Updated: 9 October 2026
Holding a UK sponsor licence allows businesses to recruit eligible overseas workers. However, obtaining a sponsor licence is only the beginning. Employers must continue meeting their sponsorship duties throughout the lifetime of their licence.
The Home Office can conduct compliance checks to assess whether an organisation is meeting its responsibilities. These checks may take place before a sponsor licence is granted or after a business has started sponsoring workers.
Importantly, Home Office compliance visits can take place without advance warning.
For employers, the consequences of serious non-compliance can be significant, including licence suspension or revocation.
With important changes to sponsor guidance and right to work requirements during 2026, businesses should ensure their HR systems, reporting procedures and record-keeping arrangements remain compliant.
What is a Home Office sponsor licence compliance visit?
A sponsor licence compliance visit is an assessment carried out by the Home Office to establish whether an employer meets the requirements of the UK’s sponsorship system.
Home Office officers may examine an organisation’s recruitment practices, HR records, sponsored workers’ employment arrangements and systems for monitoring and reporting relevant changes.
Compliance checks may take place:
- Before a sponsor licence is granted.
- After a business has obtained its sponsor licence.
- Where the Home Office has concerns about an organisation’s compliance.
- As part of the Home Office’s ongoing monitoring of licensed sponsors.
A business should not assume that a compliance visit means it has done something wrong.
Can the Home Office visit without warning?
Yes. Home Office sponsor compliance visits can be announced or unannounced.
Employers should therefore maintain appropriate records and monitoring systems throughout the year rather than preparing only when an inspection is scheduled.
Depending on the circumstances, the Home Office may also conduct digital compliance checks or request documents and information remotely.
Sponsors are expected to cooperate with Home Office compliance activity.
Failure to cooperate with a compliance check can itself result in action against a sponsor licence.
What will the Home Office check during a compliance visit?
The precise scope of a compliance visit will depend on the organisation and the matters being examined.
However, several areas are particularly important.
1. Right to work checks, including the October 2026 changes
Employers must conduct appropriate right to work checks in accordance with the applicable legislation and Home Office guidance.
Licensed sponsors also have a separate responsibility to ensure that the workers they sponsor have the necessary immigration permission to undertake their sponsored employment.
This distinction is important because statutory right to work obligations and sponsor licence duties are not identical.
From 1 October 2026, the statutory right to work scheme was extended beyond traditional employment relationships to certain additional working arrangements.
The changes are particularly relevant to businesses using individual contractors, subcontractors or workers engaged through online matching platforms.
Businesses using agency labour or other third-party working arrangements should also review whether the extended statutory scheme applies to their contractual arrangements.
The extended regime can expose businesses falling within its scope to civil penalties for illegal working, with penalties potentially reaching £60,000 per illegal worker.
However, liability depends on the applicable statutory provisions and the particular working arrangement. Businesses should not assume that every contractor or agency arrangement automatically creates liability for every organisation in the contractual chain.
The changes also include transitional provisions concerning arrangements already in existence before commencement. Employers should check whether those provisions apply rather than assuming that all existing arrangements are automatically subject to the new requirements.
Importantly, licensed sponsors must still comply with their separate sponsorship duties, regardless of whether a particular arrangement falls within the extended statutory right to work scheme.
2. Sponsored worker records
Licensed sponsors must retain the documents and information required by the relevant Home Office guidance, including Appendix D.
These may include:
- Evidence of appropriate right to work checks.
- Relevant recruitment records.
- Sponsored workers’ contact details.
- Employment contracts and job descriptions.
- Salary and payroll information.
- Records relevant to attendance and absences.
Under Appendix D, sponsored worker records must generally 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 examines and approves the records.
Different or longer retention requirements may apply to particular documents under other legal obligations.
For example, records retained for the statutory right to work scheme may be subject to separate retention requirements.
Employers must also retain documents provided as part of their original sponsor licence application for as long as they hold the licence.
