Tier 2 Sponsor Licence Renewal

The requirement for sponsors to renew their sponsor licence every four years is being abolished from 6 April 2024. UK sponsor licences due to expire on or after 6 April 2024 are now being automatically extended by 10 years. Licences expiring prior to 6 April 2024 must apply to renew their licence under the following guidance. 

This article pre-dates the change in rules from 6 April 2024. If you have any queries about your sponsorship licence, including its validity, contact us.

Sponsor licence renewal for licences expiring before 6 April 2024

For many companies, the Tier 2 sponsor licence renewal application is a more demanding and involved process than the initial licence application.

Preparation will be key. Your organisation should undertake proactive steps to ensure readiness for this process and the potential scrutiny which may result from the Home Office as to your organisation’s continued compliance with the regulations. In addition, as part of the licence extension process, the UKVI reserves a right to undertake a compliance visit to sponsor companies and request corporate documentation as deemed necessary.

Why the Tier 2 sponsor licence renewal matters

Under the Points Based System (PBS) UK employers have to be licensed by UK Visa and Immigration (UKVI) before they can employ non-EEA workers.

From 1 January 2021, EU workers coming to the UK will also need to be sponsored under the skilled worker route.

Sponsor licences are granted for an initial period of four years. To continue to employ PBS workers lawfully beyond this four-year period, you will need to apply to renew your sponsor licence ahead of licence expiry.

Correctly applying to renew your organisation’s sponsor licence is crucial for business operations, and retaining position on the register of sponsors and permission to continue to sponsor migrant workers.

A refused renewal application can have devastating effects on a business and its PBS workers. Without a lawful sponsor, PBS workers will see their leave curtailed unless they can find qualifying employment before their curtailed leave expires.

If the business does the lose out on PBS workers, they will have to look at recruiting again, which can be problematic in sectors where skills shortages prevail.

Common reasons for Tier 2 licence refusal include:

• Failure to pass a UKVI compliance audit – your organisation will be evaluated against the legal requirements under the sponsor licence.
• Failure to have retained the required documentation on sponsored migrants – record-keeping duties are strict and ongoing.
• Failure to have advised UKVI of significant changes to company structure and personnel – strict timescales apply when notifying of organisational changes.
• Failing to respond to UKVI’s enquiries in a timely manner – engaging with the Home Office will help your cause.
• Failure to pass the ‘genuineness test’ – if the role is perceived not to be a genuine vacancy requiring an overseas skilled worker.
• Failure to comply with UKVI security standards

Tier 2 sponsor licence renewal process

Sponsors are able to apply for their renewal up to 3 months before the expiry date. The licence expiry date is stated on the summary page of your Sponsor Management System (SMS). UKVI issue reminders of the expiry via the SMS, so it is important to check the contact details on the licence are up to date to ensure the prompts are received.

In any event, we advise making the application as soon as possible to allow time to deal with any potential issues while your current licence remains valid.

You should ensure that licence management to date has been compliant. An audit of your organisation’s compliance with its sponsorship duties can be used to identify areas of risk and confirm areas of compliance. Look specifically at key duties such as maintenance of records for migrant workers, carrying out necessary compliance checks on your staff and timely reporting of all necessary changes in migrant activities to UKVI.

Companies submit their Tier 2 licence renewal application via the online Sponsor Management System (SMS). First check that all of the information on the SMS is correct and all reports are up to date. Any errors or updates will need to be reported before the extension application is submitted. Also conduct a review of the relevant documentation under Appendix A of the Sponsor Guidance. While the Home Office will conduct checks online and cross-reference with other available data sources, it is still common for requests to be sent to sponsors for additional information or documentation. Such requests should be responded to within 5 days to avoid enforcement action, as such it is good practice to have documents in order in preparation.

The nominated Level 1 User will be required to complete a sponsor declaration and pay the relevant application fee:

Once submitted, the application will be assessed against the Home Office criteria requiring the sponsor to be operating legally in the UK, still suitable to be a licensed sponsor and able to meet their duties at the levels expected. The organisation’s certificates of sponsorships will also be reviewed in light of the licence and how they have been assigned to PBS visa workers.

Preparing for a Home Office inspection

Renewal applications commonly trigger a Home Office site visit. This is fairly routine and employers should take steps when preparing their renewal application to ensure they are ‘match-fit’ for a site inspection should this be requested.

During the visit, Home Office officials will look to assess whether your organisation is complying with its duties under the licence, for example in respect of record keeping, key personnel appointments and migrant workers. They will ask to see relevant employee records and documentation and may also ask to speak with relevant members of staff.

Issues or breaches identified during the inspection can result in refusal of your renewal application, so it pays to be well prepared.

What if your Tier 2 sponsor licence has expired?/h2>
Licences can be left to expire for many reasons – perhaps there has been a change in personnel responsible for the licence, or there has been a failure or oversight in updating the SMS contact details and the expiry reminders have not been received by the correct person. In practice, the issue often only comes to the employer’s attention when a PBS worker applies to the Home Office for ILR, and the out of date licence is then flagged.

If you become aware that your licence has expired, you will need to take swift corrective action to try to retain your ability to lawfully hire PBS workers.

This may require a new application to be made for a new sponsor licence, or you may be able to apply for reinstatement by the Home Office. Taking immediate advice on your options can help to rectify the situation and help mitigate further compliance risks.

Need help with a renewing your sponsor licence?

DavidsonMorris are recognised experts in licence renewal applications, offering a complete Tier 2 licence renewal application service which includes assisting with initial considerations as to the type of sponsorship application and suitable key personnel, helping you to collate the appropriate supporting documentation and auditing your HR systems and procedures to get them in order before the UKVI visit

We have particular experience and success with complex renewal applications, such as expired licences and where there have been compliance breaches or previous Home Office enforcement action.

For specialist advice on your Tier 2 sponsor licence renewal,  contact us.

Tier 2 sponsor licence renewal FAQs

Last updated: 24 January 2024