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What to do if Your Sponsor Licence Application is Rejected or Refused

If your business's application for a sponsor licence is rejected or refused by the Home Office you may contemplate giving up on your plan to secure a sponsor licence to enable you to recruit from overseas or want to appeal the decision.

In this article, our business immigration solicitors look at what your business can do if your sponsor licence application is either rejected or refused by the Home Office.

Has your sponsor licence been rejected or refused?

It is important to check if your licence application has been rejected or refused. If it was rejected you will normally get your licence application fee refunded and you can reapply straight away. When an application is rejected, business immigration solicitors recommend that you take the opportunity to check all aspects of your application and take legal advice before you resubmit the application. That reduces the risk of your resubmitted application being rejected or refused for other reasons.

If your application was refused the application fee will not be refunded. Depending on whether the Home Office has imposed a cooling-off period you may not be able to reapply for another licence straight away.

Why are sponsor licence applications rejected?

The two common reasons for sponsor licence rejections are not paying the correct Home Office fee or not sending a necessary document. Whilst it can be annoying for an application to be rejected it is less frustrating than the Home Office accepting the application and fee and then refusing the application at a later stage because of missing paperwork.

It is surprisingly common for a business to pay the wrong application fee as there is a two-tier fee scale. The application fee is £536 if your company is classed as small or if your organisation has charitable status. The fee for medium to large size companies is £1,476. Your business will fall into the small classification if it meets the definition of a small company in the Companies Act 2006.

It pays to think of a rejection as a wake-up call so you can check every other aspect of your application or take specialist legal advice. Even if you think you put forward a compelling case for why your company requires a sponsor licence the application could be refused if you have not followed the complicated rules on supporting paperwork. The documents you need to provide depend on the size of your organisation and sector.

Can a company appeal against the rejection or refusal of a sponsor licence?

A company cannot appeal against the rejection or refusal of a sponsor licence application. If a licence application is rejected it is just a case of resubmitting the application – but only when you have sorted out the problem that led to the application being rejected and checking the rest of the application and paperwork.

If a licence is refused you would assume that your business has a right to appeal the Home Office decision but you do not. That is why it is crucial to make sure that your application meets all the criteria supported by the correct paperwork before you send it off to the Home Office.

Whilst there is no right of appeal there are things that a business immigration solicitor can do for you if your licence application is refused. What your lawyer can do will depend on the refusal reasons and if the Home Office imposed a cooling-off period.

Cooling off periods and sponsor licence refusals

When a licence application is refused you are told why and told if a cooling-off period has been placed on your submitting a fresh application within a specified period. If there is no cooling off period you can reapply straight away – your only losses are having to pay a second application fee and the delay in receiving your licence. Business immigration lawyers stress there is no point in putting in a fresh application until you have sorted out the reasons for the refusal as you will just be wasting your time and a second application fee.

The position is more complicated if your business is told that it cannot put in a new licence application until the end of the cooling-off period. If you are prevented from making a fresh application the cooling-off period is normally 6 to 12 months but it can be up to 5 years. The length of the cooling-off period can be challenged. For example, you might want to argue that one should not have been imposed at all for an innocent mistake or that a 5-year ban was too harsh as it should only be used in cases where an applicant has made dishonest or fraudulent representations.

Options if a sponsor licence application is refused

Although you do not have a right of appeal, a business does have options, including:

  1. Making an error correction review application
  2. Judicially reviewing the Home Office's decision to refuse your licence application
  3. Working around the licence refusal by recruiting overseas workers who do not require a sponsoring employer
  4. Making a second application for a sponsor licence – whether you can do this straight away will depend on whether the Home Office placed a cooling off period on your company and its length

The key point is that as soon as you receive a refusal notification take legal advice as there are time limits to challenge a refusal or to question the imposition of or the length of a cooling-off period.

Applying for an error correction review

Your company can apply for an error correction review if you think the decision to refuse the licence was down to a Home Office caseworker’s error or if a Home Office official did not consider the documents provided with the application. The review is not an appeal and you cannot provide additional information or paperwork to clarify the documents supplied with the original application. If your application fell short on detail or evidence it may be best to make a fresh application for a licence.

The time limit to apply for an error correction review is 14 days from the date of the original decision to refuse your sponsor licence application. You can only ask for one error correction review. The form to apply can be found here. The Home Office will normally decide on a review application within 28 days.

