With the United Kingdom’s shift to a points-based immigration system post-Brexit, employers looking to hire skilled workers from outside the UK, including the EU, must hold a Tier 2 Sponsor License. This license, now referred to as the Skilled Worker Sponsor License, enables UK-based organizations to legally sponsor foreign nationals to work in the country.
The application process for a Sponsor License can be complex, requiring thorough documentation, compliance with strict Home Office regulations, and the ability to demonstrate genuine employment needs. This comprehensive guide walks UK employers through every aspect of the Tier 2 Sponsor License application process, from eligibility criteria to compliance obligations.
What Is a Tier 2 (Skilled Worker) Sponsor License?
A Tier 2 Sponsor License allows UK employers to recruit skilled workers from outside the UK, including non-EEA (European Economic Area) countries. The license is issued by the UK Home Office and is necessary for sponsoring employees under the Skilled Worker visa (formerly Tier 2 General visa).
With a Sponsor License, employers can:
- Issue Certificates of Sponsorship (CoS) to potential employees.
- Hire workers to fill roles that meet the skill and salary thresholds defined by the Home Office.
- Sponsor workers for both short-term and long-term positions, depending on the role.
Types of Sponsor Licenses
When applying for a Sponsor License, employers must choose the type that aligns with their hiring needs:
1. Worker License (for Long-Term Employment)
- Skilled Worker: For roles that meet skill level and salary requirements.
- Senior or Specialist Worker (Global Business Mobility): For multinational companies transferring senior staff to UK offices.
- Minister of Religion: For religious organizations hiring ministers, missionaries, etc.
- International Sportsperson: For elite athletes and coaches.
2. Temporary Worker License (for Short-Term Employment)
- Charity Worker
- Creative Worker
- Religious Worker
- Government Authorized Exchange
- International Agreement
- Seasonal Worker
Most UK businesses apply for the Skilled Worker Sponsor License, which is the focus of this guide.
Who Needs a Sponsor License?
Any UK employer intending to hire foreign nationals under the Skilled Worker route must obtain a Sponsor License. This applies to:
- Private companies (small businesses, corporations)
- Educational institutions (colleges, universities)
- Healthcare organizations (NHS trusts, private clinics)
- Non-profit organizations (charities, NGOs)
However, you do NOT need a Sponsor License to hire:
- British citizens
- Irish citizens
- Individuals with Settled or Pre-Settled Status under the EU Settlement Scheme
- People with Indefinite Leave to Remain (ILR) in the UK
Eligibility Criteria for a Sponsor License
The Home Office sets strict eligibility requirements to ensure that only genuine, compliant businesses can sponsor workers.
1. Registered and Operating in the UK
- Your business must be a legally registered entity with an established UK presence.
2. Genuine Need for Sponsorship
- You must prove that the roles you intend to fill require genuine skilled workers.
- Jobs must meet the skill level and salary thresholds set by the Home Office.
3. Compliance with Immigration Laws
- No history of immigration violations, criminal offenses, or fraudulent activities.
- Past compliance issues may result in application refusal.
4. Suitable HR and Recruitment Systems
- Your business must have robust HR processes to manage sponsored workers, including:
- Monitoring employee attendance
- Maintaining accurate records
- Reporting changes in employee status to the Home Office
5. Key Personnel in Place
You must appoint key staff to manage sponsorship duties:
- Authorizing Officer: Senior person responsible for compliance.
- Key Contact: Primary point of contact with the Home Office.
- Level 1 User: Manages day-to-day sponsorship activities via the Sponsor Management System (SMS).
Required Documents for a Sponsor License Application
The Home Office requires specific documents to verify your organization’s legitimacy. The exact documents depend on your business type, but generally include:
Core Documents:
- Proof of Business Registration:
- Companies House registration certificate
- Partnership agreement (for partnerships)
- Proof of Business Premises:
- Lease agreement or utility bills
- Evidence of Trading Activity:
- Business bank statements
- VAT registration certificate
- Recent financial accounts
- Employer’s Liability Insurance Certificate:
- Covering at least £5 million
Additional Documents (Depending on Business Type):
- Educational Institutions: Accreditation certificates
- Healthcare Providers: Registration with the Care Quality Commission (CQC)
- Charities: Proof of charitable status
Genuine Vacancy Evidence:
- Job descriptions
- Salary details
- Recruitment advertisements (if applicable)
Failing to submit the correct documents is a common reason for Sponsor License refusals.
How to Apply for a Sponsor License
Step 1: Assess Your Eligibility
Before applying, ensure your business meets all eligibility criteria, including:
- Having appropriate HR systems in place
- Meeting the genuine vacancy requirement
- No recent history of immigration law violations
Step 2: Gather Required Documents
Collect all necessary documents as outlined above. Ensure they are:
- Current and up-to-date
- Clear and legible (if scanned)
- Translated into English (if applicable)
Step 3: Complete the Online Application
- Visit the UK Visas and Immigration (UKVI) website.
- Fill out the Sponsor License application form (LMS Application).
- Provide detailed information about your business and the roles you intend to sponsor.
Step 4: Pay the Application Fee
The fee depends on your organization’s size and type:
| Business Size | License Type | Fee |
|---|---|---|
| Small business/charity | Skilled Worker | £536 |
| Medium/large business | Skilled Worker | £1,476 |
| Temporary Worker | All organizations | £536 |
Note: A small business is defined as having:
- Annual turnover of less than £10.2 million
- Fewer than 50 employees
- Assets worth less than £5.1 million
Step 5: Submit the Application
After completing the online form:
- Print the submission sheet.
