For Coventry businesses that employ overseas workers, obtaining a sponsor licence is only the beginning.
Once a sponsor licence has been granted, the organisation has continuing duties under the Home Office sponsorship system. Failures can lead to compliance action and, depending on the circumstances, may result in the licence being downgraded, suspended or revoked.
For businesses that rely on sponsored workers, losing a sponsor licence can have serious consequences for both the organisation and its employees.
Here are seven important areas every sponsor licence holder should regularly review.
1. Failing to Report Changes to the Home Office
Sponsor licence holders have ongoing reporting duties.
Many changes concerning a sponsored worker must be reported through the Sponsorship Management System (SMS) within 10 working days of the relevant event.
However, employers should not assume that every sponsor reporting deadline is 10 working days. Certain changes relating to the organisation itself, including some changes involving ownership, mergers and takeovers, can carry a 20-working-day deadline.
Examples of worker-related matters that may require reporting include certain changes to a sponsored worker’s employment, changes to their work location and other relevant changes in their circumstances.
Employers should therefore have a clear internal process for identifying changes that may need to be reported and for ensuring the appropriate action is taken within the applicable deadline.
2. Poor Sponsor Licence Record Keeping
Licensed sponsors are required to retain specified documents and information relating to the workers they sponsor.
The precise documents required depend on the worker and the circumstances, but records can include evidence relating to:
- right-to-work checks
- recruitment
- salary and employment
- the sponsored role
- contact details
- attendance and absences
- Certificates of Sponsorship
- other documents required by the Home Office sponsor guidance
The Home Office’s Appendix D sets out specific sponsor record-keeping requirements.
Unless otherwise stated, documents relating to a sponsored worker generally need to be retained throughout the period of sponsorship and until the earlier of one year after sponsorship ends or the date on which a Home Office compliance officer has examined and approved them.
Records can be kept electronically or in paper form, but sponsors must be able to make them available to the Home Office when requested.
3. Failing to Review SMS Users and Key Personnel
Sponsor licence holders should regularly review who has access to their Sponsorship Management System.
This has become particularly important following significant changes introduced in September 2026.
From 9 September 2026, sponsors can no longer appoint new Level 2 Users.
Existing Level 2 Users must be dealt with by 8 March 2027. Broadly, sponsors will need to request Level 1 User access for them, where they are eligible, or deactivate their Level 2 accounts.
The Home Office also began introducing mandatory multi-factor authentication (MFA) for SMS Users from 3 September 2026.
Sponsors should therefore ensure that the personal and contact details recorded for their SMS Users are accurate and up to date.
There are also new rules concerning inactive SMS accounts. An SMS User account is treated as inactive where it has not been accessed for 12 months or more. The Home Office may deactivate inactive accounts if the required action is not taken.
This can become particularly serious if an organisation is left without the active SMS access it needs to manage its sponsor licence.
Employers should therefore regularly check their:
- Authorising Officer
- Key Contact
- Level 1 Users
- remaining Level 2 Users
- SMS contact information
- inactive user accounts
Sponsor licence compliance increasingly includes proper management of the organisation’s digital access to the sponsorship system.
4. Allowing a Sponsored Worker’s Role to Change Without Checking the Immigration Consequences
One of the most important sponsor duties is ensuring that the job a sponsored worker actually performs corresponds with the role for which they were sponsored.
The occupation code and job description stated when the Certificate of Sponsorship was assigned must accurately reflect the role.
If a worker changes to a different role within the same occupation code, it may be possible for the sponsor to continue sponsoring them without an immediate new Certificate of Sponsorship, provided the relevant Home Office requirements are met.
Where such a permitted change takes place during the worker’s existing period of permission, it normally needs to be reported through the SMS within 10 working days.
The position can be very different where the new job falls under a different occupation code.
Unless an exception applies, the worker will normally require a new Certificate of Sponsorship and must make a change-of-employment application before starting the new role.
This is an area employers should take particularly seriously.
The Home Office guidance states that if it discovers that a sponsored worker is working in a role that does not match the occupation code or job description for which the Certificate of Sponsorship was assigned, and the change is not permitted under the sponsor guidance, this is a mandatory ground for revocation of the sponsor licence.
Employers should therefore check the immigration implications before making significant changes to a sponsored worker’s duties, occupation code, salary or role.
5. Failing to Carry Out Follow-Up Right-to-Work Checks Where Required
Right-to-work compliance should form part of an employer’s wider immigration compliance system.
A sponsor must carry out an appropriate right-to-work check before the relevant employment begins.
Where a worker has an unlimited right to work in the UK, an appropriate initial check will generally provide a continuous statutory excuse and a further check is not normally required simply because time has passed.
However, where an employee has time-limited permission to work, an employer will generally need to conduct an appropriate follow-up check on or before the date that permission comes to an end if the employee is going to continue working.
Employers should therefore have systems for identifying workers whose immigration permission is time limited and ensuring appropriate follow-up action is taken before the relevant date.
6. Being Unprepared for a Home Office Compliance Check
Holding a sponsor licence means accepting the possibility that the Home Office may check whether the organisation is complying with its sponsor duties.
Compliance checks can take place through an onsite compliance visit or a digital compliance check.
Home Office compliance officers may examine the organisation’s systems and records and can interview relevant personnel and sponsored workers.
Employers should therefore be able to demonstrate that their sponsor compliance arrangements operate effectively in practice.
Relevant HR staff and managers should understand their responsibilities, required records should be readily available and the organisation should have clear processes for monitoring sponsored workers and reporting relevant changes.
A useful question for every sponsor licence holder is:
If the Home Office carried out a compliance check tomorrow, could we demonstrate that our sponsorship systems are working properly?
If the answer is uncertain, it may be time for a sponsor compliance review.
7. Waiting Until Something Goes Wrong Before Reviewing Compliance
Sponsor licence problems can become considerably more difficult once the Home Office has identified them.
Depending on the nature of a breach, Home Office action can include downgrading, suspension or revocation of the sponsor licence.
Some grounds for revocation are mandatory, and the sponsor guidance makes clear that a breach does not necessarily have to be deliberate or knowingly committed before revocation provisions can apply.
Regular compliance reviews can therefore help identify weaknesses before they develop into more serious problems.
This is particularly important for organisations that:
- sponsor significant numbers of overseas workers
- have several members of staff involved in sponsorship
- operate from multiple locations
- have recently undergone restructuring or organisational changes
- have experienced changes in HR personnel
- have not reviewed their sponsor compliance systems recently
Sponsor Licence Support for Coventry Businesses
Atwal Law provides specialist immigration and sponsor licence advice to businesses in Coventry and across the UK.
We assist employers with matters including:
- Sponsor Licence applications
- Sponsor Licence compliance
- Skilled Worker sponsorship
- Certificates of Sponsorship
- Sponsorship Management System issues
- Key Personnel arrangements
- right-to-work compliance
- Home Office compliance concerns
- immigration support for international employees
Through Atwal Shield, we also provide ongoing immigration and compliance support designed to help organisations manage their sponsorship responsibilities more effectively.
If your Coventry organisation already holds a sponsor licence, or you are considering applying for one, contact Atwal Law to discuss how we can assist.
This article provides general information and should not be treated as legal advice. Sponsor licence requirements depend on the circumstances of the organisation and the individual worker.