Sponsor Licence Change of Circumstances

Given the business-critical nature of sponsoring migrant workers, careful and effective management of your sponsor licence is essential to avoid Home Office enforcement action that could impact your operations.

As a UK sponsor licence holder, you must ensure you have the necessary HR processes in place to maintain an up-to-date sponsor licence at all times and that you comply with your duties and obligations, including your duty to inform the Home Office of certain changes in circumstances relating to a migrant worker, as well as changes to your business.

This guide sets out your duty to report sponsor licence changes of circumstances, from the rules relating to reporting certain migrant activities and business changes, to the implications of your organisation failing to meet this duty.

Sponsor licence duties

Sponsor licence holders must act in accordance with the UK Immigration Rules and meet all of their compliance duties as set out under the Home Office’s sponsorship guidance for employers.

In particular, you will be responsible for assigning Certificates of Sponsorship (CoS) to each prospective worker that you are looking to sponsor. You will also be given access to the Sponsor Management System (SMS) to manage your licence. The SMS is an online portal that allows you to carry out day-to-day sponsor activities, including reporting any changes to the Home Office. When you apply for a licence you will be required to nominate various key personnel within your business to manage the sponsorship process and to use the SMS.

Duty to report changes in circumstances

As a licence holder you are under a duty not only to report certain migrant activities, but also any significant changes to your business.

Changes to your organisation

In addition to reporting certain migrant activities, or any change in their circumstances, you must also report to the Home Office any significant changes in the circumstances of your business. This can include any of the following:

If you sell all or part of your business
If you stop trading or become insolvent
If you substantially change the nature of your business
If you are involved in a merger or take-over

Additionally, you must notify the Home Office of any organisational changes, for example, if you are changing the name and/or address of your business, if there are any changes in the size or structure of the business, or if you are making changes to the key personnel responsible for managing your sponsor licence.

You will also need to tell the Home Office if you have been convicted of a relevant criminal offence, such as fraud or money laundering, even though this could have an adverse effect on your sponsor licence, including its potential revocation. In other cases, certain changes such as a complete takeover may result in the need for a new sponsor licence to be applied for.

Nonetheless, as a sponsor licence holder, you are still legally obliged to report any sponsor licence change of circumstances, or risk action being taken against you by the Home Office in any event for your failure to do so.

When do you need to report sponsor licence changes by?

There are varying different timescales involved when reporting any changes, depending on the nature of the sponsor licence change of circumstances that you are seeking to report.

By way of example, if a migrant worker is absent from work for more than 10 consecutive working days without permission, you must report this within 10 working days of the 10th day of absence. Many other changes to a sponsored worker’s circumstances must also be reported to the Home Office within 10 working days.

If, on the other hand, you are reporting a change in circumstances to your business, such as selling all or part of your business, or being involved in a merger or take-over, you must generally report this within 20 working days.

Procedure to report changes

In the majority of cases, to register any sponsor licence change of circumstances, a report will need to be submitted within the SMS by a Level 1 user. This is the person responsible for the day-to-day management of the sponsor licence using the online portal.

Certain changes will be automatically updated within the SMS, whereas others can take up to 16-18 weeks to be processed.

In specific instances, however, you may not be permitted to use the SMS to report or request a change, for example, to appoint a new Level 1 user or to surrender your licence. Instead, you will need to complete a “change of circumstances” form.

Priority change of circumstances

To register a change with a faster response, you may be able to use the priority service at a cost of £200 to report certain changes, including:

additional certificate of sponsorship (CoS) allocation
annual certificate of sponsorship (CoS) allocation
add a new level 1 user
change level one user
replace the authorising officer (AO)
amend the authorising officer (AO)
replace the key contact (KC)
amend the key contact (KC)
add a representative
amend your organisation details – moved to new premises

Importantly, the priority service does not guarantee the request will be approved.

How to make a priority application

The priority service is only open to sponsors who hold a valid, A-rated Worker or Temporary Worker licence. The changes being reported cannot already have been submitted.

The priority service is not open to premium sponsors.

Priority requests should be submitted via the SMS and a completed priority request application then emailed to the Worker and Temporary Worker priority service mailbox: postlicencepriorityservice@homeoffice.gov.uk, with a completed Worker and Temporary Worker priority request form as an attachment.

Multiple priority requests can be made at the same time within the same email, but these must be on the same licence.

If the request is to replace the Authorising Officer or appoint a representative, the printed submission sheet must also be submitted.

Under the priority service, requests for additional CoS can only for be for undefined CoS.

