UK Sponsor Licence Compliance Update
We would like to highlight that as Sponsor Licence holders it is imperative to ensure that your compliance frameworks are robust and proactively managed.
The Home Office have been conducting Compliance Audits more frequently in the last 2 years and the number of Sponsor Licence suspensions and revocations have seen its biggest incline yet. We have summarised the Home Office data for your ease of reference.
In light of this, we would like to take the opportunity to remind sponsors of certain key compliance responsibilities and their importance. This update is designed to support employers and HR professionals who manage sponsored workers in the UK.
Please see below a summary of the main considerations and reminders:
1. Key Personnel and Level 1 User
With the new Multi-Factor Authentication (MFA) being implemented on the Sponsorship Management System (SMS), employers need to ensure that the Authorising Officer, Key Contact and Level 1 user details are up to date so that they can continue accessing their SMS account.
- The Home Office requires that at least one Level 1 User must be an employee, partner or director within the organisation and they are a ‘settled worker’ (British/Irish/settled status/EU pre-settled status).
- While external legal representatives may still act as Level 1 Users, sponsors cannot rely on them exclusively.
- The Authorising Officer must remain a senior and competent employee and is also expected to hold Level 1 User access to the Sponsor Management System (SMS).
- Sponsors must also always have an active Authorising Officer, Key Contact and Level 1 User recorded on the SMS. If any of these individuals leave the organisation or change role, their details must be updated promptly.
Practical impact for sponsors:
- Employers should regularly review their current list of SMS users and Key Personnel to confirm accuracy and to ensure records reflect current staff responsibilities.
- Having outdated or inactive Key Personnel details is a common reason for non-compliance findings during audits.
2. Companies House Registration Number
- Sponsors are now required to record their Companies House Registration Number in the SMS, following recent system updates.
Practical impact for sponsors:
- Employers should log into the SMS and confirm that their Companies House Registration Number is entered correctly.
- Missing or incorrect information should be updated without delay.
- Discrepancies between Companies House filings and SMS records may trigger compliance queries during Home Office audits.
3. Organisation Details – Address & Structural Changes
- Any change to the organisation’s main office address, additional office locations, or work sites must be updated promptly in the SMS.
- Mergers, acquisitions, takeovers, or other corporate restructures must be reported to the Home Office.
- Organisational changes that affect the legal entity of the sponsor may also require a new licence application.
Except where you are replacing your Authorising Officer or Key Contact, you must report the change by no later than 20 working days after the date you became aware of the change.
Practical impact for sponsors:
- Employers should maintain accurate and up-to-date organisational details in the SMS at all times.
- Failure to notify changes can result in licence suspension or revocation.
4. Employee Changes – Reporting within 10 Working Days
- Sponsors must report certain changes to sponsored employees via the SMS within 10 working days.
- Examples include (list is non-exhaustive):
- Ending sponsorship (e.g. resignation or termination of employment, change in immigration status such as Indefinite Leave to Remain)
- Leaving the UK permanently
- Employee not starting work within 28 days of Certificate of Sponsorship (CoS) start date
- Change of work location or office address
- Change in job title or duties (within the same SOC code), this could be due to a promotion
- Salary changes (salary reductions and promotions)
- Delayed or revised start dates
- Unpaid absences of more than 4 weeks (excluding permitted exceptions)
Practical impact for sponsors:
- HR teams should ensure there are clear processes for tracking and reporting all employee changes promptly. Failure to report these updates on time is a common reason for compliance breaches and can lead to licence downgrades, suspension or revocation.
5. Licence Renewal & Validity Dates
- Since April 2024, most sponsor licences are valid for 10 years instead of 4.
- Sponsors remain responsible for monitoring their licence expiry date and submitting renewal applications on time.
- If a licence lapses, all sponsored workers lose their right to work, and their visas may be curtailed.
Practical impact for sponsors:
- Employers should keep accurate records of licence validity dates.
- Renewal applications should be prepared and submitted well in advance of expiry. We recommend setting reminders at least 6 months before expiry.
6. How can K2 X Border Help?
We can both provide practical support with completing updates but also provide more strategic support to help you remain compliant and audit-ready, including the below.
- Right to Work training: Ensuring HR teams understand the latest requirements
- Sponsor compliance training: Tailored guidance for your Authorising Officer and Level 1 Users
- Mock audits: Identifying gaps before the Home Office does
- Policy and process reviews: Strengthening internal compliance frameworks
We are here to support you in navigating sponsor licence obligations and reducing the risk of issues during Home Office inspections.
This update is intended as a general guide and does not replace tailored legal advice. If you have questions on any of the topics above, please do not hesitate to contact us.