Businesses should ensure that records are accurate, accessible and retained for the appropriate period.
3. Salary and working arrangements
The Home Office may examine whether sponsored workers are being paid appropriately and whether their actual employment arrangements are consistent with their sponsorship.
Relevant evidence may include:
- Employment contracts.
- Payslips and payroll records.
- Working hours.
- Job descriptions.
- The duties actually being performed.
Employers should ensure that salary and employment arrangements continue to satisfy the requirements applicable to the worker’s sponsored role.
Changes in salary, duties or working arrangements may trigger reporting obligations or require further immigration action.
4. Absence monitoring and reporting duties
Licensed sponsors must have appropriate systems for monitoring sponsored workers and reporting relevant events.
Certain worker-related changes must generally be reported through the Sponsorship Management System (SMS) within 10 working days.
Specified organisational changes generally have a 20-working-day reporting deadline.
For example, where a sponsored worker is absent from work without permission for more than ten consecutive working days, this is a reportable event.
The sponsor must generally report the absence within ten working days after the tenth day of absence.
Certain organisational changes, including changes of ownership, may also need to be reported, and some circumstances may require a fresh sponsor licence application.
Importantly, not every absence or employment change automatically requires an SMS report.
Employers should identify the reporting requirements and deadlines applicable to each particular event.
5. HR systems and staff responsibilities
The Home Office may assess whether an organisation has suitable systems and personnel to fulfil its sponsorship duties.
This includes whether the individuals responsible for sponsorship understand their obligations and whether the organisation can demonstrate that its procedures operate effectively in practice.
Simply having written policies may not be sufficient if those policies are not being followed.
Employers should ensure that relevant staff understand their responsibilities and that important records can be located when required.
6. Whether sponsored workers are undertaking eligible roles
The Home Office may examine whether a sponsored worker is genuinely undertaking an eligible role that corresponds with the occupation code, job description and other information supplied when the Certificate of Sponsorship was assigned.
Employers should ensure that the duties actually performed by sponsored workers are consistent with the roles for which they have been sponsored.
Businesses should regularly review job descriptions, occupation codes and actual working arrangements to ensure continued compliance with the applicable sponsorship requirements.
Can Home Office officers interview sponsored workers?
Yes.
Compliance checks may include interviews with sponsored workers and relevant members of staff.
Officers may seek to establish whether workers understand their employment arrangements and whether their actual duties, salary and working conditions correspond with the information supplied to the Home Office.
Employers should ensure that sponsorship records accurately reflect the reality of their working arrangements.
What happens if a business fails a compliance visit?
The outcome depends on the nature and seriousness of any concerns identified.
The Home Office has a range of possible compliance measures, including:
- Downgrading a sponsor licence rating where applicable.
- Restricting the allocation or assignment of Certificates of Sponsorship.
- Suspending a sponsor licence while concerns are investigated.
- Revoking a sponsor licence.
- Taking or referring matters for further enforcement action where appropriate.
Not every compliance issue results in revocation.
However, some breaches are sufficiently serious to justify revocation, and employers should not assume that they will always be given an opportunity to correct problems first.
The consequences may extend beyond the business itself, particularly where sponsored workers’ immigration permission depends upon the organisation continuing to hold its licence.
What happens if a sponsor licence is downgraded to a B-rating?
Where the Home Office downgrades an eligible sponsor to a B-rating, the organisation must follow an action plan designed to address identified compliance concerns.
Under the current Home Office fee schedule, the action plan costs £1,579.
The sponsor must normally pay the fee within 10 working days of being notified of the downgrade.
Action plans run for a fixed period of three months.
During this period, the sponsor generally cannot assign Certificates of Sponsorship to new workers. Limited exceptions may apply to existing sponsored workers who need to extend their immigration permission.
If the sponsor fails to pay the action plan fee or fails to make the required improvements, the Home Office may revoke the licence.
A B-rating should therefore be treated as a serious compliance matter rather than simply an administrative warning.
