Reporting and Compliance Requirements for Sponsor License Holders in the UK

If you're holding or planning to apply for a sponsor licence in the UK, understanding your reporting and compliance duties is essential. Failing to meet these obligations could result in penalties, licence downgrades, or even licence revocation, potentially disrupting your business operations.

The UK’s immigration rules are constantly evolving, and it’s crucial to stay up-to-date with the latest requirements. The ‘Workers and Temporary Workers: Guidance for Sponsors’, effective from December 31, 2024, outlines the reporting and compliance responsibilities for sponsor licence holders. In this post, we break down those requirements, focusing on the key aspects of reporting changes, maintaining proper documentation, and the wider compliance obligations that come with being a sponsor.

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Key Reporting Obligations

When you become a sponsor license holder, you’ll need to report any significant changes in your organisation or your sponsored workers’ circumstances. This helps ensure that everything remains in line with UK immigration laws. The Home Office relies on the Sponsorship Management System (SMS) for sponsors to report these changes.

1. Worker-Specific Changes

As a sponsor, you must report specific changes related to your sponsored workers. Here are some common scenarios when you'll need to report changes:

• Absences: If one of your sponsored workers is absent for more than 10 consecutive working days without prior approval, you need to report this. You’ll also have to specify whether there are any salary deductions due to the absence.
• Changes in Work Location: If your sponsored worker changes their place of work significantly (e.g., moving offices or working remotely), you must inform the Home Office. Routine arrangements like hybrid working are usually not reportable unless the worker starts working remotely full-time.
• Stopping Sponsorship: If the worker leaves your company or you stop sponsoring them for any reason (like they’re not attending work or their contract ends), you need to notify the Home Office within 10 working days.
• Offshore Workers: If you sponsor offshore workers, you must report when they enter or exit UK waters within 10 working days.

2. Organisational Changes

It's not just about your workers. Sponsors must also report significant changes within their own business. This includes changes like:

• Key personnel changes
• Structural changes, such as mergers or acquisitions

These must be reported within 20 working days to avoid any issues with your licence.

3. Specific Route Duties

Some visa routes come with extra reporting requirements. For instance, if you're sponsoring Scale-up Workers, Creative Workers, or UK Expansion Workers, be sure to familiarise yourself with the specific obligations for each worker type.

Would you like to discuss further regarding your individual case? Book a free assessment call with us today to discuss how we can help you streamline your compliance processes and secure your sponsor licence, or read more to explore additional insights and strategies for success.

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Record-Keeping and Documentation

There are also multiple record-keeping responsibilities that sponsors must follow. However, as the focus of this article is on reporting duties, we will cover record-keeping responsibilities in a separate article.

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Compliance with UK Laws

It’s not just about immigration law. Sponsors are responsible for complying with broader UK employment regulations, too.

1. Immigration Law Compliance

This is the big one. You must ensure that every sponsored worker has the right to work in the UK. Additionally, the role must meet the necessary salary and skill thresholds for the relevant visa type.

2. Employment Law Compliance

You must also comply with UK employment laws, such as those related to health and safety, anti-discrimination, and workers' rights. Failing to meet these obligations could result in serious consequences, including fines or legal action.

3. Public Good

Sponsors must operate ethically. This means adhering to the law and maintaining high standards of conduct. If your business engages in illegal activity, discrimination, or other unethical behaviour, your sponsor licence could be revoked.

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Consequences of Non-Compliance

The Home Office takes compliance seriously. If you fail to meet your reporting or record-keeping obligations, the consequences can be severe:

• Licence Downgrades: If minor breaches occur, your licence could be downgraded from an A-rating to a B-rating. A B-rating means you can’t issue new Certificates of Sponsorship (CoS) until you address the issues.
• Suspension or Revocation: Serious non-compliance could lead to your sponsor licence being suspended or revoked. If your licence is revoked, you’ll no longer be able to sponsor workers, and all current sponsored workers must leave the UK.
• Financial Penalties and Criminal Action: If you employ workers without the correct immigration status, you could face financial penalties or criminal charges, especially if there is evidence of deliberate deception or non-compliance.

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Maintaining Compliance: Best Practices for Sponsors

To avoid penalties and protect your licence, it’s important to implement best practices for compliance. Here are some tips:

1. Regularly Review Worker Status: Check that your sponsored workers’ immigration status is up to date and that their roles still meet the necessary criteria for their visa type.
2. Timely Reporting: Report any changes—whether it’s an absence, a location change, or a worker leaving the organisation—promptly through the SMS.
3. Training and Awareness: Ensure that staff managing sponsorship duties are regularly trained on the latest compliance requirements and immigration laws.
4. Document Management: Maintain detailed records for all sponsored workers, including employment contracts and visa details. Keep these documents easily accessible for audits or compliance checks.
5. Monitor Organisational Changes: Any significant changes to your business structure should be reported within the required time frame. This includes personnel changes, mergers, and acquisitions.

Want to learn more about your individual case? Book a free assessment call with us today to discuss how we can help you streamline your compliance processes and secure your sponsor licence, or read more to explore additional insights and strategies for success.

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Real World Example: The Consequences of Non-Compliance

A real-world case highlights the importance of compliance. Emigral’s co-founder, Alexandra Mokrova, worked on a case involving a company that failed to report it had ceased trading. The organisation did not inform the Home Office or surrender its sponsor licence, as required. As a result, the company was hit with a mandatory 12-month "cooling-off" period before it could apply for a new licence.

This example shows how non-compliance can have long-term consequences. The organisation now faces significant challenges and scrutiny in reapplying for a sponsor licence. They must disclose all relevant information to the Home Office and submit a new application from scratch. This case underlines why it’s crucial to stay compliant with your reporting obligations, as failing to do so can complicate future attempts to regain sponsorship privileges.

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Conclusion
Holding a sponsor licence is both a significant responsibility and a strategic opportunity for your business. Ensuring that your workers are eligible to work in the UK, promptly reporting any changes, and adhering to rigorous compliance standards are essential to maintaining a robust relationship with the Home Office. Failure to meet these obligations can result in penalties, downgrades, or even the revocation of your licence.

By implementing best practices, staying informed about regulatory updates, and taking swift action on reporting changes, you can safeguard your business and continue to sponsor skilled workers confidently. This proactive approach not only protects you from costly fines but also positions your business for sustained growth.

Ready to take the next step? Book a free assessment call with us today to discuss how we can help you streamline your compliance processes and secure your sponsor licence, or read more to explore additional insights and strategies for success.