What is a Sponsor Licence?
If you are a business that is looking to hire a worker from outside the European Economic Area (EEA) you must apply for a Sponsor Licence. This equally applies to small businesses and charities.
This is a complex process and you will be required to provide specified evidence as designated by the Home Office. You must demonstrate to the Home Office that you have an organised and efficient HR systems in place to attain the fulfilment of your sponsorship duties once you have acquired the sponsor licence.
There are certain employer Sponsor Licence requirements you must meet before you can make an application. Before you can make a Tier 5 or Tier 2 Sponsorship Licence application, you must decide which company member(s) will be representing the company. Any members who represent you must be an executive/senior member of the company. As part of the application process, you will be required to prove that you are a legitimate business which needs the use of migrant talent. This is called the ‘genuine business test’. Once this has been arranged, you can apply for a Tier 2 Sponsorship Licence. In most cases, you will need to demonstrate that your company is genuinely trading and that there is a genuine vacancy for the non-EEA migrant, which cannot be filled by a settled worker in the UK.
All sponsors have to be fully aware of their immigration duties and have processes and systems in place to both meet these requirements and to maintain records as evidence of their compliance.
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Business Sponsor Licence
Business sponsor licences allow UK businesses to sponsor non-EEA nationals to work in the UK. If you want to sponsor someone under the points-based immigration system, you must hold a sponsor licence. Once this licence is granted to your company, it will allow a non-EEA national to make an application for their Tier 2 (General) or Tier 2 (Intra-company Transfer) work visa.
The importance of holding a Sponsor Licence is again reiterated under the Government announcement for post-Brexit new immigration system which will enable skilled workers to come to the UK to help grow UK economy and contribute to public services. This will be a global system which prioritises those who can add the most to the UK economy and society, wherever they are from. While the details are yet to be confirmed, we know at present that confirmed job offers will confer extra points for the applicant (migrant) and employer sponsorship by an approved (licensed) employer will remain a key requirement for the vast majority of migrants.
Types of sponsor licence
There are different types of sponsor licence available, so it’s important that prior to preparing your application, you identify the right licence for you and your prospective worker.
Tier 2 (sponsor licence) visa
The Tier 2 sponsor licence is the most common visa that’s sought for by businesses. It enables companies to hire a skilled worker from outside the EEA for an extended period of time. This licence provides businesses with a range of options, including:
- General – suitable for a role on the shortage occupation list, or when the talent isn’t available in the UK job market
- Intra-company transfer – ideal for businesses who operate in different countries and need to relocate an employee on a long-term basis. It can also be suitable for graduate training programmes.
- Sportsperson – for sportspeople or coaches who are taking roles at the highest level in their chosen sport.
- Minister of Religion – available for those who are travelling to the UK for a long-term position in a religious organisation.
Tier 4 (sponsor licence) visa
The Tier 4 sponsor licence is suitable only for education organisations who are enrolling students from outside of the EEA. In order to be granted the visa, an establishment must offer courses for full-time students and continue to monitor the student, ensuring they attend their classes and contacting the authorities should a student leave their course prematurely.
Tier 5 (sponsor licence) visa
Tier 5 sponsor licences are suitable for temporary workers who are only looking to work in the UK for a short period of time, usually for a maximum of 12-24 months. This can include charity and religious workers, creatives and sportspeople, exchanges authorised by the government and international agreements.
What is the resident labour market test?
The resident labour market test, or RLMT, requires you to advertise the job on offer if it’s not already on the shortage occupation list. This ensures there are no suitable workers already in the UK permanently, essentially proving that you need to hire from another country.
RLMT is required for Tier 2 General, Tier 2 Minister of Religion, Tier 5 Creative and Sporting and Tier 5 Religious Workers. There are several rules in place to stay compliant, including placing at least two adverts. Again, this is an area where specialist lawyers can add a lot of value, making sure everything is done properly without delays.
Sponsor Licence fees
We provide a tailor made service to ensure we meet your specific needs and requirements. Our Professional Fees for Sponsor Licence application starts from £1800 Plus VAT (If applicable). The fees to pay on obtaining a sponsor licence will be lower for charities and small businesses who have 50 employees or fewer and have an annual turnover of £10.2 million or less. The Tier 2 sponsorship licence cost is £536, while for medium to large businesses, it is £1,476. The same costs apply should you be requesting Tier 2 and Tier 5 at the same time.
