While Brexit has undoubtedly made it more challenging for UK employers to hire EU nationals, there have been some rule changes to the sponsorship scheme, such as lower skill and salary thresholds, that have been introduced to open up the sponsorship route to more occupations.  One example is that all Chefs are now included on the skills list, whereas historically, it was just Head Chefs.  With the wider scope sponsorship now offers, it might be worth some businesses considering this option that they had previously disregarded.

 What is a sponsor licence?

A sponsor licence grants permission to a UK employer to sponsor someone from outside the UK to work for them. This includes citizens of the EU, Iceland, Liechtenstein, Norway and Switzerland who arrived in the UK after 31 December 2020.  This includes unpaid work, like running a charity.

You will not need a licence to sponsor certain groups, for example:

  • Irish citizens
  • those with settled or pre-settled status under the EU Settlement Scheme.
  • those with indefinite leave to remain in the UK
  • there are a few other exceptions, but these are less common and should be investigated on an individual basis

N.B.: Sponsoring someone does not guarantee that they’ll be allowed to come to or stay in the UK.

Under the UK’s points-based immigration system, the main routes for non-UK residents working in the UK are:

  1. The skilled worker visa (which has replaced the Tier 2 visa)
  2. The intra-company transfer visa
  3. The tier 5 temporary worker visa

The majority of migrant workers are sponsored under the skilled worker route and so this is the one we will concentrate on.

How do I become a sponsor?

Employers must make an application to the Home Office to evidence their eligibility and prove they meet the requirements.  They must also pay an application fee.

The Home Office will only grant a sponsor licence to an organisation that can show the roles they are recruiting for, and the workers they intend to sponsor, meet the necessary requirements. The organisation must also have HR and recruitment systems in place that comply with the sponsorship compliance duties.

How long does a sponsor licence last?

A sponsorship licence lasts four years. The licence does not renew automatically, and the sponsor should apply to renew the licence before it expires.

How long does it take to get a sponsorship licence UK?

The majority of licence applications take around eight weeks to process, but organisations should note that time will need to be dedicated to preparing and compiling the submission, which can itself take a number of weeks. With premium processing, employers can receive a decision on their application within ten working days for an additional £500.

How much does it cost to apply for a sponsorship licence (2021 rates)?

Small businesses and charities pay a sponsor licence application fee of £536, while all other organisations pay £1,476. In addition to the application fee, the sponsor will also have to pay the Immigration Skills Charge (£1000 per year per sponsored worker for larger employers or a reduced rate of £364 for smaller companies & charities).  You’re usually a small sponsor if two of the following apply:

  • your annual turnover is £10.2 million or less,
  • your total assets are worth £5.1 million or less,
  • you have 50 employees or fewer.

 What documents do you need for sponsorship?

Sponsor licence applicants will need to refer to Appendix A of the Home Office’s sponsor licence guidance, which details the mandatory documents to be provided with the licence application. A minimum of four mandatory documents must be submitted to demonstrate that the organisation meets the eligibility requirements, i.e., it is genuine and operating lawfully in the UK.  These include things such as:

  • Latest audited annual accounts.
  • Employer’s liability insurance certificate.
  • Certificate of VAT registration.
  • Latest corporate bank account statement.
  • HMRC registration evidence, such as including PAYE number and accounts office reference number.
  • Evidence of ownership of, or a commercial lease for, business premises.

Appendix A: supporting documents for sponsor licence application (accessible version) – GOV.UK (www.gov.uk)

Additional supporting documents

As well as the four pieces of documentation, employers must also:

  • Explain why they are making an application for a sponsor licence.
  • Specify the industry they are operating in.
  • State their weekday opening and operating hours.
  • Submit a current hierarchy chart detailing all owners, directors and board members.
  • Submit a list of the names and job titles of all employees, if the organisation has 50 employees or fewer.
  • Specify the names of everyone who has access to the email address supplied with the online sponsor licence application.
  • Provide a contact telephone number.

 Which roles can be sponsored under the skilled worker visa?

Not all roles can be sponsored under the skilled worker licence.  Any proposed sponsored role must meet the criteria for sponsorship and attain the requisite 70 points under the visa route. This includes 50 mandatory points for skill, salary and language requirements.

To find out which roles are eligible under the skilled worker visa, you can search using the Skilled Worker visa: eligible occupations and codes – GOV.UK (www.gov.uk).

If you cannot find the role you require on the list, try looking for similar job titles or searching via the occupation code instead.  If you do not know the job’s occupation code, you can search for the role in the ONS occupation coding tool.  As well as the Standard Occupational Classification (SOC) code, this tool provides a brief job description and example job tasks to help employers match roles to the correct SOC code.

 What is the minimum salary we can pay?

One of the key sponsorship eligibility requirements under the Skilled Worker Visa route is that the role being recruited for pays at or above the relevant minimum salary threshold.

In most cases, the general salary threshold will be £25,600 per year, unless the ‘going rate’ for the particular role is higher.  In some cases, you can pay less than this (at least £23,040, or £20,480 per year) if the worker scores tradeable points such as having a relevant PhD or being a new entrant. More details of this are available on page 5.

The general salary threshold of £25,600 is calculated based on actual gross earnings, up to a maximum of 48 hours per week. No bonuses, tronc or other additions can be included. The minimum an individual must earn to qualify for sponsorship is £25,600 even if they work part-time.  If they are contracted to work more than 48 hours per week, the £25,600 must be pro-rated to reflect this.  Their hourly rate must always equal £10.10 per hour or more.

“Going rates” are annual basic salaries and based on a 39-hour working week.  No bonuses, tronc or other additions can be included. The salary must be pro-rated for other working patterns.  Where the individual’s pro-rata salary does not meet the pro-rata’d ‘going rate’, the application requirement will be deemed not to have been met.

For more information on going rates, please access Immigration Rules Appendix Skilled Occupations – Immigration Rules – Guidance – GOV.UK (www.gov.uk)

 Who should be responsible?

You need to appoint someone within your business to manage the sponsorship process when you apply for a licence.  The main tool they’ll use is the sponsorship management system (SMS).

The roles you will need are (they can be filled by the same person or different people):

  • authorising officer – a senior and competent person responsible for the actions of staff and representatives who use the SMS,
  • key contact – your main point of contact with UK Visas and Immigration (UKVI),
  • level 1 user – responsible for all day-to-day management of your licence using the SMS.

 What are your responsibilities as a licence holder?

If the licence is granted, the Home Office has powers to inspect sponsors at any time, and without notice. Where compliance breaches are identified, the Home Office can take enforcement action against the sponsor, by downgrading the licence, suspending or even revoking the licence.

In 2019, the Home Office suspended almost 600 sponsor licences and revoked more than 400.

By becoming a sponsor licence holder, you are agreeing that:

  • you are meeting all the compliance duties expected when sponsoring migrant workers by:
  • monitoring your employees’ immigration status,
  • record keeping for each employee, including passport and right to work information,
  • tracking and recording employees’ attendance, and
  • keeping employee contact details up to date;
  • you will report to UKVI if there is a problem, for example if your employee stops coming to work;
  • all sponsored workers meet the points requirements and are suitably qualified and skilled with the required language skills; and
  • the roles being sponsored meet the requirements for skill level, salary and genuineness.

Failure to meet the duties can result in enforcement action, from substantial fines to revocation of the licence, which would result in your visa workers losing their job and having to leave the country.

For more information on this topic please Contact Solution22 – HR Consultancy Services