The Home Office has released a crucial update regarding sponsor licences, greatly simplifying the renewal process for companies. We will explore the potential implications of this change and what it signifies for UK businesses that act as sponsors.

On 24 January 2024, the Home Office announced a significant update regarding sponsor licence renewals via the Sponsorship Management System (SMS). In a move to streamline processes, it was stated that any sponsor licences due to expire on or after 6 April 2024, will now automatically be extended for an additional 10 years from their original expiry date.

Traditionally, sponsor licences were issued for a four-year period, and would need to be renewed before they expired. This renewal process served not only as an administrative requirement but also as an essential compliance checkpoint, ensuring that all licence details remained current, including information on key personnel, SMS users, and the organisation's address. It also covered volumes of Certificates of Study (CAS), Certificates of Sponsorship (CoS), and critical company details such as ownership and business nature.

What does this mean for sponsor licence audits?

The Home Office has historically conducted audits of licensed sponsors once within the four-year licence period. With the elimination of licence expiry under the new policy, the frequency of future audits by the Home Office remains uncertain. However, recent interactions with UKVI indicate a heightened focus on sponsor compliance enforcement, leading to an increase in audits among our clients.

The responsibilities incumbent on sponsoring businesses are multifaceted and compliance is paramount. Failure to adhere to these obligations, especially in terms of record-keeping, reporting, and maintaining behaviours aligned with licence holder standards, may result in severe consequences. These include financial penalties and revocation of the licence, which would result in the inability to sponsor foreign workers and require current sponsored employees to leave the UK. Additionally, it would lead to reputational damage as the company's name will be listed among those with revoked licenses.

The consequences of non-compliance

In December 2023, the UK government announced a five-point immigration plan aimed at reducing net migration, which has led to expectations of heightened scrutiny of licensed sponsors. This includes a significant increase in fines for illegal employment, set to take effect on 13 February 2024, with fines for a first offence rising from £15,000 to £45,000, and for repeat offences from £20,000 to £60,000.

A recent case highlighted the repercussions of non-compliance: the owner of a small pizza restaurant in Cumbria was fined £20,000 and was banned from serving as a company director for six years for employing two illegal workers without the necessary right to work checks. This case highlights the importance of compliance and the serious implications of breaches, emphasising the need for vigilance in maintaining up-to-date and accurate licence and employment records.

Our Business Immigration team is able to conduct a comprehensive immigration compliance audit to ensure that you will pass a UKVI inspection.

Our experienced team in the UK can guide you through the compliance process, along with assisting you with applications for sponsor licences as well as Skilled Worker visa applications for any prospective employees.

Contact us on +44 (0) 20 7759 5307 or at workpermits@sableinternational.com.

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