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Sponsorship Licence

Any South African businesses operating in the UK must ensure they have a Sponsorship Licence before recruiting overseas workers.

Companies unclear about the process for obtaining a Sponsorship Licence should reach out to our immigration experts. Get in touch with IAS today online or call us on +44 (0) 3316300929.

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    Overview of UK Sponsorship Licence

    A Sponsor Licence allows companies to employ foreign workers if the positions can not be filled by existing UK-based citizens.

    Having a Sponsorship Licence is a legal requirement and all South African owned businesses planning to operate in the UK must apply for one before recruiting workers from overseas.

    Each licence is issued for a set period and employers must ensure they follow all the ongoing requirements of holding the licence otherwise they risk removal of the licence, as well as fines and possible imprisonment if they are found to be illegally using a workforce that is not compliant with UK immigration laws.

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    Do I Need a Sponsorship Licence?

    You are required to have a Sponsorship Licence if you plan to sponsor workers to live and work for you in the UK. Without a licence you are unable to fulfil any vacant positions with migrant workers or issue Certificates of Sponsorship to potential employees.

    There are two different forms of Sponsorship Licence available to companies or organisations operating in the UK.

    A Sponsor Licence for workers is required if you plan to offer positions for people coming to the UK on the following visa pathways:

    • Skilled Worker Visa
    • Specialist Worker Visa
    • International Sportsperson Visa
    • Minister of Religion Visa

    If you plan to use overseas labour on a temporary basis or for a shorter fixed-term, then a Temporary Worker Sponsorship Licence will be needed for those working in the UK on the following visa routes:

    • Any Global Business Mobility route including, Service Supplier, Graduate Trainee, Secondment Worker or UK Expansion Worker
    • Scale-up Worker
    • Creative Worker
    • Charity Worker
    • Religious Worker
    • Seasonal Worker

    You should ensure that you are able to prove that the role can not be filled by a settled worker already in the UK and that the position is necessary for the operation and success of your company.

    In addition, you should ensure that you are able to meet the minimum salary and working conditions required by the UK government when employing workers.

    What is a Certificate of Sponsorship?

    As a Sponsorship Licence holder you are able to issue a Certificate of Sponsorship (CoS) to a potential worker. This important document, issued by the sponsoring employer, is used by the Home Office to issue the appropriate visa to enable the person to come to the UK to live and work.

    All sponsored visa applicants must have a valid CoS as part of their visa application.

    There are two types of Certificate of Sponsorship:

    • Defined – for a worker who is currently overseas and needs a CoS to enter the UK.
    • Undefined – if a visa holder is already in the UK and is applying to remain.

    Each Certificate of Sponsorship must include accurate details of the job role and salary. Failure to issue the wrong CoS or one with incorrect details can have serious consequences that may result in legal penalties, as well as revoking of your Sponsor Licence.

    How to Register As A Licensed UK Visa Sponsor

    To register for a UK Visa Sponsorship Licence you will need to complete an online application form on the UK government’s Sponsorship Management System (SMS) as well as submit the necessary paperwork.

    The SMS is a crucial part of being a Sponsor Licence holder and is used to keep track of all workers’ information to ensure they have the correct permissions to work and live in the UK.

    As part of the application for the licence your business must assign a Level 1 User on the SMS to be responsible for the processes involved in being a sponsoring employer.

    You must ensure you provide the correct information on what types of workers or students you plan to sponsor, details of the job roles and where they will be based.

    It may also be necessary to conduct a Resident Labour Market Test to prove there are no existing settled workers in the UK who would be suitable for the job and therefore, you must recruit from overseas. However, this requirement is not required for all categories of employment, especially if there is a skills shortage in the UK at present.

    A fee is applicable when applying, the exact amount required by the Home Office will depend on the size and type of your organisation.

    For help in applying for a Sponsorship Licence, you should reach out to an immigration expert otherwise you could experience delays in being able to recruit vital workers, which could impact on productivity and profits.

    Documents Needed for A Sponsorship Licence

    Submitting the correct paperwork is a vital step in the route to being granted a Sponsorship Licence. You will be asked to provide a range of different documents as part of the application for a UK Sponsor Licence and to be able to employ migrant workers.

