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23rd September 2020

Becoming a licensed sponsor - is your business ready for 1 January 2021?

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Having left the EU on 31 January 2020, the UK is now in a transition period during which EU workers can continue to live and work in the UK.

Despite calls for the Government to extend the transition period to allow businesses more time to prepare given the difficulties that have been experienced during the Covid-19 pandemic, the Government has stated that there will not be any extension and that the transition period will end on 31 December 2020.

This means that from 1 January 2021 all overseas workers, whether from within or outside the EU, who wish to come to the UK to live and work will be subject to the points-based system. This system will enable skilled workers who have an offer of employment from a licensed sponsor to live and work in the UK subject to certain eligibility requirements. Further details as to how the points-based system will work post December 2020 can be found here.

The key requirement under the points-based system is that an employer must be a registered licensed sponsor if it wishes to employ workers from outside the UK. Therefore, if you believe that your business may wish to recruit workers from the EU or indeed further afield from 1 January 2021, and you are not already a licensed sponsor, you should be considering making an application to the UK Visas and Immigration (UKVI) to become one.

Becoming a licensed sponsor does, however, carry several onerous responsibilities and so it is important to consider whether your business is willing and able to comply with such obligations before you apply.

Who can apply for a sponsor licence?

To become a licensed sponsor there are certain eligibility requirements that a business must meet:

  • You must be a genuine business operating legally in the UK.

  • You must have a genuine role to offer to a migrant worker which meets the skills requirements of at least RQF Level 3 and the accompanying salary requirements.

  • The UKVI must be satisfied that your business in not a threat to immigration control. They will consider, for example, any previous convictions, any previous involvement with UKVI and whether you have appropriate HR systems in place.

  • You must be able to appoint key personnel roles to manage your sponsor licence. These individuals must be UK employees, meet certain eligibility requirements and such roles have duties and obligations with which such personnel are obliged to comply.

  • The UKVI must be satisfied that you will meet your immigration compliance responsibilities as a sponsor. Again, UKVI will consider what HR processes you have in place and may undertake a compliance visit before your application is approved.

Compliance considerations

Sponsor licence holders are said to be put in a “position of trust” when it comes to business immigration and as such are required to uphold UK immigration law. Over the years more and more responsibility has been placed upon employers that hold sponsor licences to ensure that illegal working does not take place.

As a result, the UKVI requires licence holders to comply with various reporting and record keeping obligations and may undertake a compliance audit, either before your application has been granted or once your sponsor licence has been issued.

Before applying for a sponsor licence it is therefore key that you ensure your current processes and records are up to date, especially in the area of preventing illegal working. You should:

  • Consider in detail why your business wishes to hold a sponsor licence. What vacancies would you intend to recruit migrant workers into? Would those vacancies meet the eligibility requirements?

  • Consider whether you have suitable HR processes in place to comply with the record keeping and reporting duties. For example, are the contracts of employment and other employment documentation for staff up to date and easy to locate? Do you have the record keeping systems in place to enable you to keep track of key dates, staff absences and changes in employee circumstances?

  • Ensure that your right to work checks are being undertaken in line with the UKVI guidance, that the appropriate records are kept and that such records are up to date and easy to locate.

  • Consider which staff would be appropriate to appoint to the key personnel roles, whether they would meet the eligibility requirements and be able to manage the obligations placed on them within such roles.

Failure to comply with your sponsor duties can lead not only to the suspension or revocation of your sponsor licence, but also potential civil penalties and criminal convictions in respect of illegal working. It is therefore important that you carefully consider what is involved in becoming a licensed sponsor before making any application.


If you do decide to apply to become a licensed sponsor, it is also necessary to consider timescales. It usually takes around 8 weeks for a sponsor licence application to be approved. However, the UKVI are likely to receive an influx of applications in the lead up to 1 January 2021. This could lead to delays in applications being granted, leaving some employers unable to recruit workers from outside the UK for some time. If your business may need to continuing recruiting workers from outside the UK from January 2021, our advice would therefore be to start looking into the sponsor licence application process as soon as possible.

For further advice or assistance with making sponsor licence applications please click here to email Gemma Hill or click here to email Lynne Adams in our Employment team.