With the new Labour government making a number of changes to Work visa requirements, there are a lot of questions over UK sponsor licence fees. In this article, the current UK sponsor licence fees are outlined, in addition to the changing landscape regarding UK licenced sponsors.
What is the UK Sponsor Licence?
In order to sponsor overseas employees, your business will need to be registered with the UK Home Office as a licenced sponsor. This means that you will need to obtain a sponsor licence.
Being a licenced sponsor allows you to provide overseas hires with a certificate of sponsorship, which will allow them to apply for a UK Work visa.
There are a number of eligibility criteria which businesses need to satisfy in order to obtain a sponsor licence. This includes:
- Having no unspent convictions for certain crimes, including crimes involving immigration and fraud
- Having no history of failing to adhere to the sponsorship guidelines
There are two main types of sponsor licences: Worker Sponsor licences and Temporary Worker Sponsor licences. If you are looking to hire employees under the Skilled Worker visa route or the Senior or Specialist visa route, you will need to obtain a Worker Sponsor licence. If you are looking to hire seasonal or temporary workers, you can instead take the Temporary Worker Sponsor route.
The exact cost of UK sponsor licence fees will depend on the type of business which you have and sometimes on the type of employee you intend to hire. If you have a small company, the fee will be £536, regardless of the type of employees whom you are hiring. In the case of a medium or large business, the cost is generally £1,476, unless you are applying for a temporary worker licence, in which case the cost is £536.
To count as a small business, you will need to satisfy at least 2 of the following criteria:
- Your business has an annual turnover of up to £10.2 million
- Your assets are worth up to £5.1 million
- Your business employs up to 50 employees
If you do not satisfy at least 2 of these criteria, you can expect to be classified as a medium or large business by the UK Home Office.
What are the significant changes in UK sponsor licence fees for 2024 and 2025?
Many of the changes which have been introduced in 2024 do not directly relate to UK sponsor licence fees but can still be expected to have an effect on the cost of the UK’s Work visa application process. For example, there has been a 65% increase in the Immigration Health surcharge fee, a cost which Work visa applicants must pay in order to access the UK’s national health service (NHS). There has also been a 47% increase in the minimum salary threshold.
Regarding sponsor licences, there have been some changes which may actually reduce long-term fees. Before April 2024, UK sponsor licences were only valid for 4 years, and would need to be renewed upon expiry. Since April 2024, existing valid sponsor licences have now been extended by 10 years. Additionally, licences which are granted from April 2024 onwards will also be valid for a 10-year period.
However, these changes have coincided with an increase in sponsor licence cancellations, with 1023 cancellations in the second quarter of 2024, a significant rise from the 519 cancellations in the first quarter. This demonstrates a renewed focus from the UK Home Office on enforcement of the sponsor licence rules and regulations and emphasises the importance of remaining compliant with the rules.
Additionally, there have been increased penalties for sponsor licence violations. Fines have now increased from £15,000 to £45,000 in the case of first time offenders and from £20,000 to £60,000 in the case of repeat offenders. In particular, there is a lot of scrutiny on the care sector, such as adult nursing homes.
How will increased sponsor licence fees affect UK businesses in 2024?
In general, a number of changes have been introduced to UK Work visa requirements, including the cost of the health surcharge payment and the fines associated with breaches to overseas employment rules. As such, UK businesses hiring overseas workers must navigate a changing environment and must remain vigilant against breaching the sponsor licence regulations.
Now that sponsor licence durations have been extended, it is especially important to ensure that your employees continue to satisfy the visa eligibility criteria for the duration of their employment with you, to ensure you are able to avoid having to pay these fines or jeopardising your sponsor licence. Additionally, in light of the increased number of cancellations and fines, businesses who are licensed sponsors must take care to be especially vigilant and ensure that their employees continue to satisfy all the eligibility criteria for overseas employment in the UK.
Key Points to Remember
Going forward, UK businesses who have licenced sponsor status must ensure that they routinely check that their employees continue to satisfy the terms of their visas. As the UK Home Office remains focused on ensuring compliance with sponsor licence regulations, businesses must take especial care to ensure that they are not in breach of the rules. Failure to do so could result in substantial fines and licence cancellation.
Hiring overseas employees gives businesses access to a diverse and dynamic talent pool. In order to maintain access to overseas talent, businesses must make sure to adhere to immigration regulations and to keep track of UK business immigration costs.
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