The priority service is only open from 9am to 5pm Monday to Friday and all requests made outside of these times will not be considered. A maximum of 60 priority service requests will be accepted each day. If the service is fully subscribed, the user will receive an email response notifying to apply on the following working day. If the request is eligible, the user will receive an email containing a link to make payment. Payment must be made within 72 hours.

Failure to notify of sponsor licence changes

As a licensed sponsor, you are expected to play your part in ensuring that the immigration system is not abused, not least in identifying at an early stage any patterns of migrant behaviour that may give cause for concern.

As such, in the event that you fail to notify the Home Office of any sponsor licence change of circumstances, both in relation to a migrant worker or your business, or you otherwise fail to comply with any of your sponsor duties, the Home Office has a number of measures that it can implement to penalise incompetent and/or dishonest licence holders.

These measures can include a limit placed on the number of CoS you can assign, or unused CoS being withdrawn. It can also lead to your sponsor licence being downgraded, suspended or revoked.

In circumstances where the Home Office have reason to believe that you have breached your sponsorship duties, it will first consider the nature and extent of the suspected breach.

Where relatively minor, and you are willing and able to correct the breach, typically your licence will be downgraded from an A to a B-rating and an action plan will be issued setting out the steps you must take to retain your licence.

However, where there is a serious breach indicating a significant or systematic failing such that you pose a serious threat to immigration control and/or you no longer meet the eligibility or suitability requirements for holding a licence, the Home Office is more likely to suspend your licence and investigate the matter further. It may even revoke your licence altogether without prior suspension.

Your licence will also be revoked if you fail to comply with any action plan designed to reinstate your licence rating.

Needless to say, if your sponsor licence is revoked, this can have a hugely detrimental impact on your business, not least if you are heavily reliant upon employing skilled migrant workers, either due to shortages of skilled workers in the domestic labour market or otherwise.

Having revoked your sponsor licence, the Home Office will also curtail the leave of any migrant workers who are currently employed by you.

Can you appeal against Home Office enforcement action?

In the event that your sponsor licence is revoked in consequence of you failing to report any sponsor licence change of circumstances, you will have no right of appeal. That said, you may be able to argue that any decision reached by the Home Office was either unlawful, unreasonable and/or procedurally improper. This is known as seeking a judicial review.

That said, judicial review is a process by which a court reviews the lawfulness of a public body’s decision, examining the way in which the conclusion was reached, rather than evaluating the merits of the decision itself. As such, this can be difficult to prove, not least because you would have to demonstrate to the court that the decision is one that no reasonable body could have come to.

Having had your sponsor licence revoked, although there is no right of appeal, you will be allowed to re-apply. That said, this does not necessarily mean that your application will be successful, and you will not be allowed to submit you fresh application until the end of the appropriate cooling-off period.

The cooling-off period is usually 12 months from the date you were notified by the Home Office of the revocation. If you do make an application before this period has passed, the Home Office will refuse this.

If you submit an application after the cooling-off period, it will be treated in the same way as any other application, requiring you to pay the relevant fee and submit the necessary documentation in support. You should, however, address any reasons why your previous licence was revoked before you re-apply.

Need assistance?

One of your main responsibilities as a sponsor licence holder is to monitor the immigration status of any migrant workers. As such, you must have in place sufficient HR systems that enable you to do this, from tracking and recording employees’ attendance to reporting to the Home Office if there is a problem, for example, where a migrant employee stops coming to work.

As part of this process you should keep copies of relevant documents for each employee, including passport and information relating to right-to-work checks, ie; to ensure that a worker is entitled to be in the UK and to undertake the work in question. You must also keep all employee contact details up-to-date.

In the event that you don’t have adequate HR systems in place and the Home Office decide to carry out a compliance review, unannounced or otherwise, you run the risk of action being taken against you on the basis that you are not deemed capable of carrying out your sponsorship duties.

It is therefore imperative that you ensure that your HR systems will enable you to comply with all of your duties and obligations as a sponsor licence holder, not least in monitoring and reporting migrant activities.

You must also ensure that your key personnel, ie; those responsible for using the SMS on a day-to-day basis, are not only trustworthy and capable, but kept up-to-date with any relevant organisational changes that may need to be reported at relatively short notice.

DavidsonMorris’s specialist business immigration lawyers work with UK employers on all aspects of the UK sponsor licence, from the initial application, dealing with refusals, ongoing management of the licence once issued and with the renewal application after four years. We can also support with Home Office compliance penalties such as suspensions and revocations. With our compliance audit service you can help ensure your organisation stays ‘match ready’ in the event of a Home Office compliance visit.

If you have a question or need help with a sponsor licence application, contact us.