Introduction to the UK Sponsor Licence
A UK Sponsor Licence is the official authorisation granted by the Home Office that allows a UK-based business to legally employ foreign nationals under specific immigration routes, including the Skilled Worker and Temporary Worker categories. Without this licence, UK employers cannot sponsor or hire individuals who are subject to immigration control.
This comprehensive guide explains everything UK employers need to know about sponsor licences in 2025. First, it covers eligibility and application requirements. Next, it details ongoing compliance obligations and fees. Additionally, it outlines minimum salary rules, and finally, it explains the process for licence renewal.
What Is a Sponsor Licence?
A Sponsor Licence (previously known as a Tier 2 or Tier 5 licence) enables UK employers to sponsor foreign workers to fill eligible roles within their organisation. Once granted, the employer is listed on the Home Office Register of Licensed Sponsors, confirming their ability to assign Certificates of Sponsorship (CoS) to approved applicants.
Sponsor licences are typically valid for four years and must be renewed before expiry if the employer wishes to continue sponsoring workers.
Why a Sponsor Licence Is Required
Employers must hold a valid sponsor licence before hiring workers who require immigration permission to work in the UK. This system allows the Home Office to monitor compliance, prevent illegal working, and ensure fair and lawful employment practices.
Holding a sponsor licence allows employers to:
- Recruit foreign nationals under the Skilled Worker, Senior or Specialist Worker, and Temporary Worker routes.
- Fill essential skills gaps and access a wider global talent pool.
- Strengthen business operations through the employment of qualified international staff.
Employer Eligibility Criteria
To qualify for a sponsor licence, an organisation must first meet the following Home Office criteria:
Firstly, it must operate as a genuine and lawfully established business in the UK. Additionally, it should have no history of immigration offences, fraud, or criminal convictions. Moreover, the organisation needs to maintain effective HR and record-keeping systems to track and manage sponsored workers. Finally, it must be capable of meeting all compliance and reporting obligations under the Immigration Rules.
Furthermore, before approving a sponsor licence, UK Visas and Immigration may conduct a pre-licence compliance inspection. This ensures that your HR systems and internal processes are sufficient to manage sponsored staff effectively.
The Sponsor Licence Application Process
Identify the Right Licence Type
Choose whether your organisation needs a Worker Licence (for Skilled Workers or senior roles) or a Temporary Worker Licence (for short-term positions or specific sectors).
Check Your Business Eligibility
Ensure that your organisation meets all Home Office requirements and is ready for potential compliance checks.
Prepare the Required Supporting Documents
You must provide at least four supporting documents as part of your application. Common examples include:
- Certificate of Incorporation or business registration documents
- VAT registration certificate
- PAYE and HMRC reference numbers
- Business bank statements
- Proof of trading premises and lease agreements
Appoint Key Personnel
You must designate the following roles to manage your licence through the Sponsorship Management System (SMS):
- Authorising Officer – A senior person responsible for the organisation’s compliance.
- Key Contact – The primary liaison between the business and the Home Office.
- Level 1 User – Responsible for daily management of the sponsor licence and SMS updates.
New 2025 Compliance Update: For new licence applications, the primary Level 1 User must typically be both an employee, director, or partner and a ‘settled worker’ in the UK (someone with Indefinite Leave to Remain, British, or Irish citizenship).
Submit the Online Application
Complete the sponsor licence application form online and specify which visa categories you wish to sponsor under.
Pay the Relevant Home Office Fee
The fee depends on your organisation’s size and licence type. See the updated 2025 fees below.
Send Supporting Documents
Submit your supporting documents electronically, usually within five working days of submission, in accordance with Home Office guidance.
Await the Decision
The standard processing time is around eight weeks. However, you can request priority processing, subject to availability, which allows for a faster decision at an additional cost.
Receive Your Licence Rating
Once approved, your organisation will receive either an A-rating (standard) or a B-rating (requires improvement). Typically, new sponsors are granted an A-rating initially, which reflects full compliance with Home Office requirements.
