Sponsor Licence Guide for HR

Employers in the UK must hold a valid sponsor licence if they wish to lawfully employ non-UK and non-Irish nationals under the Skilled Worker or other sponsored work visa routes. The sponsor licence system places specific legal responsibilities on employers and requires careful HR oversight to ensure compliance with immigration law.

What this article is about:
This article provides HR professionals and business leaders with a comprehensive guide to the UK sponsor licence system. It explains what a sponsor licence is, why it is required, and the steps involved in applying for one. It also examines the duties and compliance requirements imposed on licence holders, and how HR can manage sponsored workers effectively to mitigate risk and support strategic workforce planning.

A sponsor licence is not only about securing the right to employ migrant workers; it is about demonstrating to UK Visas and Immigration (UKVI) that the organisation has robust HR systems in place to monitor and manage compliance. Failing to meet these obligations can lead to licence suspension or revocation, affecting business continuity and reputation.

This guide will equip HR with the knowledge to navigate the sponsor licence process, understand compliance obligations, and implement effective systems to support overseas recruitment in line with UK law.

 

Section A: Understanding the Sponsor Licence

 

A sponsor licence is the legal foundation for UK employers to recruit and employ workers from outside the UK and Ireland under the points-based immigration system. HR professionals need to understand what the licence is, who needs one, and the different categories of licence available, as this determines how the organisation can lawfully engage overseas talent.

 

1. What is a Sponsor Licence?

 

A sponsor licence is formal authorisation issued by UK Visas and Immigration (UKVI) that allows an organisation to sponsor foreign nationals to work in the UK under specific immigration routes. Without a sponsor licence, employers cannot assign Certificates of Sponsorship (CoS), which are required for migrant workers to apply for visas such as the Skilled Worker visa.

The licence does not guarantee the right to hire anyone from overseas. Instead, it grants the organisation the responsibility of complying with ongoing duties, including monitoring and reporting on the status of sponsored workers. Certain workers, such as Irish citizens, those with indefinite leave to remain, or others with unrestricted work rights, do not require sponsorship.

 

2. Why Employers Need a Sponsor Licence

 

Following Brexit, free movement for EU/EEA nationals has ended, meaning most overseas workers now require immigration permission to work in the UK. For many businesses, particularly in sectors with skills shortages, this means obtaining a sponsor licence is critical to accessing global talent.

Employers need a sponsor licence to:

• Lawfully employ skilled workers from overseas
• Demonstrate compliance with immigration law
• Retain a competitive recruitment strategy in a restricted labour market

 

Without a licence, businesses face significant limitations in filling vacancies and risk penalties if they hire workers unlawfully.

 

3. Types of Sponsor Licences (Worker & Temporary Worker)

 

UKVI issues two broad types of sponsor licence:

• Worker licence – for long-term employment routes, including the Skilled Worker visa and Global Business Mobility routes such as Senior or Specialist Worker.
• Temporary Worker licence – for short-term or specific work categories, such as Seasonal Workers, Charity Workers, and Government Authorised Exchange.

 

Employers can apply for one or both licence types, depending on their recruitment needs. HR must ensure the correct category is selected, as this determines the kind of Certificates of Sponsorship that can be assigned.

 

4. Who Needs to Apply?

 

Any UK organisation intending to employ non-UK and non-Irish nationals who require sponsorship must apply for a sponsor licence. This includes:

• Private companies, regardless of size or sector
• Charities and not-for-profit organisations
• Educational institutions recruiting international staff

 

Even if a business only plans to sponsor a small number of workers, a licence is still mandatory. Organisations that rely on global recruitment strategies or face ongoing skills shortages are most likely to benefit from holding a licence.

Section A Summary
The sponsor licence is the gateway to employing overseas workers in the UK. HR professionals must understand the purpose of the licence, the obligations it brings, and the types of licence available to ensure that recruitment strategies are compliant and aligned with business needs. Without this authorisation, employers cannot lawfully access the global labour market.

 

 

Section B: Applying for a Sponsor Licence

 

Applying for a sponsor licence is a structured process overseen by UK Visas and Immigration (UKVI). HR teams are typically responsible for preparing the application, gathering supporting documentation, and ensuring the business is compliant with eligibility requirements. A poorly prepared application can result in refusal, delaying recruitment plans and adding to costs.