However, if you’re looking to add a Tier 5 to an existing Tier 2, there will be no fee. To add a Tier 2 to a Tier 5, there is no fee for small businesses, but there will be a fee of £940 for medium to large organisations.
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Osbourne Pinner is available to provide sponsor guidance for Tier 2, Tier 4 and Tier 5 visas.
Applying for a sponsor licence
As a basic requirement for obtaining a sponsor licence, you must be able to prove that you are a genuine business who is lawfully operating within the UK, and are able to carry out the duties involved, including appropriate HR and recruitment processes.
When applying for a Tier 2 sponsorship licence, you will also be required to demonstrate that your employment offer is genuine and that it meets the required skill level and rate of pay.
The application process will require you to complete an online application and provide a range of documentation that provides evidence as to your business’s capabilities, the prospective employee and the role in question. Once these have been submitted, the UK Immigration and Visa agency may then visit your premises to assess whether or not your business is compliant with their regulations.
When obtaining a sponsor licence, you’ll also need to comply with the illegal working requirements. These state that non-EEA workers must provide documentation that proves their right to work before being hired.
Extending or switching a sponsor licence
When a sponsor licence is coming to an end, you can choose to extend the licence, switch it to another tier or apply for permanent settlement.
Extending you Tier 2 sponsor licence
You can renew a tier 2 sponsor licence within three months of the expiry date. The requirements are generally the same as they were with the initial application, with the extended licence lasting another four years.
Switching to Tier 2
Another option is to switch to a Tier 2 sponsor licence visa as your existing visa comes to an end. You can apply to switch from Tier 4 to Tier 2 within three months of the completion of your course. With generally 3-4 months left on a Tier 4 visa after the course is completed, that gives you a total of 7 months to apply for the switch.
While you can’t technically switch from a Tier 5 to a Tier 2, you can apply for a Tier 2 after you have stopped using your Tier 5 visa. In other words, after you have returned to your country of residence. Given the time critical nature of moving from Tier 4 and Tier 5 to Tier 2, it’s certainly an area where immigration solicitors can add a lot of value.
Applying for permanent settlement
Once you have lived in the UK for five years, you can apply for permanent settlement from your Tier 2 visa. This is known as Tier 2 Indefinite Leave to Remain. You will need to meet a few criteria, such as a minimum annual salary and language requirements.
The minimum annual salary stands at £36,200 in 2020/22 financial year, rising to £36,900 in 2021/22 and £37,900 in 2022/23. This needs to come from one primary job. You will also need to pass tests for language capability and knowledge of life in the UK.
Upcoming changes to sponsor licences
From 1st January 2021, the UK’s post-Brexit immigration system will come into place, potentially affecting hundreds of workers across the nation. Under the changes, workers who are from the current European Economic Area will also need to secure a visa to remain working and living in the UK. As such, it’s crucial that businesses assess their current workforce and identify whether they will need to acquire a sponsor licence.
If your business does need to obtain a Tier 2 sponsor licence, then you will need to check their eligibility. Check if they meet the following criteria:
- Language – workers are required to be able to speak English to be eligible.
- Salary – to qualify for a Tier 2 visa, your worker must be earning at least £25,600 unless they satisfy a different criteria.
- Skill – eligible workers will be in roles that have a skill-level equal to A-level, or RQF3.
With Tier 2 sponsor licences taking between three to five weeks to be considered, and a potential for applications to be refused, it’s essential to start preparing your application as soon as possible.
Your dedicated immigration solicitor will be able to help you in creating your application, as well as gather all of the supporting evidence required, ensuring the process of approval is smooth and straightforward.
Arrange a consultation
If your business is looking to obtain a sponsor licence, Osbourne Pinner is available to provide sponsor guidance for Tier 2, Tier 4 and Tier 5 visas. With over 18 years of first-hand experience in securing sponsorship licences and managing compliance, our team of solicitors are here to help you sail through every step in hiring and retaining your ideal candidate.