Sponsor Licence Fees (2025)
| Type of Organisation | Licence Type | Home Office Fee |
| Small or Charitable Sponsors | Worker / Temporary Worker | £574 |
| Medium or Large Sponsors | Worker / Temporary Worker | £1,579 |
Small sponsor definition (2025): an organisation meeting at least two of the following:
- Annual turnover of £15 million or less
- Total assets worth £7.5 million or less
- 50 or fewer employees
Updated Compliance Note: The Home Office has mandated that sponsors must not pass on the cost of the Sponsor Licence Fee or CoS Fee (£525) to the sponsored worker. The CoS fee for the Skilled Worker route increased to £525 effective 9 April 2025.
Minimum Salary Requirements (2025)
For Skilled Worker and Senior/Specialist Worker routes:
- General minimum salary threshold: £41,700 per year or the ‘going rate’ for the role, whichever is higher.
- Certain roles or shortage occupations may have lower thresholds, as defined by the Home Office.
New Compliance Point: When checking the minimum salary, employers must also subtract certain deductions related to visa costs or other immigration-related payments from the worker’s salary. This ensures that the employee’s actual take-home pay meets the legal minimum.
Immigration Skills Charge (ISC)
Employers sponsoring workers under the Skilled Worker or Senior/Specialist Worker routes must pay the ISC when assigning a CoS.
| Duration of Employment | Small/Charitable Sponsor | Medium/Large Sponsor |
| First 12 months | £364 | £1,000 |
| Each additional 6 months | £182 | £500 |
The ISC must be paid at the time of assigning the CoS. Failure to pay will result in refusal of the sponsored worker’s visa application.
ISC rates remain standard, but the previously referenced “16 December 2025 effective date” is not an official change—these are the ongoing 2025 rates.
Common Reasons for Sponsor Licence Refusal
The Home Office may refuse a sponsor licence application for various reasons, including:
- Insufficient or inconsistent documentation.
- Evidence that the business is not genuinely trading.
- Previous breaches of immigration or employment law.
- Inadequate HR and compliance systems.
- Submission of false or misleading information.
- Unspent criminal convictions of the business or key personnel.
- Failure to pay the correct Home Office fees.
- Refusal to cooperate during a pre-licence compliance visit.
A refusal may result in a cooling-off period before reapplying, so careful preparation is essential.
Validity, Renewal, and Revocation
A sponsor licence is valid for four years from the date of issue. Employers must apply for renewal before expiry to continue sponsoring workers.
If the Home Office finds evidence of non-compliance, it may:
- Downgrade your rating from A to B.
- Suspend or revoke your licence.
- Prevent future sponsorship until compliance is restored.
Failing to renew your licence before it expires will automatically end your ability to sponsor workers.
Sponsor Duties and Compliance Requirements
Holding a sponsor licence comes with significant responsibilities. Employers must:
- Keep accurate, up-to-date records for each sponsored worker.
- Report changes to employment status, salary, or location within 10 working days via the SMS.
- Ensure that sponsored roles meet the minimum salary and skill level for the relevant visa route.
- Conduct right-to-work checks before and during employment.
- Cooperate with UKVI inspections, which may occur without notice.
- Ensure the role meets the appropriate skill level. For new Skilled Worker applicants, the sponsored role must now typically be at RQF Level 6 (Regulated Qualifications Framework) or above (equivalent to a bachelor’s degree level), unless it appears on the new Temporary Shortage List.
Failure to comply can lead to civil penalties, licence suspension, or criminal prosecution.
Managing Your Licence After Approval
After receiving your sponsor licence, you will gain access to the Sponsorship Management System (SMS). Through this online platform, employers can:
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Assign Certificates of Sponsorship to eligible workers.
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Update company details and licence information.
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Record and report changes related to sponsored employees.
Furthermore, consistent monitoring, accurate reporting, and timely renewals are essential for maintaining a strong compliance record. By doing so, your organisation can avoid penalties and ensure ongoing adherence to Home Office requirements.
How LawSentis Can Help
LawSentis provides professional legal assistance to UK employers throughout the sponsor licence process – from application and document preparation to ongoing compliance management.
Our services include:
- Preparing and submitting sponsor licence applications.
- Conducting pre-licence compliance audits.
- Providing HR and SMS compliance training.
- Managing licence renewals and Home Office inspections.
As an IAA-regulated (Level 3) UK immigration firm (rebranded from OISC in early 2025), LawSentis ensures your business meets all Home Office requirements for lawful sponsorship and long-term compliance.
Contact LawSentis today to book a consultation or visit our pricing page to learn more about our employer sponsorship services.