- Sign it by the Authorizing Officer.
- Send it with all supporting documents to the address provided by UKVI.
Step 6: Prepare for a Compliance Visit
UKVI may conduct a pre-license compliance visit to assess:
- The authenticity of your business
- Your HR and record-keeping systems
- Your ability to meet sponsorship duties
Be prepared for this inspection, as failing the compliance visit can result in application refusal.
Sponsor License Decision and Processing Time
The standard processing time for Sponsor License applications is 8 weeks from the date UKVI receives your application. However, UKVI offers a priority service (for an additional fee of £500) that can reduce processing time to 10 working days, subject to availability.
Possible Outcomes:
- Approval: You’ll receive a Sponsor License valid for 4 years. You’ll be added to the Register of Licensed Sponsors and can start issuing Certificates of Sponsorship (CoS).
- Refusal: If your application is refused, reasons will be provided. In most cases, there is no right of appeal, but you can reapply after addressing the issues.
Common Reasons for Refusal:
- Incomplete or incorrect documentation
- Failing the compliance visit
- Past immigration violations
- Inability to demonstrate a genuine vacancy
After Getting Your Sponsor License
Once approved, you’ll have ongoing responsibilities to maintain your license and remain compliant with UK immigration laws.
1. Using the Sponsor Management System (SMS)
The SMS is an online platform for managing your sponsorship duties. Through the SMS, you can:
- Issue Certificates of Sponsorship (CoS)
- Update company details
- Report changes in sponsored workers’ circumstances
- Renew your license when due
2. Sponsorship Duties
Failure to meet sponsorship duties can lead to license suspension or revocation. Key duties include:
Monitoring Duties:
- Track employee attendance
- Keep contact details up-to-date
- Monitor visa expiry dates
Reporting Duties:
Report to UKVI within 10 working days if:
- A sponsored worker doesn’t start their job as expected
- An employee’s contract is terminated
- The worker changes roles within your company
- You suspect the worker is breaching visa conditions
Record-Keeping Duties:
- Copies of sponsored employees’ passports and visas
- Employment contracts
- Proof of recruitment processes
Managing Certificates of Sponsorship (CoS)
A Certificate of Sponsorship (CoS) is an electronic document (not a physical certificate) that assigns a unique reference number to each sponsored worker. This number is required when the worker applies for a Skilled Worker visa.
Types of CoS:
- Defined CoS: For workers applying from outside the UK.
- Undefined CoS: For workers already inside the UK (e.g., switching from another visa category).
How to Apply for a CoS:
- Log into the Sponsor Management System (SMS).
- Request the appropriate type of CoS.
- Provide job details, including salary and work location.
Key Considerations:
- Ensure the job meets the minimum salary threshold (usually £26,200 per year or £10.75 per hour, depending on the role).
- The worker must meet the English language requirements.
Sponsor License Ratings
When you receive your license, UKVI assigns a rating based on your compliance:
A-Rating (Full Sponsor Status):
- Allows full sponsorship privileges.
- You can issue CoS and sponsor new workers.
B-Rating (Sponsor Under Improvement):
- Issued if compliance issues are identified.
- You must follow an action plan to regain A-rating.
- You cannot sponsor new workers until you improve.
Failure to meet the requirements of an action plan can lead to license revocation.
License Renewal
A Sponsor License is valid for 4 years. To continue sponsoring workers after this period:
- Apply for renewal at least 3 months before expiration.
- Submit the renewal application via the SMS.
- Pay the renewal fee (same as the initial application fee).
Failure to renew on time can lead to:
- Inability to sponsor new workers
- Revocation of current sponsorships, affecting existing employees
Compliance Visits and Audits
UKVI conducts both announced and unannounced visits to ensure ongoing compliance. During a visit, officers may:
- Interview key personnel and sponsored workers
- Review HR records and systems
- Verify that jobs meet the skill and salary criteria
How to Prepare:
- Keep all employee records organized and up-to-date.
- Ensure key personnel are familiar with sponsorship duties.
- Conduct internal audits regularly to identify gaps.
Common Challenges and How to Overcome Them
- Failing to Demonstrate a Genuine Vacancy:
- Provide clear job descriptions and recruitment evidence.
- Ensure roles meet the required skill level.
- Inadequate HR Systems:
- Implement robust attendance tracking and record-keeping systems.
- Train staff responsible for immigration compliance.
- Mismanagement of CoS:
- Assign CoS only when the job meets Home Office requirements.
- Regularly review your CoS allocations to prevent misuse.
- Failure to Report Changes:
- Set reminders for reporting deadlines.
- Keep regular communication between HR and line managers to capture changes early.
Conclusion
Applying for a Tier 2 (Skilled Worker) Sponsor License is a detailed process that requires careful preparation, robust HR systems, and a thorough understanding of immigration compliance. By following this guide, UK employers can navigate the complexities of the application process, maintain compliance with Home Office requirements, and successfully sponsor skilled workers from around the world.
Securing a Sponsor License not only opens the door to global talent but also enhances your organization’s ability to compete in an increasingly interconnected world. Stay proactive, stay compliant, and make the most of the opportunities that skilled sponsorship can bring to your business.
Fola Davies