Whether you’d prefer to call us, meet us in person or arrange a video call, please do not hesitate to get in touch for a free, no-obligation initial chat. Our seasoned and dedicated London-based immigration solicitors are here to help.
Contact us on 0203 980 9348 or firstname.lastname@example.org
Sponsor Licence FAQs
A sponsor licence is granted by the UK government to an organisation or individual who sponsors a foreign employee to work within a business. This licence equally applies to small businesses, charities and other unpaid work.
However, UK Visas and Immigration (UKVI) may need to visit a business’s premises to check they are suitable.
The Home Office looks at who can add the most to the UK economy and society by analysing several suitability measures which ultimately determine whether the licence will be granted or refused.
Criteria that are assessed include whether a business has a genuine vacancy, whether a company has suitable human resources policies to meet sponsor duties and whether the Home Office is able to conduct regular checks to ensure compliance.
In many cases, if an application is refused, a business will not be able to apply again for another six months. Two of the most common reasons behind refusal include not paying the minimum annual salary, or if the Home Office believes a vacancy is not genuine.
There is no specified length of time that a business must have been trading for. Once a company is legally operating, has registered with HMRC and has employer’s liability insurance, they will be able to apply.
The responsibilities for the sponsor licence need to be assigned to a member of staff, or multiple members, known as Authorising Officers. It will be their job to handle all of the record-keeping and reporting on behalf of the sponsor.
The Authorising Officer should be permanently based in the UK, a paid member of the business and meet criminal convictions requirements.
At all times, a business must keep a photocopy or electronic copy of the relevant page of each sponsored migrant’s passport or Biometric Residence Permit and contact details.
These should be ready to provide to the Home Office upon request, and Authorising Officers should also inform them on any significant changes to an employee’s contract of employment such as a promotion or change in core duties within 20 working days.
As a minimum, a sponsor licence is granted for four years and can be renewed by making an application to the Home Office. The four years will start from the date the licence is issued, even if a business is not immediately going to sponsor anyone.
However, keep in mind that the Home Office can revoke them if a business or individual does not comply with sponsorship duties. If a sponsor licence is revoked, then it will impact on a business’ ability to employ any overseas workers in the future. Failure to carry out duties leading to hiring someone illegally can result in a civil penalty of up to £20,000 per worker.
If a business misses a renewal for a sponsor licence, they will immediately lose their licence and the Home Office will reduce the migrant’s leave to 60 calendar days.
If an application to renew is made in the future, the employer will be treated as if they were a new sponsor, and any foreign workers will be treated as new recruits for the purposes of sponsorship.
Government regulations specify that a job must have been advertised to applicants within the EEA for at least 28 calendar days before being promoted overseas, known as the resident labour market test (RLMT).
It will also need to be advertised in a minimum of two places, including the government website and Jobcentre Plus.
Under Tier 2 or Tier 5 General, a business will need to pay sponsored employees a minimum salary. From the outset, it should be clear what this figure will be and whether there is potential for the salary to increase in the future.
There are two different thresholds for salaries, and within them are different rates depending on how the prospective employee is classified – either an experienced or new applicant. The first threshold is a general minimum salary level, which applies across the board, and the second is a role-specific salary level, unique to each job title.
Yes, but they must ensure they are disclosing this information on the certificate of sponsorship to comply with the law.
Once you have been granted a sponsorship licence, you will then have access to the Sponsorship Management System. This is a portal where you can:
- Create Certificates of Sponsorship for employees under either Tier 2 or Tier 5
- Report any changes to the circumstances of your employees
- Review, renew and manage your organisation’s sponsorship licence
When working with an immigration solicitor, you will be able to appoint them as an additional user on the SMS. This will enable them to fulfil any duties required on the system.
A Certificate of Sponsorship (CoS) is a reference number given to an employee, enabling them to apply for their visa. As an employer, you will need to assign one to every foreign worker you hire.
There are two types of CoS – restricted and unrestricted. A restricted CoS will be required for the following:
- A Tier 2 worker who will be paid less than £159,600 and will not be working in an inward investment role.
- Dependents of Tier 2 migrants who will be switching to a Tier 2 visa.