Sponsor licence revoked?

If an organisation with a sponsor licence does not meet the various compliance duties as required under the Immigration Rules, the Home Office has powers to take enforcement action.

Where serious compliance breaches are alleged, the Home Office may send a notification letter stating that the organisation’s sponsor licence has been revoked or suspended pending further investigation. This can have far-reaching consequences for both the employer and their sponsored workers.

In this guide for sponsor licence holders, we explain what a sponsor licence revocation is, the implications for your organisation and what action you can take if you’re facing a revoked sponsor licence.

What does a revoked sponsor licence mean?

When sponsoring migrant workers, any failure to comply with your sponsor duties can put you at risk of losing your licence and the loss of valuable members of your workforce.

If your sponsor licence is revoked, this means that the Home Office has made the decision to remove your ability to sponsor migrant workers due to serious compliance concerns. In some cases, your licence can be revoked immediately and without warning while, in others, the Home Office may first suspend your licence pending the outcome of investigations.

If a decision has been made to revoke your sponsor licence, either immediately or following a period of suspension, it will be revoked in all of the routes in which you are licensed.

This means that you will no longer be allowed to sponsor any more workers. Any CoS that you have assigned automatically will become invalid. As a result, any application for entry clearance made on the basis of those CoS will automatically be refused. Your details will also be removed from the online public register of Worker and Temporary Worker sponsors. Any sponsored workers that you employ in the UK under the licence will have to leave their job at your company, and leave the UK within 60 days or by their visa expiry date if sooner, unless they can make a new, successful visa application to stay in the UK within the timeframe.

The impact of losing a sponsorship licence would for most companies be business-critical. With the resident labour market falling short in skilled talent across many sectors, sponsoring skilled migrant workers has for many organisations become essential in remaining competitive and even operational.

How does a revoked sponsor licence impact your sponsored workers?

The impact of having your sponsor licence revoked is not limited to losing your right to sponsor new migrant workers moving forward. The Home Office will normally cancel the permission of any existing migrant workers that you are sponsoring, resulting in the loss of these individuals from your workforce.

From the date of revocation, any such worker will have 60 calendar days to leave the UK, find sponsorship from an alternative employer or make a new visa application under a different visa category.

If there is less than 60 days remaining on their existing grant of leave, their visa will be limited to that length of time.

If the worker is able to find alternative employment, they will need to submit a new visa application under their new employer’s sponsor licence.

If a migrant worker is part of the reason why your licence has been revoked, for example, where you have continued to employ them once their visa has expired, their leave will be withdrawn and they will have to immediately leave the UK or face enforced removal.

In the event that the worker knew that their employer was in breach of the sponsor licence rules and duties, they will not be given a 60-day grace period to leave the country or make alternative arrangements and their leave to remain in the UK will be curtailed immediately.

Revocation of a sponsor licence will also result in any pending visa applications under that sponsor licence being deemed invalid.

Therefore, any sponsored workers in the process of applying for their visa, such as the Skilled Worker visa, will not be granted a visa if their employer (or potential employer) has its sponsor licence revoked during the application process. Such workers will not necessarily be informed of the revocation by the Home Office and will not have the 60-day grace period to leave the country or find alternative arrangements.

Any sponsored worker who is required to leave the country but does not do so within the 60-day period may be detained and removed from the country. Any application to return following this will be unsuccessful for a period of ten years.

Why are sponsor licences revoked?

Sponsor licence-holders are faced with a complex list of conditions and rules with which they must comply for the duration of their licence’s four-year validity. Failure to do so may result in the Home Office suspending or even revoking the sponsor licence.

Revocation of the sponsor licence equates to its immediate cancellation. Suspension of the sponsor licence is a temporary measure put in place while the Home Office makes further enquiries of third parties, such as HMRC, and the employer itself. The reinstatement of the sponsor licence, its downgrading or its revocation will be decided once this enquiry process has been completed.

In addition to the revocation or suspension of the sponsor licence, the employer may incur fines for its actions or inactions. The amount of these will vary depending on the situation, but the employment of illegal workers can result in substantial financial penalties.