    You will be expected to provide documents such as:

    • Recent audited financial accounts
    • Up-to-date bank statements
    • Proof of insurance
    • VAT Registration Certificate
    • Evidence of HMRC compliance and registration, for example PAYE records
    • Details of ownership of the business and associated property.

    A crucial part of the application is to showcase why you need a licence and provide details of the type of business the company will be conducting in the UK. Applicants may need to provide information such as operating hours, company staff structure, contact details and list of current employees.

    If the South-African owned business plans to recruit skilled workers, then it will need to provide further information such as Standard Occupational Classification (SOC) Code, guaranteed salary data and an accurate job description.

    All paperwork must be submitted within five days of making an application, therefore you should seek advice from an immigration professional if you are unsure about which documents to provide otherwise you could face lengthy delays or even rejection of a licence.

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      What Is The Processing Time For a Sponsor Licence?

      The processing time for a UK Sponsorship Licence can vary depending on a number of factors such as Home Office backlogs or the need to carry out a pre-licence compliance visit, but generally a first-time licence application can take around two months to be decided.

      There is an option to speed up this time frame via a priority processing service. For an additional £500, the Home Office will review the application within ten working days. It is important to note that paying the extra cost will not guarantee a positive result, just that the decision will be made quicker.

      What Is The Cost Of A UK Sponsorship Licence?

      The exact cost of a Sponsor Licence does vary depending on the size and type of company applying for one.

      A small business is required to pay a fee of £536. This kind of organisation must meet at least two of the following criteria to qualify for this reduced rate:

      • Have an annual turnover of equal or less than £10.2 million
      • Employ 50 or less workers
      • A balance sheet not totalling more than £5.1 million,

      The cost for a large company is £1,476 and this must be paid at the time of application.

      There are also a number of other associated costs for Sponsorship Licence that a holder should be aware of:

      • Annual Immigration Skills Charge of £1,000 per worker or £364 if a small company or registered charity.
      • Associated fees for the sponsored worker’s visa application
      • £199 per Certificate of Sponsor issued.

      What Are The Requirements and Eligibility Criteria of a UK Sponsorship Licence Holder?

      There are no set restrictions on the industry or size of a business that is able to apply for a Sponsor Licence in the UK. However, it is vital that the sponsoring company is able to meet the Home Office’s eligibility and suitability criteria.

      It is important when applying then you include all relevant information otherwise you could be refused a licence or have to reapply. This can be costly as the application fee is usually non-refundable.

      The Home Office must be satisfied that the organisation requesting the licence is genuine and currently trading in the UK. There are no set limits on how long a company must have been operational, but it is vital to demonstrate the employer is a lawful operation. In most cases, this means being registered with Companies House or having sufficient financial records.

      A key criteria of relevance for a South African-owned firm is that the company applying to be a sponsor must be trading in the UK. While this does not always mean having a physical office/factory/base in the country, the business must be able to satisfy the Home Office that it will be trading lawfully in the United Kingdom and therefore requires workers to be based there.

      All owners of the firm and key employees must not have any unspent criminal convictions or any history of immigration law violations.

      Part of the application process requires firms to demonstrate that they will be able to adequately carry out their role as a sponsor. This means having the right processes and checks in balance to ensure compliance with UK employment law and a duty to employ workers who are suitable.

      It is vital that potential Sponsorship Licence holders agree to only offer genuine employment opportunities to overseas workers. The Home Office will check that any roles do exist and have appropriate job descriptions to meet the visa requirements.

      In some cases, immigration officials may wish to see the business in person before approving a Sponsor Licence to establish if an operation is genuine. They may also consult with local councils to check that the firm has the correct planning permissions and trading licences in place.

      Sponsorship Licence Obligations

      South African firms that do have a valid Sponsorship Licence must carry out a number of obligations as part of having the licence.

      Any failure to comply with these obligations could mean the Home Office can revoke the licence and the company will no longer be able to employ workers from overseas.

      Each Sponsor Licence holder must keep accurate records of current and past workers to demonstrate they are not benefiting from illegal working. These records can be reviewed by a Home Office official and they must be kept up-to-date at all times.

      Employers will need to ensure they retain copies of the following documents of staff:

      • Passport or travel documents
      • Employment contract, showing contract terms and salary. This must reflect the details given on the Certificate Of Sponsorship.
      • National Insurance number (if applicable)
      • Contact details – past and current
      • Biometric Resident Permit

      As well as day-to-day record keeping, licence holders must notify the Home Office of changes of circumstances that could impact on an employee’s right to work in the UK. This means having robust processes in place to ensure records are correct and contact details etc are current.

