The Home Office made a surprise announcement on 25 January on the Sponsor Management System Message Board regarding the automation of sponsor licence renewals and scrapping of the licence renewal fees, from 6 April 2024. The automation is part of the Home Office’s drive to digitise systems and should ease the administrative process for Sponsors. Higher civil penalties for illegal working are also coming into force from 13 February 2024.
Automatic renewal of sponsor licence
Sponsor licences which expire after 6 April 2024, will automatically be extended without charge, for a period of 10 years. Sponsors will not be required to take any action to renew their licence on the Sponsor Management System (SMS).
Please note, for licences expiring before 6 April 2024, Sponsors will still be required to request the renewal of the licence on the SMS and to pay the renewal fee of £536 (for small organisations as per the definition set out in the Companies Act), or,£1476 for medium/large organisations. Once approved, the Home Office will renew the sponsor licence for 10 years.
For Student Sponsors, the licence expiry date will be extended to 10 years, but they must still do an annual Basic Compliance Assessment to retain their student sponsor status.
Automatic renewal of annual allocation of Certificates of Sponsorship
Since June 2023, the Home Office has fully automated the annual allocation of Certificates of Sponsorship (COS) for A-Rated Sponsors; the same number of certificates will be granted, as assigned by the Sponsor from their previous annual allocation.
However, the automation has not been rolled out to the following Global Business Mobility Routes: – UK Expansion Worker, – Service Supplier, – Secondment Worker, and – Seasonal Worker. So, Sponsors with these types of licence still need to apply annually for an annual COS allocation. The same applies for Sponsors of Student and Child Students, who will have to apply annually for their Certificate of Acceptance (CAS) allocation.
If Sponsors require an increase in their granted allocation, a request for additional certificates can still be submitted via the SMS and, if urgently required, the Priority service is available at a fee of £200. However, please note there is no paid for expedited priority service for CAS allocation requests like there is for Worker Sponsors and COS allocations. The Home Office just say they prioritise CAS allocation requests and aim to complete these as quickly as possible but “the published service standard for all licence maintenance requests is 18 weeks”.
Higher Civil Penalties for illegal working from 13 February 2024
The Home office has also published a new code on Illegal working penalties: codes of practice for employers – GOV.UK (www.gov.uk). As previously reported, civil penalties will increase from £20,000 to £45,000 (for the first breach) or £60,000 (for repeat breaches), and this will take effect on 13 February 2024.
What does this mean going forward?
We recommend checking your sponsor licence expiry date on the SMS, to take the necessary steps to renew your licence, if it expires before 6 April 2024.
It is a positive change for sponsors and prospective sponsors that the life span of the sponsor licence is being increased from four to 10 years and that the renewal fee is being removed from 6 April.
Whilst businesses may view this significant update as good news, we would highlight that:
- This increases the risk of inadvertent complacency
Essentially, the need for annual COS allocation requests or Sponsor Licence renewal requests (every four years) allowed the relevant personnel within the business to check for any mandatory reporting and/or general maintenance on the SMS to be carried out. In absence of these regular reminders, the business will still need to ensure it remains up to date with its awareness and compliance of ongoing sponsor duties.
- The Home Office is likely to increase their efforts in scrutinising UK sponsors
Further resources and efforts are most likely to be directed to sponsor compliance, with a potential increase in the frequency of announced/unannounced compliance visits (whether in person or virtually).
We recommend that the business still carries out regular “health check” compliance exercises, in terms of its HR systems and overall sponsor compliance duties and obligations (at least on an annual basis).
It is now more important than ever for employers to complete the appropriate Right to Work Checks. For information on how Doyle Clayton can support you with training and Mock-Audits, to ensure the business is ready for unannounced Home Office visits and not at risk of losing its Sponsor Licence, or if you require further information, please contact Anita de Atouguia, Partner & Head of Immigration, or Alfreda Joubert, Partner, from our UK member’s Immigration team.