Common grounds for revoking sponsor licences

Sponsor licence revocation typically occurs because the Home Office believes that your organisation is failing to meet its obligations and duties as a sponsor licence-holder. Common grounds as to why the UK Home Office proceeds to revoke a sponsor licence include:

where you cease to meet the relevant requirements of the immigration route(s) in which you are currently licensed
where there is evidence of a serious and/or systematic breach of your sponsor duties
where you are deemed to pose a threat to immigration control
where you have been convicted of a relevant immigration or a serious criminal offence, or have been issued with a specified civil penalty for illegally employing migrant workers
where you are engaging or have engaged in behaviour and/or actions that are not deemed to be conducive to the public good, for example, where you have discriminated against individuals on the basis of either their sex, age, disability, race, religion or belief.

In practical terms, allegations of non-compliance can result from the licence holder’s failure to:

Check and retain evidence that overseas workers that you wish to recruit have the necessary skills, qualifications and/or professional accreditations to perform their job
Assign Certificates of Sponsorship (CoS) only to workers in eligible roles
Report to the Home Office if sponsored workers are failing to comply with the conditions of their visa
Keep records of employees’ attendance
Report changes or problems to the Home Office within the required timescale, or at all, for example, reporting if an employee does not start work or stops coming to work, or any changes to your organisation, such as changes to the type of business or its location
Keep up-to-date records of employees’ contact information, together with copies of important documents, such as their passports and right to work information
Monitor employees’ immigration status, ensuring that those with a time-limited right to work in the UK have successfully extended their permission to stay
Keep your key personnel details up to date.

It is not uncommon for these types of concerns to be highlighted when your sponsor licence is due for renewal. For example, following a pre-renewal compliance visit, a decision will be made as to whether your licence rating should be maintained or whether further action is required to re-rate or revoke your sponsor licence. If Home Office compliance officers have any concerns about your actions or behaviour as a sponsor they may downgrade or revoke your licence. Equally, even if an action plan is put in place to enable you to upgrade your licence following any necessary improvements, but you fail to follow all the steps set out within that plan, a decision may then be made to revoke your licence.

If you still need to make additional improvements following an action plan, you may be given another B-rating by the Home Office, but will have to follow a new action plan to upgrade back to an A-rating. However, you can only have two B-ratings in the 4-year validity period of your licence, where your licence must be revoked if the Home Office decides that you still need to make improvements after your second action plan.

When can the Home Office immediately revoke a sponsor licence?

If any of the circumstances as listed in Annex C1 of the online sponsor guidance arise, the Home Office will either immediately revoke your sponsor licence or suspend your licence pending further investigation and/or consideration. The sponsor guidance can be found at GOV.UK. If, following further investigation, one of the grounds in Annex C1 is established, the Home Office will revoke your licence, as these are ‘mandatory’ grounds of revocation. An example of a mandatory ground is where the Home Office discovers that you knowingly gave false information on or in support of your sponsor licence application or renewal.

If any of the circumstances as listed in Annex C2 or C3 of the sponsor guidance arise, the Home Office will first consider downgrading your licence from an A to a B-rating. However, they may suspend your licence without first downgrading it. This could be where, for example, there has been sustained non-compliance over time, or a number of breaches which are relatively minor in themselves but, when taken together, the totality of these breaches indicate a more serious and/or systematic failing in the context of your duties.

Annex C2 of the sponsor guidance sets out the circumstances in which the Home Office will normally revoke your sponsor licence, while Annex C3 sets out the circumstances in which they may revoke your licence. Generally, your sponsor licence will not be revoked if only one of these circumstances arises, although the Home Office reserves the right to do so, depending on the gravity of the issue involved. The more of these circumstances that are found to be present, the more likely it is that your licence will be revoked.

An example of where the Home Office will normal revoke your licence is if you have failed to comply with any of your key sponsor duties. In contrast, an example of a ground where the Home Office may revoke your licence is where a sponsored worker has not complied with the conditions of their visa, other than conditions relating to employment, and you are found not to have followed any applicable good practice guidance in response.

Have you received a sponsor licence revocation letter?

If you have received notification from UKVI that your sponsor licence is being revoked, you will have a limited timeframe in which to take action and respond. Your next steps will be critical in influencing the outcome of the Home Office enforcement action.

In some cases, however, where there is no option but to accept the revocation decision, your solicitor can help you to prepare for a fresh sponsor licence application once the cooling-off period has passed. In this way, you can help to maximise the prospects of your sponsor licence being reinstated moving forward, putting in place appropriate steps to ensure that any action is not taken against you by the Home Office in the future.

