Applying for a sponsor licence: avoiding refusals and revocations 

For businesses looking to hire skilled workers from outside the UK, holding a valid sponsor licence is crucial. However, many employers find their applications refused or, worse, their licences revoked due to compliance failures. With recent updates to Home Office guidance taking effect from 31 December 2024, it remains important to stay on top of your obligations. Here’s what you need to know.

Sponsor licences can be refused at the application stage for many different reasons. The Home Office assesses every application carefully, and the most common reason for refusal is failing a Home Office inspection. A key part of this inspection is checking whether your HR systems are robust enough to meet the required standards.

As a sponsor, you must prove that you can meet the reporting and record-keeping duties from the moment your licence is granted. This means having clear processes in place to monitor and report on your sponsored workers.

It is essential to understand what the duties are to see what the human resource system needs to monitor. Here, we look at reporting duties regarding workers.

You must notify the Home Office within 10 working days if:

• A sponsored worker is not complying with their visa conditions while employed.
• A sponsored worker does not begin work within 28 days of the work start date
• An employment contract ends early or changes significantly
• A sponsored worker is absent from work without permission (excluding permitted leave, such as annual leave or sick leave).

As such, you must show your company has ways of monitoring whether workers turn up to work or not. This is especially pertinent if you operate remote or with hybrid working patterns. You must show online ways of ensuring their employees are working as required.

There are additional record keeping duties you must ensure as a sponsor. These include maintaining accurate records, such as:

• Right to work documents
• Employment contracts
• Absence records

Good record-keeping ensures compliance and makes reporting easier, reducing the risk of penalties or revocation. In addition, if you do not have these systems in place at the application stage, your application may be refused. 

Holding a sponsor licence comes with ongoing responsibilities, such as the above mentioned record keeping duties. If these are not met, the Home Office may revoke your licence. As of 31 December 2024, new grounds for revocation include:

• Clawing back the costs of a certificate of sponsorship (proposed to increase to £525 for a skilled worker)
• Clawing back the sponsor licence fee and administrative costs
• Sponsoring a worker for personal reasons (except for sole traders)

A refused or revoked licence can come with a cooling-off period of either 12 months or 5 years, during which you cannot reapply. There is no right of appeal, so it is critical that you take steps to mitigate risks of refusals or revocations.

If your licence is at risk of revocation, it may be possible to submit representations to the Home Office explaining why you failed to meet your duties. 

If your application has been refused, you can request an error correction, but this is only an option if the refusal was due to a Home Office caseworker mistake. Otherwise, you must reapply after the cooling-off period, showing that the previous issues have been rectified.

With new Home Office rules coming into force, employers need to review their compliance systems and ensure they are up to standard. If you’re unsure whether your HR processes meet the necessary requirements, seeking professional legal advice could help safeguard your ability to hire the talent your business needs.

If you have concerns about your sponsor licence application or compliance obligations, contact our legal team for expert guidance.