How can employers prepare for a Home Office compliance visit?
Preparation should be an ongoing process.
Employers may benefit from conducting periodic internal reviews covering:
- Right to work checks and record retention.
- Sponsored workers’ immigration status.
- Recruitment records and job descriptions.
- Salary, payroll and working arrangements.
- Absence monitoring.
- SMS reporting.
- Key personnel and SMS user access.
- Organisational changes that may require reporting.
Businesses using contractors, agency labour or platform-based workers should also review whether the October 2026 right to work changes affect their arrangements.
An internal compliance review can help identify weaknesses before they develop into more serious problems.
Why is sponsor licence compliance particularly important in 2026?
The Home Office has made several important changes to sponsor guidance during 2026.
Part 3 of the sponsor guidance, which deals with sponsor duties and compliance, was updated with effect from 28 August 2026.
Part 2 of the sponsor guidance was subsequently updated on 8 October 2026, reflecting changes to the Immigration Rules and the right to work scheme.
Appendix D was also updated on 8 October 2026, including changes concerning the extension of right to work requirements and record-keeping obligations affecting Religious Worker sponsors.
These developments reinforce the importance of regularly reviewing the latest published Home Office guidance.
Employers should avoid relying solely on procedures established when their sponsor licence was first granted.
How Atwal Law can help
Atwal Law provides immigration advice and assistance to businesses holding or applying for Home Office sponsor licences.
We can assist employers with understanding their sponsorship obligations, reviewing compliance arrangements and addressing immigration-related concerns.
Through our Atwal Shield employer support initiative, we also aim to help organisations take a more structured and proactive approach to sponsor licence compliance.
Whether you are a small business employing your first sponsored worker or an established organisation with a larger sponsored workforce, understanding your responsibilities is essential.
Frequently Asked Questions
Can the Home Office visit my business without an appointment?
Yes. Home Office compliance visits may be announced or unannounced.
Can the Home Office suspend a sponsor licence?
Yes. The Home Office may suspend a sponsor licence while investigating compliance concerns.
Will a failed compliance visit automatically lead to revocation?
Not necessarily. The outcome depends on the nature of the breach, the circumstances and the applicable Home Office guidance.
However, some serious breaches can result in revocation without a prior suspension or opportunity to remedy the issue.
Does the Home Office check sponsored workers’ salaries?
Yes. Salary and employment arrangements are important areas of sponsor compliance.
The Home Office may examine payroll records and other information, including relevant HMRC data, when assessing whether sponsored workers are being paid appropriately.
How long must sponsors keep worker records?
Under Appendix D, sponsored worker records must generally be retained throughout sponsorship and until the earlier of one year after sponsorship ends or the date a Home Office compliance officer examines and approves the records.
Other legal obligations may require certain documents to be kept for longer.
Can the October 2026 right to work changes affect contractors?
Yes. The changes extend the statutory right to work regime to certain working arrangements beyond traditional employment.
Businesses engaging contractors, subcontractors or platform-based workers should review whether the new requirements apply to their particular arrangements.
How much does a sponsor licence B-rating action plan cost?
The Home Office currently lists the action plan fee as £1,579.
The fee must normally be paid within ten working days of notification of the downgrade.
Should small businesses prepare for compliance visits?
Yes. Sponsor duties apply to licensed sponsors regardless of the size of their business.
However, the appropriate systems and procedures may vary depending on the organisation’s structure and circumstances.
Need Help With Sponsor Licence Compliance?
Atwal Law provides immigration advice and sponsor licence assistance to businesses in Coventry, Birmingham, London and across the UK.
If you are concerned about your sponsorship duties, preparing for a Home Office compliance visit or reviewing your existing systems, contact Atwal Law to discuss your circumstances.
Atwal Law | UK Immigration Lawyers
This article provides general information only and does not constitute legal advice. Sponsor requirements and Home Office guidance may change, and the appropriate action depends upon an organisation’s individual circumstances.