While it is not possible to appeal a revocation decision, judicial review of the decision may be an option, but needs careful consideration. Judicial review is the process whereby the courts consider whether the decisions made by state bodies have been fair, lawful and correct. If the court considers that the decision was not fair, lawful or correct, it may issue a quashing order, which essentially allows the court to remake the decision. Judicial review is an expensive process and there is no guarantee that the sponsor licence will be reinstated at the end of it.

The alternative option is for the employer to wait until the ‘cooling-off period’ has ended and then reapply for a sponsor licence. This is essentially the same as making an initial sponsor licence application although it will be necessary for the applicant to deal with the reasons for the previous revocation.

In any event, organisations should follow these steps to help determine how they should respond to the revocation notice letter.

Step 1: Take advice

If your sponsor licence is revoked, you should immediately seek expert legal advice from an immigration specialist to help review your options. Your solicitor will be able to review the reason(s) for your sponsor licence revocation and determine the best strategy to deal with this, including the possibility of challenging the legality of this Home Office decision.

Step 2: Acknowledge receipt

Your first step should be to acknowledge receipt of the letter.

Proactively engaging with the Home Office throughout the revocation process does, in our experience, work in your favour, and can help to demonstrate a willingness to cooperate and resolve issues. Remain responsive and cooperative throughout the process.

Step 3: Understand the allegations

The next step is to understand the grounds for revocation. The letter of notification will detail the basis on which UKVI has arrived at its decision to proceed to revocation stage.

A sponsor licence can be suspended or revoked for various reasons, usually because of the employer’s failure to comply with the licence-holders’ rules and regulations. Certain actions or inactions will result in compulsory suspension or revocation, while others are at the Home Office’s discretion.

Immediate revocation may occur where there are allegations of serious breaches of the UK immigration rules and the employer’s prevention of illegal working duties, including:

Submitting false information on the sponsor licence application
Illegal employment of workers
Failure to provide documentation requested by the Home Office
A Certificate of Sponsorship being used incorrectly or completed incorrectly
Consistently poor record-keeping

A lesser penalty of a licence suspension may be imposed, for example, where the employer has:

Not paid a sponsored worker an appropriate salary per the visa requirements
Made cash payments to a sponsored worker
Not cooperated with UK Visas and Immigration on an inspection visit

The grounds stated in the notification letter should help to shape your response.

For example, if you can identify that UKVI’s grounds are based on an error of fact, you will need to compile sufficient evidence to support correction of that factual error.

Step 4: Devise your response strategy

Gather together all relevant personnel involved in the management of the sponsor licence to discuss and confirm the position of the company in light of the alleged breach(es). Discuss the grounds for revocation, the desired outcome and address any compliance issues.

Depending on the alleged breach(es) and the wider circumstances of your case, it may be possible to seek a temporary downgrading of your licence which would permit existing sponsored workers to continue to be employed by you in the UK.

In some cases, the breach may be so severe that the Home Office has acted reasonably.

In other cases, it may be appropriate to build a case to demonstrate that the revoked sponsor licence would have wider implications rendering the revocation a disproportionate measure. Consider the revocation in context. In addition to providing documentary evidence, your response should where possible demonstrate the wider economic impact of a revoked sponsor licence, such as redundancies beyond the affected sponsored workers. For one client, we successfully illustrated in our response to the Home Office that loss of the sponsor licence would result in the company losing a substantial business contract – the result of which would be redundancies affecting more than the sponsored workers.

You will need to act fast to agree the response to UKVI, assigning responsibilities for action points and remedial measures. Timescales and ownership must be clearly communicated internally and to the Home Office, in order to convince that issues are being addressed effectively.

Step 5: Gather evidence

Cooperation, accuracy and speed are key in this situation and it is important that an employer discusses the position and agrees a strategy with its relevant staff members and legal advisors as a matter of urgency.

Sourcing relevant and accurate evidence to support your response will be critical. Depending on the size and make-up of your company, this may be a challenging exercise, where documents are owned and maintained within different functions and sites e.g. payroll information. The Home Office will not be interested in internal barriers or difficulties. Indeed these may exacerbate the issues around non-compliance with sponsor licence duties.

Step 7: Remedy the compliance breaches

If the Home Office has raised compliance issues in the revocation notice, these will need to be addressed and rectified as a priority. All measures planned and taken to improve compliance should be documented and presented as part of your response to the Home Office.

