Sponsor Licence Management & Compliance

Holding a sponsor licence is an ongoing responsibility, not a one-off approval. The general requirement to renew a sponsor licence every 4 years was removed on 6 April 2024. Since then, most licences remain valid indefinitely unless the sponsor surrenders the licence or the Home Office revokes it. The exceptions are UK Expansion Worker and Scale-up licences, which are time-limited to a maximum of 4 years.

Because there is no longer a renewal point, the real test of a licence is day-to-day compliance. Sponsors who fall behind on reporting, record keeping or key personnel updates can face downgrading, suspension or revocation, which can affect every worker they sponsor.

Your core sponsor duties

• Only assign Certificates of Sponsorship for genuine roles that meet the requirements of the route.
• Check every sponsored worker's right to work and keep the required records.
• Monitor sponsored workers and report relevant changes on time.
• Keep your key personnel and organisation details up to date on the Sponsor Management System (SMS).
• Co-operate fully with Home Office compliance checks.

Reporting duties

Changes to a sponsored worker's circumstances must generally be reported on the SMS within 10 working days. Changes to the organisation must generally be reported within 20 working days. Reportable events include:

• A worker not starting within 28 days, or sponsorship ending for any reason.
• Unauthorised absence of more than 10 consecutive working days.
• Unpaid or reduced-pay absence of more than 4 weeks in a calendar year.
• Pay reduced below the level on the Certificate of Sponsorship.
• Significant changes to the role or to the work location, including a move to fully remote working.

A suspected breach of a worker's conditions must be reported as soon as reasonably practicable.

Key personnel and SMS access

You must have an eligible Authorising Officer and at least one Level 1 User throughout the life of the licence, or the licence will be revoked. From 9 September 2026, no new Level 2 Users can be appointed, and existing Level 2 Users must be converted to Level 1 Users (where eligible) or deactivated by 8 March 2027. Mandatory two-factor login for SMS users is being rolled out in phases from September 2026.

The Home Office has said it intends to remove inactive SMS user accounts, and a sponsor may lose its licence if it does not check and update its users' details. Keeping your user list accurate is now an important protective step.

Certificates of Sponsorship

• Defined certificates are used for Skilled Workers applying from outside the UK. They are requested case by case, usually decided within 1 working day, and must be assigned within 90 days.
• Undefined certificates are used for in-country Skilled Worker applications and other routes, from an annual allocation. Requests for more can take up to 12 weeks, although a paid faster option is available.

Assigning the wrong type of certificate is normally grounds for revocation. An SMS user must never assign a certificate to themselves, their partner or a close relative.

Record keeping

Appendix D of the sponsor guidance lists the documents you must keep for each sponsored worker. They must generally be kept throughout the sponsorship and until one year after it ends (or until a compliance officer has examined and approved them, if earlier). Right to work records must be kept for the duration of employment plus 2 years. A right to work check is required for every sponsored worker.

Organisational changes

Changes of ownership, mergers, acquisitions, transfers of staff (for example under TUPE) and changes of address or structure can all affect a licence. Many must be reported within 20 working days, and some have wider consequences for sponsored workers. We recommend taking advice before the change takes effect.

Costs you cannot pass on

The Immigration Skills Charge is currently £480 (small or charitable sponsors) or £1,320 (medium or large sponsors) for the first 12 months of sponsorship, for certificates assigned on or after 16 December 2025. The licence fee, Certificate of Sponsorship fee and Skills Charge must not be recovered from the worker. Doing so will normally lead to revocation.

Compliance checks and enforcement

The Home Office can carry out announced or unannounced compliance checks, on site or digitally, and runs regular pay checks using HMRC data. Where breaches are found:

• A licence may be downgraded to a B-rating, with an action plan (currently £1,579) lasting 3 months.
• A licence may be suspended while concerns are investigated.
• A licence may be revoked, with no right of appeal.

See compliance visits and suspension and revocation.

How Stonebridge can help

• Compliance health checks and mock audits of HR files and processes.
• Reviewing SMS users, key personnel and Level 2 transition plans.
• Advising on reporting obligations and preparing SMS reports.
• Advice on certificate allocation and assigning certificates correctly.
• Support with organisational changes and staff training.

If you would like a review of how your licence is being managed, book a consultation.