The requirement to renew a Sponsor Licence every four years was abolished on 6 April 2024. Prior to this, Sponsor Licences were only valid for four years, and licence holders had to submit a paid renewal application if they wished to keep their licence active beyond that period.
However, as of 6 April 2024, the Home Office has significantly simplified the process. Sponsor Licence holders are no longer required to apply for renewal every four years or pay a renewal fee. Instead, all existing sponsor licences that were due to expire on or after this date have been automatically extended by 10 years. This change applies to both new and existing licences, and the extension is automatic, meaning no action is needed from employers.
What is a Sponsor Licence?
A Sponsor Licence allows businesses to hire non-UK workers legally under various visa routes, such as the Skilled Worker Visa and Health and Care Worker Visa. This licence gives employers the ability to sponsor foreign employees in specific roles, provided they meet certain criteria set by the Home Office.
Before April 2024, sponsor licences were valid for four years. To continue hiring foreign workers beyond that, employers needed to submit a paid Sponsor Licence Renewal Application to the Home Office. However, this process has recently changed, making things much easier for businesses.
End to Sponsor Licence Renewal from 6 April 2024
On 6 April 2024, the Home Office abolished the requirement to renew a sponsor licence every four years. Previously, licence holders had to submit a renewal application and pay a fee to keep their licence active beyond the four-year period.
Here’s what the change entails:
- No More Renewal Applications: Employers no longer need to submit a sponsor licence renewal application every four years. This eliminates both the administrative burden and the government fees associated with sponsor licence renewals.
- Automatic 10-Year Extension: All sponsor licences due to expire on or after 6 April 2024 have automatically had their expiry dates extended by 10 years. This applies to both existing licences and new licences issued after that date.
- No Action Needed by Employers: The extension is automatic. Licence holders do not need to take any action or pay any renewal fees for this extension.
While the end of renewals is a significant relief for businesses, it is important to note that compliance duties remain in place. The Home Office will continue conducting compliance audits—both announced and unannounced—so employers must ensure they are adhering to their responsibilities as sponsors.
Ongoing Compliance: What Employers Need to Know
Even though sponsor licence renewals are no longer required, businesses must still comply with the same duties and obligations they have as sponsors. The Home Office continues to audit sponsor licence holders to ensure compliance with UKVI regulations.
Key Compliance Duties:
- Record-Keeping: Employers must maintain accurate records of their sponsored workers, including copies of passports, visas, and other important documentation such as the Certificate of Sponsorship (CoS). Borderless streamlines Home Office compliance by automating key processes and integrating seamlessly with your HR and Sponsor Management System.
- Reporting Changes: Any significant changes to a sponsored worker’s employment, such as job role changes, early contract terminations, or departure from the company, must be reported to the Home Office within 10 working days through the Sponsor Management System (SMS).
- Monitoring Employee Status: Employers must ensure that all sponsored employees are complying with the terms of their visa and remain eligible to work in the role they were sponsored for.
Failing to meet these obligations can result in penalties, including the suspension or revocation of your sponsor licence. This makes it essential for businesses to maintain compliance, even in light of the new renewal rules.
What Happens If You Missed the April 2024 Change?
If your licence expired before 6 April 2024, and you did not renew it, you would still have had to go through the old sponsor licence renewal process to continue sponsoring workers legally. Any employer whose licence expired before this date and who failed to renew would have lost their ability to sponsor foreign workers and would need to reapply for a new sponsor licence.
What to Do If You’re Selected for a Compliance Audit
The Home Office has made it clear that they will continue to carry out compliance audits to ensure businesses are meeting their sponsorship obligations. Audits can be announced or unannounced, and the UKVI will look at various factors, including your record-keeping, reporting processes, and overall compliance with sponsor duties.
How to Prepare:
- Ensure Your Records Are Accurate: Keep all documents related to sponsored workers, such as employment contracts, right-to-work documents, and salary records, up to date.
- Review Your HR Systems: Make sure your HR team is aware of the sponsor duties and that systems are in place to report any changes in worker circumstances to the Home Office promptly through the SMS.
- Train Key Personnel: Make sure that anyone responsible for managing the sponsor licence, such as HR staff or the company’s SMS Level 1 User, is fully aware of the compliance requirements.
How to Maintain Compliance in the Absence of Renewals
With the removal of sponsor licence renewals, businesses can no longer rely on renewal applications as an opportunity to update their licence information. This means staying on top of compliance is more important than ever.
Best Practices for Ongoing Compliance:
- Regularly Audit Your HR Practices: Conduct regular internal audits to ensure that all records are current and accurate. Don’t worry if this happens, Borderless can support you with this.
- Keep the Home Office Informed: Continue to update the Home Office with any relevant changes, such as changes in key personnel (Authorising Officer or Key Contact) or changes in the business (like a change of address) using the SMS.
- Stay Up to Date with UKVI Rules: Immigration rules and sponsor licence requirements can change, so it’s important to stay informed about any updates to ensure you remain compliant.
What If Your Sponsor Licence Is Revoked?
If your sponsor licence is revoked, you will no longer be able to sponsor foreign workers, and any sponsored employees may lose their right to work in the UK. You will also need to go through a lengthy and potentially costly process to reapply for a new sponsor licence.
In the event of revocation:
- Understand the Reasons: The Home Office will provide specific reasons for sponsor licence revocation, often related to compliance issues. Addressing these issues is crucial before you can reapply.
- Consider Legal Advice: If you face revocation, consulting with an immigration expert can help you navigate the next steps and understand whether an appeal or a fresh application is the best course of action.
Conclusion
The abolition of the four-year sponsor licence renewal requirement as of 6 April 2024 is a welcome development for businesses across the UK. With the automatic 10-year extension of all sponsor licences, employers can enjoy reduced administrative burdens and cost savings. However, it is critical to remember that compliance remains just as important. UKVI will continue to conduct audits, and failing to meet your sponsor duties could result in the loss of your licence.
To avoid any issues, ensure your HR systems, record-keeping, and reporting practices are robust and compliant with the sponsor licence duties. This will help you maintain your sponsor licence and continue to hire foreign talent with confidence.
For more information or assistance with maintaining compliance, don’t hesitate to get in touch with immigration experts who can guide you through the process.
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