How will the sponsor licence renewal change create potential risk for employers?

From 6 April 2024, employers who sponsor overseas workers will no longer have to pay to renew their sponsor licence after four years. This change is a welcome cost saving for employers who sponsor overseas workers, but could inadvertently create greater immigration risk.

What is changing for employer sponsors?

Employer sponsors have previously had to submit an application to renew their licence, and pay a renewal fee of either £536 or £1,476, every four years in order to continue sponsoring migrant workers. Under the latest Home Office rules, an employer sponsor licence will be valid indefinitely.  

What will show on the sponsor management system (SMS)?

The Home Office has automatically extended all current licences that were previously due to expire on or after 6 April 2024 by 10 years, with no renewal fees to pay. Employers can ignore notifications to renew and, if a renewal is outstanding, should expect to receive a refund. 

What about sponsor compliance?

The four-yearly licence renewal process often served as a reminder to check sponsor compliance processes. In our experience, Key Personnel often leave organisations without a handover and visibility on the sponsor management system (SMS) can easily be lost. While the licence can extend indefinitely, prudent employers should build in their own schedule to check that reporting and record keeping are compliant, as licences can be downgraded and/or lost, with significant consequences for sponsored workers and businesses. (Find out what happened to Prestwick Care Ltd in this article on the consequences of right-to-work non-compliance.)

What should employers do?

Now that Home Office staff are not processing standard renewal applications, they are more likely to be deployed on employer enforcement tasks. Employers should be prepared for increased scrutiny on sponsor management compliance overall, with further desktop and in-person audits all being part of a strengthened right-to-work regime.

Stone King’s Immigration Team is able to provide sponsor licensing support through our Level 1 user service. We also provide audit services and training on all aspects of the sponsor management system and right-to-work processes. (Read more on this in our article on right-to-work fine increases.) Please get in touch for further details.