      In addition, employers must report incidents of unexpected absence to the immigration authorities such as being away from work for more than ten days without a reason or having their contact terminated.

      If the Home Office does carry out an inspection visit they will expect to be able to access records on all sponsored employees which show up-to-date information on any authorised absences, illness or study leave.

      It is also important for Sponsor Licence holders to inform the authorities if their own circumstances change, such as an office relocation, change in management or alterations to anyone listed as key personnel on the licence.

      Any changes can be notified via the SMS and, depending on the nature of the changes, it could result in a Home Office inspection visit.

      Failure to follow the Sponsorship Licence obligations could result in removal of the licence, as well as potential fees and imprisonment.

      Reach out to IAS for help in ensuring your South African-owned firm is meeting all of the required duties to avoid potential financial and reputational consequences.

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        Assigning Key Sponsor Licence Roles to Staff

        Part of being a Sponshorship Licence holder means ensuring that staff members are responsible for a number of key roles in processing and complying with right to work checks.

        The Home Office requires a company to give information about who will be responsible for these roles when applying for the licence.

        Companies must select a permanent member of staff, partner or director to take on the role. Each role can be held by the same person or a number of people as long as they meet the requirements.

        • An Authorising Office – this must be a competent senior part of the business who is responsible for anyone else accessing the SMS.
        • A Key Contact – someone responsible for communicating with the UK immigration services.
        • Level 1 User – who will oversee the day-to-day access of SMS. This person can also appoint Level 2 users if it is deemed necessary. This is usually required by larger firms that issue large numbers of CoSs.

        What Is A Immigration Compliance Review?

        If a company is suspected of not carrying out the necessary right to work checks when employing overseas workers, then it could be visited by UK immigration officers.

        However, the Home Office is also allowed to carry out immigration compliance reviews as a matter of course to double-check a licence holder is following the relevant processes.

        Therefore, many firms may wish to carry out their own internal compliance reviews or audits to ensure they have the right procedures in place when recruiting workers from abroad.

        These mock audits play a key role in ensuring that a company can continue to hold a licence and can reveal any potential flaws in HR systems.

        IAS offers an invaluable service that involves a on-site visit to assess any Sponsorship Licence’s holders practices and discover any problems that could arise in a Home Office conducted visit. Producing a comprehensive report, the benefits of a mock audit can be substantial and cost-saving in the long-run.

        Get in touch to find out more about this two-day package that has benefit firms operating in a whole range of industries.

        Sponsor Licence Renewals

        As of April 2024, the UK government have introduced guidelines dictating that sponsor licences no longer need to be renewed for them to stay active.

        This means that sponsor licences, rather than expiring every four years, will now last indefinitely on the condition that businesses continue to regularly and consistently adhere to all Home Office guidelines regarding sponsor licence compliance.

        Note that any businesses with sponsor licences that expire before 6 April 2024 will need to apply to extend their licence one last time before the new rule comes into effect. They will also still have to pay the £536 renewal fee.

        Businesses whose sponsor licences were set to expire after 6 April 2024 do not need to take any action. Furthermore, if these businesses had already applied for a renewal , they will be eligible for a refund on their renewal application.

        How Can IAS Help?

        At IAS we can help you apply as a South Africa business operating in the UK to apply for a Sponsorship Licence. We can help you complete the initial application and review your paperwork to ensure you have a straightforward path to being given a licence.

        We also have a dedicated team that can carry out a mock compliance visit to ensure you are ready for a visit from the Home Office if necessary or highlight any potential issues with your current compliance procedures.

        Our team can also help with the processing of numerous visas for your potential employees coming from overseas to live and work in the UK. Call us for a consultation today or get in touch online. We are here to assist you with all immigration enquiries.

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                  FAQs

                  As of 6 April 2024, sponsor licences do not need to expire and do not need to be renewed

                  If your application for a licence is rejected, then you may miss out on securing suitably skilled workers and face additional costs or experience a drop in productivity.

                  Many applications are rejected because of incomplete or incorrect documentation being submitted. Therefore, you may wish to contact an immigration specialist to help with a reapplication to avoid another rejection.

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