain a licence, you must submit an application and select the category of licence you require;
- The application fee is £536 or £1,476 (depending on the size of your business) and there can be a waiting period of up to 8 weeks for a decision;
- Once you have received a positive decision, you must maintain an A rating;
- You are required to appoint an authorizing officer responsible for overseeing SMS and a Level 1 user who will send requests to assign CoS to employees.