 

1. Eligibility Criteria for Employers

 

To be eligible for a sponsor licence, an organisation must demonstrate that it is:

• A genuine and lawful business operating in the UK
• Capable of meeting sponsorship duties, with HR systems for monitoring staff
• Free from serious unspent criminal convictions for immigration offences, fraud, or other relevant crimes
• Financially stable and able to support its operations

 

UKVI will also consider compliance history and whether proposed key personnel have been involved in previous licence non‑compliance. HR should be able to evidence a genuine need for a licence aligned to eligible roles under the relevant immigration routes.

 

2. Key Personnel Roles (Authorising Officer, Key Contact, Level 1 User)

 

A sponsor licence application requires the nomination of key personnel who will manage the licence:

• Authorising Officer – A senior and competent person responsible for overall compliance.
• Key Contact – The main point of contact with UKVI during the application process.
• Level 1 User – The individual with day‑to‑day responsibility for using the Sponsorship Management System (SMS).

 

Nominees must be suitable and reliable, with no relevant immigration breaches. HR should ensure they have the authority, training, and capacity to maintain accurate records and make timely reports via the SMS.

 

3. Required Documents for Application

 

The application must be supported by documentary evidence to prove the organisation’s legitimacy and compliance capability. Requirements vary by entity type, but typically include at least four specified documents, such as:

• Proof of business registration (Companies House records or charity registration)
• Evidence of trading presence (recent bank statements, VAT registration, utility bills)
• Employer’s liability insurance certificate
• Audited or unaudited accounts

 

HR should ensure documents are current, consistent, and accurately reflect the organisation’s operations, with clear links to the roles intended for sponsorship.

 

4. How to Submit an Application

 

Applications are submitted online via the GOV.UK portal and generally involve:

• Completing the online sponsor licence application form
• Paying the relevant fee
• Uploading supporting documentation
• Providing details of nominated key personnel

 

UKVI may conduct a pre‑licence compliance visit to assess HR systems, recruitment processes, and record‑keeping. HR should be audit‑ready, with clear processes for right to work checks, attendance monitoring, and reporting.

 

5. Application Costs & Fees

 

The sponsor licence fee depends on the size and type of the organisation:

• Small or charitable sponsors – £536
• Medium or large sponsors – £1,476

 

Fees are per licence category. Additional costs may apply during sponsorship, including the Immigration Skills Charge (ISC) and visa application fees for workers. HR should budget for these to ensure the sustainability of sponsored recruitment.

Section B Summary
Applying for a sponsor licence requires employers to meet strict eligibility criteria, appoint competent key personnel, and provide documentary evidence of their legitimacy and compliance capacity. The process carries financial costs and requires preparation to avoid delays or refusals. For HR professionals, getting the application right is fundamental to accessing overseas talent and building a sustainable recruitment strategy.

 

 

Section C: Sponsor Licence Duties and Compliance

 

Holding a sponsor licence brings with it significant compliance responsibilities. UK Visas and Immigration (UKVI) expects employers to act as trusted partners in upholding the integrity of the UK’s immigration system. HR departments play a central role in ensuring these obligations are met. Failure to comply can result in enforcement action, including licence suspension, revocation, or downgrading, which can disrupt recruitment and damage an organisation’s reputation.

 

1. Record-Keeping & Reporting Obligations

 

Sponsors are required to maintain accurate and up-to-date records for each sponsored worker. These include:

• Copies of passports, visas, and Biometric Residence Permits (BRPs)
• Current contact details and residential addresses
• Evidence of recruitment processes and compliant right to work checks
• Contracts of employment and salary details

 

In addition, sponsors must report relevant events to UKVI within 10 working days, such as when a sponsored worker changes job role, resigns, or fails to attend work.

 

2. Monitoring Employee Immigration Status

 

Sponsors must monitor the immigration status of their sponsored workers to ensure they continue to meet visa conditions. This includes:

• Tracking visa expiry dates
• Monitoring working hours and job roles to confirm they align with visa conditions
• Ensuring salary levels meet the applicable thresholds for the visa category

 

HR systems must be sufficiently robust to identify potential breaches before they occur and prevent inadvertent non-compliance.