Judicially reviewing a Home Office decision to refuse a sponsor licence

Whilst it is possible to apply for a judicial review to challenge a Home Office decision to refuse a sponsor licence most business immigration lawyers use judicial review as the option of last resort because of the expense and time. If your business needs to recruit from overseas then you probably cannot afford to wait for the outcome of a judicial review hearing and you may also question the cost-benefit analysis of a judicial review when compared to your other options.

If you are interested in pursuing a judicial review you can only proceed if the reason your application was refused was either unlawful, unreasonable or procedurally improper. The court will not consider the merits of your application but will focus on how the decision was reached. For example, you have grounds for a judicial review if the Home Office policy is to refuse all applications submitted on a Tuesday or to refuse all licence applications made by companies in the tech or hospitality sectors. The process is not an appeal as you are limited to demonstrating that the Home Office decision was not one that a reasonable body should have come to.

The time limit to apply for a judicial review of a decision to refuse a sponsor licence application is three months from the date of the refusal decision.

Working around a sponsor licence refusal

There are ways to work around a sponsor licence refusal whilst still employing overseas workers and complying with UK illegal working legislation. Working around a refusal may not be a solution for your company if you need highly specialist workers or large numbers of experienced staff who are in chronic short supply in the UK.

There are several visas that allow a person with limited leave to remain to work in the UK without requiring a UK company to sponsor their employment. These visa options include the graduate visa or international students on student visas (allowed to work part-time as part of their visa conditions) or people in the UK on family, spouse or dependant visas. It is essential that if you go down this route on a temporary or long-term basis you conduct right-to-work checks on all your employees before they commence their employment and that you repeat the right-to-work checks on any employees with limited leave to remain.

The penalty for employing one person without the right to work is currently £20,000 but the fines are due to rise to £45,000 to £60,000 per worker. The size of the fine will depend on whether it is a first or second offence. With those eye-watering fines, the option of re-applying for a sponsor licence and the time and hassle involved may not seem as onerous. In addition, your pool of talent using these routes will necessarily be far more limited than being able to access global talent through the skilled worker visa or global business mobility visa routes.

Reapplying for a sponsor licence

The ease with which your business can reapply for a sponsor licence depends on the reasons for refusal and if a cooling-off period was applied. There is no point in resubmitting an application without addressing the reasons for refusal. Common reasons for refusal include:

  1. Not submitting the correct supporting documents – these depend on the size of your business and sector and the type of licence your business wants. The detailed requirements can be found in Appendix A: supporting documents for sponsor licence application
  2. Not sending additional documents in time – if the Home Office asks for extra paperwork and it is not supplied within their time limit
  3. Not showing that your business has genuine vacancies – it is not necessary to evidence this for every type of licence application. A business immigration solicitor can advise on to what extent you should provide supporting evidence. This will depend on your business, its sector and the jobs you are looking to sponsor
  4. Appointment of unsuitable key personnel – your business needs to appoint an Authorising Officer, a Key Contact and a Level 1 User before submitting your application. The Authorising Officer and Key Contact can be the same person but they must be a paid employee or office-holder. At least one Level 1 User must be an employee, partner or director in your organisation but after your licence is granted you can appoint a third-party sponsor licence management service to help act as Level One User and you can also appoint Level 2 Users. It is worth checking the background of any proposed key personnel as if they have unspent convictions or have worked in a firm in a similar capacity where the business had its sponsor licence revoked, they may be deemed unsuitable to be appointed as key personnel
  5. Issues found by a Home Office caseworker during a pre-licence compliance visit – in some situations the Home Office will carry out a pre-licence inspection to check a business has the systems and procedures in place to comply with its sponsor licence duties. The application will be refused if the business does not. Business immigration lawyers can reduce the risk of an application being refused on this ground by completing an audit of your systems before any Home Office visit is conducted and by recommending changes

Help with a sponsor licence rejection or refusal

If your business has had its sponsor licence application rejected or refused expert advice from business immigration lawyers will help you work out your best way forward. At Harper James, our business immigration solicitors are commercially savvy and understand the financial imperative of securing your sponsor licence when you need to recruit from overseas to meet contractual deadlines or to expand your business in accordance with your business plans. Sometimes it is not just money that is at stake but also your business reputation. Harper James provides the joined-up business immigration, employment and commercial law advice needed when a sponsor licence application is rejected or refused.

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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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