In the event the revocation is withdrawn, you should still expect to remain under Home Office scrutiny for the foreseeable future. As with any sponsor licence holder, the UKVI reserves a right to undertake a compliance visit to request and inspect corporate documentation as deemed necessary. Expect to be higher up the priority list where there have been prior compliance issues.

Step 7: Await the decision

The Home Office aims to give its decision no later than 20 working days after receiving the response, although there may be some delay if the matter is complicated or third parties, such as HMRC, are involved.

Can you reinstate a revoked sponsor licence?

If a decision is made by the Home Office to revoke your sponsor licence, you will be notified of this decision in writing. There is no right to appeal a revocation decision.

In certain circumstances, you may be able to challenge the legality of the decision made by way of judicial review. However, this is only where it can be argued that the decision to revoke your licence was in some way unlawful, unreasonable or procedurally improper.

Can you apply for a new sponsor licence following revocation?

You cannot appeal if your sponsor licence is revoked, but you can reapply for a new licence. However, you will not be permitted to apply for another sponsor licence until at least 12 months, longer in some scenarios, have passed since the date of revocation.

The cooling off period could be longer where, for example, the revocation of your licence was due to certain civil penalties or criminal convictions. If you do make a licence application before the appropriate cooling-off period has passed, it will be refused. If you apply after the cooling-off period, this will be treated the same as any other application, where you will have to pay the correct fee and send in any supporting documents relevant to the route(s) in which you are applying. However, before re-applying, you must show that you have addressed any reasons why your previous licence was revoked.

How can you avoid having your sponsor licence revoked?

In serious cases, your sponsor licence may be revoked immediately and without warning. However, in others, a decision may first be made to suspend your licence pending further investigations. This means that you have been given an opportunity to put right any errors or omissions that have led to your suspension as a sponsor. As such, you should:

immediately instruct an experienced immigration solicitor who can help you to navigate the process of having your sponsor licence suspension lifted
acknowledge receipt of the notice of suspension from the Home Office, ideally via your solicitor, where it is important to respond in a cooperative and timely manner
carefully consider the reason(s) given by the Home Office for your sponsor licence suspension and address each one in writing when responding to the notice of suspension
where any gaps have been identified in your reporting, record-keeping or HR processes, these should be rectified immediately.

You will have 20 days to challenge the suspension of your sponsor licence, where it is essential that you respond to each of the reasons for your sponsor licence suspension, explaining, where applicable, what measures have been taken to rectify any issues. Any supporting evidence that you can provide will also go a long way toward demonstrating, where relevant, that you are now compliant. The Home Office will then review your written submission and make a decision to either revoke, downgrade or reinstate your licence.

However, the best way to avoid having your sponsor licence suspended in the first place, and potentially revoked, is to ensure that you fully understand all of your sponsor duties and that you comply with these duties at all times. Sponsorship is a privilege not a right, where the sponsorship system reflects that those who benefit directly from migration, including employers, should play their part in ensuring that the immigration system is not abused and that vulnerable migrants workers are not exploited. Significant trust is placed in you as a sponsor, where you must ensure that you comply with UK immigration law and that you do not behave in a way that is not conducive to the wider public good.

Why it pays to avoid a revoked sponsor licence

Revocation can have serious consequences for the business and for current sponsored workers and needs to be dealt with as soon as possible.

If your sponsor licence is revoked, you will not be allowed to recruit or employ non-UK resident workers under the sponsor licence, regardless of the visa category. Revocation results in the employer being taken off the register of sponsors. This means that the employer cannot sponsor new workers and can no longer continue to employ its current sponsored workers.

An employer which has had its sponsor licence revoked cannot reapply for another sponsor licence for a specified period (the ‘cooling off period’), which is 12 months from the date of revocation.

Revocation of a sponsor licence can have serious adverse repercussions for an employer’s business, which could suddenly lose a large proportion of its workforce. This is likely to affect productivity and possibly any competitive advantage that the business has. In addition, the employer’s reputation and the morale of employees are likely to suffer. The finances of the business could also be affected as a result of the imposition of fines on the employer by the Home Office.

At the earliest point, it is recommended that you seek legal advice on how you approach the revocation, by for example remedying breaches in compliance and negotiating a licence downgrading, and how to respond most effectively to the Home Office.