 

3. HR Systems and Compliance Audits

 

UKVI may conduct announced or unannounced compliance visits both before and after a licence is granted. During these audits, HR systems are examined for:

• Recruitment processes and right to work checks
• Accuracy and accessibility of personnel records
• Systems for monitoring attendance and absences
• Reporting practices for immigration-related events

 

Employers must be audit-ready at all times, with HR ensuring records and processes are consistent, accurate, and compliant.

 

4. Common Compliance Failures & Risks

 

Some of the most common compliance failures include:

• Incomplete or inaccurate record-keeping
• Failure to report changes within required timeframes
• Assigning a Certificate of Sponsorship for an ineligible role
• Paying sponsored workers below the required salary threshold
• Poor HR systems that cannot demonstrate monitoring and control

 

Even seemingly minor failures can trigger enforcement action if UKVI considers them indicative of systemic weaknesses.

 

5. Penalties for Non-Compliance

 

Consequences of failing to comply with sponsor duties can include:

• Downgrading of the sponsor licence rating (from A to B)
• Suspension of the licence pending investigation
• Revocation of the licence, which immediately cancels all sponsored workers’ visas
• Prohibition on reapplying for a sponsor licence for at least 12 months
• Civil penalties and reputational damage

 

Revocation is particularly serious, as sponsored employees’ visas are usually curtailed within 60 days (or until visa expiry, if sooner), leaving them unable to lawfully work unless they secure a new sponsor.

Section C Summary
Compliance is at the heart of the sponsor licence system. HR must maintain accurate records, report relevant changes, and operate effective monitoring systems to ensure full adherence to UKVI requirements. Non-compliance can have severe consequences, impacting both the organisation’s ability to employ overseas workers and its wider reputation.

 

 

Section D: Managing Sponsored Workers

 

Once a sponsor licence has been granted, HR must manage the day-to-day responsibilities of sponsoring workers. This includes assigning Certificates of Sponsorship, using the Sponsorship Management System (SMS), conducting right to work checks, and ensuring the licence is maintained and renewed on time. Effective management of these processes ensures compliance and supports the organisation’s wider workforce planning.

 

1. Assigning Certificates of Sponsorship (CoS)

 

A Certificate of Sponsorship (CoS) is an electronic record, not a physical document, issued by the employer through the SMS. It provides the details of the role and worker being sponsored.

There are two types of CoS:

• Defined CoS – for Skilled Worker visa applicants applying from outside the UK. These must be requested individually via the SMS.
• Undefined CoS – for workers applying from within the UK and for certain other visa categories. These are allocated annually.

 

HR must ensure that job roles meet eligibility criteria and that CoS assignments are accurate in role description, salary, and employment conditions. Incorrect assignments can lead to visa refusals or compliance breaches.

 

2. Sponsorship Management System (SMS)

 

The SMS is the online platform used by sponsors to manage their licence. Through the SMS, HR can:

• Assign Certificates of Sponsorship
• Report changes to worker circumstances
• Update details of the organisation or key personnel
• Renew the licence or apply for additional allocations of CoS

 

Only nominated Level 1 and Level 2 users can access the SMS. HR must ensure authorised users are trained, reliable, and understand the importance of accurate reporting.

 

3. Right to Work Checks & Ongoing Monitoring

 

HR remains responsible for carrying out compliant right to work checks before employment begins and throughout the worker’s sponsorship. This involves:

• Verifying identity documents or digital share codes
• Recording and storing check results securely
• Conducting follow-up checks before visa expiry

 

Ongoing monitoring of attendance, performance, and any changes in role or pay is also essential to ensure continued compliance.

 

4. Renewing and Maintaining a Sponsor Licence

 

A sponsor licence is valid for four years. HR must ensure renewal applications are submitted before expiry. Failure to renew will result in the licence lapsing automatically, which directly impacts all sponsored workers’ immigration status.

Maintaining the licence also means ensuring key personnel details remain accurate, HR systems are up to date, and any changes to the organisation’s structure, ownership, or premises are promptly reported to UKVI.

