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How to renew a sponsor licence

UK employers who want to continue to employ sponsored employees on work visas need to renew their sponsor licence. What should be a straightforward task for UK employers is fraught with the complexities of completing Home Office paperwork correctly. Here’s our guide for businesses on renewing your sponsor licence and when to seek advice from specialist business immigration solicitors

Should my business renew its sponsor licence?

A sponsor licence lasts four years unless your business asks for the licence to be terminated early or the Home Office revokes the sponsor licence because you did not comply with your sponsor licence reporting and recording duties. The immigration rules say if a business does not renew its sponsor licence it cannot continue to employ its existing sponsored workers and cannot recruit additional sponsored workers.

Some UK business owners may question whether they need to renew their sponsor licence because their current recruitment needs are met without having to employ significant numbers of staff on skilled worker visas. However, the supply of EU nationals who can work in the UK free of immigration controls is now restricted because of the end of free movement for EU workers and the 2021 closure of the EU Settlement Scheme and the reduction in the number of EU workers available to employ without requiring sponsorship may affect you if existing employees leave or retire.

If your sponsor licence lapses then you will need to apply for a fresh sponsor licence rather than apply for a renewal. If you are debating about whether to apply to renew your sponsor licence speak to our business immigration solicitors for licence renewal advice.

Is it difficult to renew a sponsor licence?

Many business owners assume that their HR staff can quickly apply for the renewal of the sponsor licence without needing to spend significant time on the renewal application or requiring the help of business immigration solicitors. However, that isn’t necessarily the case.

Business immigration solicitors say sponsor licence renewals can be straightforward if: 

  • Your business has not encountered any difficulties during announced or unannounced compliance visits 
  • The sponsor licence has not been suspended during the previous sponsor licence period 
  • A mock sponsor licence audit has been carried out and no significant issues have been found during the thorough internal audit 
  • Your sponsor licence has been managed by a professional sponsor licence management service provider, or you have experienced and efficient key personnel in place with established licence recording and reporting systems that are kept up to date. 
  • Enough time is allowed for the preparation of the sponsor licence renewal application, to get any necessary renewal paperwork together and to ensure that the business is ready for a Home Office sponsor licence compliance visit, just in case the renewal application triggers an audit

How do you prepare for a sponsor licence renewal application?

How much preparation is required will depend on the nature of your sponsor licence renewal application. Even if your application can be conducted under the streamlined renewal process it is advisable to be prepared just in case there is an issue with the application, or a subsequent compliance visit is triggered. 

Preparation is the key to a successful renewal application and you should therefore check the: 

  1. HR files 
  2. Compliance with sponsor licence reporting and recording duties 
  3. Right-to-work checks and adherence to the prevention of illegal working legislation 
  4. Training needs of key personnel 

If you think that the preparation work is too much trouble, it is far easier to put the time in before submitting your renewal application rather than challenging a Home Office decision to refuse your sponsor licence renewal application. A good starting point for sponsor licence basics is our article ‘Sponsor licence: Guidance for employers’.

When does a business need to renew its sponsor licence?

A sponsor licence is granted for an initial 4-year period. If you want to continue to sponsor workers it is important to submit the sponsor licence renewal application before the date of expiry of the previous licence. 

A business with an existing sponsor licence can apply for the renewal of its sponsor licence up to 3 months before the expiry date. The sponsor licence expiry date is detailed on the summary page of the sponsor management system. 

What is the sponsor licence renewal application process?

A sponsor licence renewal application is submitted online through your sponsor licence management system. It is an obvious point (but often forgotten) that all records, reports and changes to key personnel should be up to date before the online application is submitted. Failure to do so can result in the refusal of the renewal application.

The sponsor licence renewal application process depends on whether your company qualifies for a streamlined renewal application process or not. Home Office officials should only use the streamlined renewal process if there are no compliance concerns. 

The Home Office guidance identifies compliance concerns as including but not limited to: 

  • A sponsor licence that is suspended at the date of the renewal application 
  • A sponsor licence holder who is subject to an action plan or an ongoing compliance investigation 
  • Where a special marker has been placed against a company. For example, because the business has been ordered to pay civil penalties or there are what are referred to as ‘security service concerns’ 

The streamlined sponsor licence renewal application process

If your business qualifies for the streamlined sponsor licence renewal application process the renewal is quicker and simpler as the Home Office will not carry out the full renewal and checking process comprising:

  • Company and insolvency checks 
  • Reviewing your certificate of sponsorship usage 
  • Looking at the licence structure 
  • Assessing sponsor management system visit history and any outstanding change requests 
  • Reviewing risk profiles and checking accreditation and registration details and any other trading checks 
  • If necessary, undergoing a compliance visit from a Home Office official 

The sponsor licence renewal assessment process

When the Home Office considers a sponsor licence renewal application on a non-streamlined basis, they will assess the business to see if: 

  • The business is operating legally in the UK 
  • The business remains suitable to sponsor workers 
  • The business can meet its reporting and recording duties 
  • The business correctly assigns certificates of sponsorship to sponsored workers 

What is the sponsor licence renewal fee?

