Sponsor Licence Compliance: Avoiding Pitfalls and Penalties

Maintaining a sponsor licence requires ongoing compliance with Home Office requirements. This guide helps licence holders understand their obligations and avoid common mistakes that lead to penalties or licence revocation.

Core Compliance Duties

As a licensed sponsor, you have four main duties:

1. Duty to Report

You must report specific events to the Home Office within required timeframes, typically 10 working days.

Mandatory reporting events include:

Worker doesn’t start as expected
Worker is absent without permission for 10+ consecutive working days
Sponsored worker’s employment ends (any reason)
Significant changes to the worker’s job
Worker’s contact details change
Suspicion of immigration offence

2. Duty to Record-Keep

Maintain specific documents for each sponsored worker:

Required Records:

Copy of current passport and immigration status document
Contact details (address and phone number)
National Insurance number
Attendance and absence records
Evidence of salary payments
Original right to work documents

Retention Period:

Duration of sponsorship plus one year after
Some records may need longer retention for tax purposes

3. Duty to Prevent Illegal Working

You must conduct right to work checks for ALL employees:

Before employment starts:

Obtain original documents
Check validity and that person matches documents
Make and retain copies
Record date of check

Follow-up checks for sponsored workers:

Before current permission expires
When visa is extended

4. Duty to Cooperate with the Home Office

Respond to requests within required timeframes
Allow compliance visits
Provide information and documents as requested
Report suspected immigration offences

Common Compliance Failures

Record-Keeping Mistakes

Missing documents:

No copy of passport or BRP
Missing right to work check records
Incomplete attendance records

Outdated information:

Old address still on file
Contact details not updated
Records not reflecting job changes

Poor organisation:

Cannot locate records quickly
Records scattered across systems
Inconsistent filing

Reporting Failures

Late reporting:

Exceeding 10-day deadline
Batching reports instead of individual reporting
Forgetting to report seemingly minor changes

Failure to report:

Not reporting role changes
Missing absences
Not reporting departures

Assignment Errors

Invalid Certificates of Sponsorship:

Assigning CoS for non-genuine vacancies
Incorrect salary information
Wrong skill level or SOC code
Not meeting resident labour market test (where required)

Structural Issues

Key Personnel Problems:

Authorising Officer no longer with organisation
No replacement nominated when staff leave
Key personnel not understanding their responsibilities

Warning Signs That Trigger Investigation

The Home Office monitors for patterns that suggest compliance issues:

High-risk indicators:

High volume of CoS assignments relative to company size
Multiple workers not starting as expected
Frequent early departures from employment
Missing or late reports
Anonymous tip-offs

Automatic triggers:

Licence renewal (mandatory review)
Business changes (merger, acquisition, administration)
Intelligence from other agencies (HMRC, DWP)
Connection to another non-compliant sponsor

The Compliance Visit

What to Expect

A Home Office compliance officer may visit with little or no notice:

They will typically:

Request access to premises
Ask to see sponsored worker records
Interview key personnel
Verify workers are employed as stated
Check HR systems and processes

How to Prepare

Ensure records are organised and accessible
Brief relevant staff on compliance obligations
Have documentation of your processes ready
Know where all sponsored workers are located
Be prepared to demonstrate your systems

During the Visit

Do:

Be cooperative and professional
Answer questions honestly
Provide documents as requested
Take notes of what’s discussed

Don’t:

Be defensive or obstructive
Provide misleading information
Promise documents you can’t provide
Guess answers – say you’ll check

Consequences of Non-Compliance

Licence Downgrade

B-rating (from A-rating) for compliance failures:

Action plan provided with specific timeframes
Must address issues to restore A-rating
Can still assign CoS but may face restrictions

Licence Suspension

Immediate suspension for serious concerns:

Cannot assign new CoS
Existing sponsored workers unaffected during investigation
Usually followed by reinstatement or revocation

Licence Revocation

For serious or persistent failures:

All sponsored workers’ visas curtailed
Workers given 60 days to find new sponsor or leave UK
Cannot reapply for 12 months (minimum)
Potential civil penalties for illegal working

Civil Penalties

For employing illegal workers:

Up to £45,000 per illegal worker
Applies even if you hold a sponsor licence
Right to work checks provide statutory excuse

Action Plan: Building Compliance Culture

Immediate Steps

Audit current records - Check all sponsored worker files are complete
Review reporting history - Identify any missed or late reports
Update key personnel - Ensure SMS access and responsibilities are current
Document your processes - Create clear compliance procedures

Ongoing Practices

Regular file reviews - Monthly check of sponsored worker records
Prompt reporting - Report events as they occur, not in batches
Training - Ensure all relevant staff understand obligations
Stay informed - Immigration rules change frequently

Systems and Tools

Consider implementing:

Dedicated sponsorship management software
Calendar alerts for reporting deadlines
Checklists for new sponsored worker onboarding
Document management system for records

Getting Help

When to Seek Professional Advice

Before applying for a licence
When facing a compliance visit
After receiving a warning or downgrade
When unsure about complex situations
For licence renewal preparation

Immigration Advisers

Use only regulated advisers:

Solicitors
OISC-registered advisers
Barristers

Check registration at: OISC website or Law Society.

Compliance Checklist

Weekly:

[ ] Check for any reporting events
[ ] Review new starter documentation
[ ] Update attendance records

Monthly:

[ ] Audit a sample of sponsored worker files
[ ] Review any changes to key personnel
[ ] Check for visa expiry dates approaching

Quarterly:

[ ] Full compliance audit
[ ] Policy and procedure review
[ ] Staff training refresh

Annually:

[ ] Comprehensive record review
[ ] Licence renewal preparation (if applicable)
[ ] Immigration rule changes briefing

Conclusion

Compliance isn’t optional – it’s the price of access to global talent. By building robust systems and maintaining vigilance, you protect both your organisation and your sponsored workers.

Check your organisation’s listing: See how your company appears on our Sponsor Directory to potential candidates.