 

5. Impact on Recruitment & Workforce Planning

 

Sponsorship has a direct effect on workforce planning. HR must take into account:

• Visa processing times when planning recruitment schedules
• The financial impact of the Immigration Skills Charge (ISC) and visa fees
• The organisation’s reputation as a compliant sponsor, particularly in competitive sectors

 

A well-managed sponsor licence can strengthen recruitment strategies and enable access to global talent. Poor oversight, however, can jeopardise operations and create long-term risks.

Section D Summary
Managing sponsored workers requires HR to operate the SMS effectively, conduct lawful right to work checks, and ensure accurate reporting to UKVI. Renewals and workforce planning must be factored into long-term strategy. By embedding sponsorship processes into HR systems, employers can maintain compliance while benefitting from access to international talent.

 

 

FAQs

 

How long does a sponsor licence last?
A sponsor licence is valid for four years. Employers must apply to renew it before expiry if they wish to continue sponsoring workers. Failure to renew will result in the licence lapsing, affecting the immigration status of all sponsored employees.

Can a rejected application be appealed?
There is no formal right of appeal if a sponsor licence application is refused. However, employers may be able to reapply, provided they address the reasons for refusal. In certain cases, judicial review may be available if the decision was unlawful.

How long does the application process take?
UKVI typically processes sponsor licence applications within 8 weeks. Employers may pay an additional fee for the priority service, which can reduce processing time to around 10 working days, subject to limited availability.

What happens if a sponsor licence is suspended or revoked?
If a licence is suspended, the employer may not assign any new Certificates of Sponsorship until the issue is resolved. If revoked, all current sponsored employees will have their visas curtailed, usually within 60 calendar days or until visa expiry, whichever is sooner. The employer will also be prohibited from applying for a new licence for at least 12 months.

How can HR ensure ongoing compliance?
HR can ensure compliance by:

• Maintaining accurate and accessible records for all sponsored workers
• Monitoring visa expiry dates and job role conditions
• Training key personnel on sponsorship duties and SMS use
• Conducting regular internal audits of HR systems

 

By embedding compliance processes into HR operations, employers can minimise risk and remain in good standing with UKVI.

 

 

Conclusion

 

The sponsor licence system is a cornerstone of the UK’s immigration framework, enabling employers to lawfully recruit and retain overseas talent. For HR professionals, holding a sponsor licence is not simply a procedural requirement but an ongoing compliance responsibility that touches every stage of the employment lifecycle.

From the initial application process to the day-to-day management of sponsored workers, HR must ensure that the business meets strict legal duties in record-keeping, reporting, and monitoring. A well-managed sponsor licence allows organisations to compete effectively for skilled workers in a global market, while non-compliance can lead to significant legal, financial, and reputational consequences.

For employers, the key to success lies in robust HR systems, properly trained key personnel, and a proactive approach to compliance. By embedding sponsorship management into wider workforce planning, businesses can secure the benefits of global recruitment while maintaining full alignment with UK immigration law.

 

 

Glossary

 

Term	Definition
Sponsor Licence	Authorisation issued by UK Visas and Immigration (UKVI) allowing an organisation to sponsor non-UK nationals for work in the UK.
Certificate of Sponsorship (CoS)	An electronic record assigned by an employer to a sponsored worker, required for their visa application.
Sponsorship Management System (SMS)	The online platform used by sponsors to manage their licence and sponsored workers.
Authorising Officer	The senior person within the business responsible for the sponsor licence and overall compliance.
UK Visas and Immigration (UKVI)	The division of the Home Office responsible for the UK’s visa system and sponsor licence management.
Skilled Worker Visa	The main immigration route for skilled overseas workers to come to the UK for employment.
Compliance Audit	An inspection carried out by UKVI to check whether a sponsor is meeting its duties under the licence. This can result in licence downgrading, suspension, or revocation.

 

 

Useful Links

 

Resource	Link
GOV.UK – Sponsor licence guidance	https://www.gov.uk/uk-visa-sponsorship-employers
GOV.UK – Sponsorship Management System (SMS) login	https://www.points.homeoffice.gov.uk/gui-sms-jsf/SMS-001-LP.jsf
GOV.UK – Sponsor licence application fees	https://www.gov.uk/uk-visa-sponsorship-employers/fees
DavidsonMorris – Sponsor licence guide	https://www.davidsonmorris.com/sponsor-licence/
Xpats.io – Sponsor licence guide	https://www.xpats.io/sponsor-licence/