The sponsor licence renewal fee depends on the type of sponsor licence your business is applying for and the size of your business. The current fees are: 

Type of sponsor licence Small business or charitable sponsor Medium or large employer 
Sponsor licence for skilled worker visa or senior or specialist worker visa£536 £1,476 
Tier 5 – temporary worker£536 £536 

Some company activities mean your company will not qualify as small. For example, if your business is an authorised insurance company, a banking company, or an e-money issuer. Your company will qualify as small if it is a qualifying company and meets two of the following criteria: 

  • Your company turnover is not more than £10.2 million 
  • The balance sheet total is not more than £5.1 million (this figure is the aggregate of the amounts shown as assets in the company balance sheet) 
  • The number of your company employees does not exceed fifty (the number is taken as an average during your financial year) 

A parent company will qualify as a small company if the group headed by it qualifies as a small group, namely, it meets two of the above criteria. 

Getting the sponsor licence renewal application fee wrong will delay your sponsor licence renewal. If you are uncertain about whether your company qualifies as a small company speak to a business immigration solicitor for detailed advice.  

How do you prepare for a Home Office sponsor licence renewal audit?

Your renewal application may result in a Home Office audit and visit to your premises. Knowing that a renewal audit is a possible outcome of the submission of your renewal application is important as it means that you can prepare for a potential audit before submitting your application. 

If a Home Office audit takes place, the Home Office official may ask to see: 

  • HR records 
  • Sponsored workers to interview them 
  • Key personnel operating the sponsor licence and sponsor licence management system 

For more guidance on Home Office compliance and renewal visits read our article How to handle a Home Office sponsor compliance visit

What happens if a company fails a sponsor licence renewal audit?

If the Home Office chooses to conduct an audit as part of the renewal application process and compliance action is recommended the case is referred to the suspensions and revocation team. The following decisions could be made: 

  • Grant the licence renewal application but downgrade the sponsor licence from an A-rating to a B-rating 
  • Suspend the licence and issue an action plan 
  • Revoke the licence 

If at the time of your sponsor licence renewal application, your licence is B-rated and you are under a sponsorship action plan the Home Office will not make a final decision on your renewal application until the sponsor licence action plan period has expired. 

When is a sponsor licence renewal application refused?

Business immigration solicitors cannot specify every reason for the refusal of a sponsor licence renewal application, but generally, renewal applications are refused where the business: 

  • Has not complied with its sponsor licence reporting or recording duties 
  • Has not retained correct paperwork or documents on sponsored employee’s HR files 
  • Has not notified the Home Office of changes in key personnel  
  • Has not carried out right-to-work checks or complied with the legislation designed to prevent illegal working. For information on what to do if your business is prosecuted for illegal working read our guide What to do if your business is prosecuted for illegal working 
  • Has not paid a sponsored employee the correct minimum salary for their job or has employed the sponsored worker to do a job that is different to that stated on the certificate of sponsorship 

Some of these errors can be addressed if expert business immigration legal advice is sought at an early enough stage so that any errors are rectified and reported before the submission of the renewal application. 

What happens if a company doesn’t apply to renew the sponsor licence?

If a licence lapses, then your business loses the ability to: 

  • Recruit new workers from overseas who are subject to immigration control and who require a sponsoring employer to  apply for a skilled worker visa or senior or specialist worker visa  
  • Retain your existing sponsored workers. The sponsored workers will have their certificates of sponsorship cancelled and their visas will be curtailed to 60 days (or the time remaining on their work visa if their visa will expire in less than 60 days). Within this period, the sponsored worker will need to secure employment with an employer with a sponsor licence or  switch visas or leave the UK 

The consequences of not applying to renew your sponsor licence, or the application being refused, are potentially economically damaging to your business and life-changing for your sponsored workers and their families. 

If you are a UK-based business and need advice on applying for your sponsor licence renewal or if you are concerned about how management aspects of your sponsor licence will affect the success of your sponsor licence renewal application, our business immigration law solicitors can help. 

About our expert

Fozia Iqbal

Fozia Iqbal

Senior Business Immigration Solicitor
Fozia has been practising in the field of immigration law for over 20 years, specialising in Business Immigration since 2015. Fozia has advised an array of businesses, from start-ups to multinationals, owner-managed businesses through to SMEs, as well as individuals looking for immigration solutions. With a range of experience across the board, it is unusual for her to come across an immigration issue that she cannot tackle. 

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