Tightening of Home Office Sponsor Guidance

The start of the New Year had seen the Home Office introduce significant changes to their Sponsor Guidance. These significant changes impact both new and existing Sponsor Licence holders. 

Various Home Office sponsor guidance for work routes had been updated on both 31 December 2024 and 01 January 2025 to essentially deliver on the Home Office’s commitment to minimise “abuse of the visa and immigration system by unscrupulous employers”. Owing to the same commitment, further changes can be expected throughout the year.

The three most noteworthy changes are the following.

Complete ban on businesses passing on certain sponsorship costs to migrant workers

As it stood, previously, there was an express prohibition applicable for Sponsor Licence holders not allowing them to recoup the Immigration Skills Charge (ISC) from sponsored migrant workers. However, the Sponsor Guidance has now been updated to also expressly prohibit the following:

• The fee associated with applying for a Sponsor Licence along with any associated administrative costs for any applications, for matters submitted from 31 December 2024 onwards.
• The Certificate of Sponsorship (CoS) assignment fee for CoS’s assigned on or after 31 December 2024.

The consequences of non-compliance regarding the above could potentially be severe, as it may result in the Sponsor Licence being revoked. Therefore, it is advised for Sponsor Licence holders to review their employment contracts to ensure that no such claw-back terms are included and to not request such costs upfront from candidates.

New requirements for Level 1 Users

Previously, the Home Office Sponsor Guidance had required a minimum of one Level 1 user to be a settled worker, as well as one Level 1 user to be an employee, a partner or a director of an organisation. These roles could be filled by two separate Level 1 users.

However, from 31 December 2024, it is now a requirement for at least one Level 1 user to be both an employee, Partner or Direction as well as a settled worker. Failure to meet this requirement can also result on the revocation of a Sponsor Licence.

Transitional arrangements are in place for existing sponsor licence holders but given that the above new rule may apply to existing licence holders too in the future, it is recommended that licence holders should start considering appointing a Level 1 User who meet both requirements.

Prohibition on sponsoring migrant workers in a personal capacity

The updated Guidance confirms that a Sponsor Licence and the sponsoring of Skilled Workers are strictly for legitimate business purposes and cannot be used to facilitate employment in a personal capacity. Personal capacity includes:

• Being sponsored by an individual or household who are not conducting business or providing services in the UK; or
• Being sponsored for the personal benefit of either an individual who works for the organisation or a close relative or partner of that individual, and the role is not related to the organisation’s wider activities.

What does this mean for your business?

It is important that as a sponsor licence holder, you remain compliant with the ever-changing Immigration Rules and requirements. We would recommend that you at the least:

1. Check your internal policy regarding the payment/clawback of all immigration related fees
2. Check your SMS portal and review whether those who have Level 1 access meet the new requirements
3. Review whether any sponsored employee is employed in a ’personal capacity’

How can JMW help

If you are a UK employer who requires assistance in adhering to the Sponsor Guidance or would like further information on how these new requirements impact your business, please do contact us. We have a dedicated team of Immigration Solicitors who specialise in Sponsor Licence applications and compliance.