Obtaining a Sponsor Licence from the Home Office: what do business owners need to know?

read time: 6 mins

Many UK businesses simply cannot source the staff that they need from the UK labour market, particularly following the end of free movement from the EU, and therefore need to cast their net wider to fill vacancies. A Skilled Worker visa allows foreign nationals to come to or stay in the UK to do an eligible job with an approved employer. This visa has replaced the Tier 2 (General) work visa.

Skilled Worker visas can be a really useful way for a scaling business to bridge the skills-gap and bring onboard the specialist expertise which may be needed to support growth, particularly in deep tech, life sciences and other highly specialised sectors.

For another route enabling scaling businesses to attract overseas talent please see our separate Q&A on the Scale-Up Visa.

If your business wants to employ an individual on the Skilled Worker immigration route, it will first need to obtain a Sponsor Licence from the Home Office.

What exactly is a Sponsor Licence?

A Sponsor Licence grants permission to a UK employer to sponsor non-settled skilled workers.

The Licence process is used to ensure that:

  • The sponsoring business meets all of the compliance duties expected when sponsoring migrant workers;
  • Sponsored workers are suitably qualified and skilled, and have the required English language skills; and
  • The roles being sponsored meet the requirements for skill level, salary and genuineness.

How do we apply for a Sponsor Licence?

An application for a Sponsor Licence is made online. The application involves answering questions about your business and why you want to, or might want to, employ skilled workers from overseas.

Your business will be required to submit a number of supporting documents as part of the application process. The types of supporting documents required will depend on your business.

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 business must also demonstrate that it has systems in place that comply with onerous sponsorship compliance duties.

How long does it take for a Sponsor Licence to be granted?

Once the Sponsor Licence application has been submitted (together with the supporting documents), the application will usually be processed within 8-10 weeks.

There is a priority service available to expedite this process, however businesses are not guaranteed to be able to access the priority service, as it is allocated on a “first come first served” basis and only 30 requests per day are granted. The priority service costs £500 in addition to the Sponsor Licence application fee (see below).  

Once the Sponsor Licence is granted, how do we sponsor a skilled migrant worker?

The individual you wish to recruit will need to apply for a Skilled Worker visa. If they are already in the UK working for another sponsor on a Skilled Worker visa, they will need to make a change of employment visa application.

As part of the individual’s visa application, your business will need to generate a “Certificate of Sponsorship”, indicating to the Home Office the role in which you intend to employ them, including their duties and salary details.  A Certificate of Sponsorship is not a paper certificate or document, but a virtual document, similar to a database record. The individual will use the unique reference number on the Certificate to support their Skilled Worker visa application.

Can we sponsor skilled workers in any roles?

In short, no. The Home Office has a list of occupation codes which specify the roles into which you can sponsor migrant workers. Whilst there is a large variety of the types of roles into which you can recruit skilled workers, it is important to identify the correct code and to ensure the Certificate of Sponsorship reflects that code.

Generally speaking:

  • the role must require skills to at least the level of A-Levels or equivalent qualifications/experience; and
  • the minimum salary requirement must be met (which differs according to the role but, other than in exceptional circumstances, must not be less than £38,700 per annum).

The Government recognise that there are certain roles that desperately need to be filled in the UK. As such, roles on the “Immigration Salary List” are afforded more relaxed eligibility criteria for sponsored work visa applications.

Before sponsoring a migrant worker, do we first have to demonstrate that the role cannot be filled by a “settled” or British worker?

No – this is no longer a requirement.

The “Resident Labour Market Test”, which was an onerous process requiring businesses to advertise vacancies in a prescribed manner for at least 28 days, and demonstrate that a “settled” worker could not fill the role before offering it to a non-EU national, was abolished in 2021.

Now, you should consider all candidates equally regardless of their immigration status.

What are the costs involved?

The Home Office fees for applying for a Sponsor Licence are £536 for small employers and £1,476 for medium or large employers. The Licence is granted for four years and the Licence fee is payable each time the Licence is renewed.

A business will usually qualify as a small employer if it is a charity or it meets two of the following criteria in its financial year:

  • A turnover of not more than £10.2 million;
  • A balance sheet total of not more than £5.1 million;
  • It employs no more than 50 employees.

There are also fees that are payable each time the business sponsors a migrant worker. The Home Office fees for a five-year, Skilled Worker visa, in relation to a job not on the Immigration Salary List, sponsored by a medium or large employer (as opposed to a small employer) currently come to the best part of £11,000, broken down as follows:

  • Certificate of sponsorship fee - £239 (payable by the sponsor)
  • Immigration Skills Charge (£1,000 per year) - £5,000 (payable by the sponsor)
  • Visa application fee (applying from outside the UK and not on the Immigration Salary List) - £1,420 (payable by the worker)
  • Immigration Health Surcharge (£1,035 per year) - £5,175 (payable by the worker)

If the business is registered as a small employer, the Immigration Skills Charge is £364 per year instead of £1,000 per year.

Our team of specialist Immigration and Employment solicitors are ready to help guide you through the process of engaging overseas talent. We work closely with organisations to understand their requirements and advise on the best route to bringing individuals into the UK.

For more information on this article, please contact Kirsty Cooke, Laura Wonnacott or Ellen Parker.

Scaling businesses can also find more information on our Business Scale-up Hub.

Sign up for legal insights

We produce a range of insights and publications to help keep our clients up-to-date with legal and sector developments.  

Sign up