The UKBA first introduced the sponsorship licence scheme back in November 2008. The scheme allows eligible companies to sponsor migrant workers. All Tier 2 sponsorship licences granted by UKBA are valid for an initial period of four years. The first renewal period is now upon us and we set out below some guidance on how to prepare your renewal. If sponsors do not renew their licences, those sponsors will be unable to sponsor new non-EU workers.

A recent Court of Appeal ruling highlights the need for Tier 2 sponsor licence holders to ensure their compliance with the sponsorship scheme. The case of Capital Care Services UK Ltd v. Secretary of State for the Home Department [2012] saw an organisation have its licence revoked on the basis that the business model operated by the organisation was contrary to the requirements of the sponsorship licence scheme. In addition, UKBA stripped London Metropolitan University of its licence after finding the institution in breach of immigration requirements. To ensure you are compliant and your renewal application is successful, you should review your own business model to identify any inconsistencies with the “Policy guidance for Tier 2 and Tier 5 sponsors”.

Further, there has been a recent surge in compliance visits from the UKBA, both announced and unannounced. The visits aim to evaluate the sponsor’s compliance with immigration laws and prevent illegal working. In anticipation of a compliance visit, your company’s HR systems must be up to date and robust and have all the relevant information readily available for the compliance office to review. Any deficiencies in the company’s compliance could lead to severe and far-reaching consequences. The UKBA has the power to impose fines of up to £10,000 for each illegal worker.

Top tips

An organisation must be aware of the exact date for renewal. If you fail to submit your renewal application before the expiry date, your licence will lapse automatically. If your licence expires you will have to make a fresh application for a new sponsor licence.

It is important to ensure your business’ registered details on the Sponsorship Management System (SMS) are accurate and updated when and where necessary. You can use the “Sponsor Summary” function to view the registered details. You should receive reminders from the UKBA to renew your licence, but where the business’ details are no longer accurate these reminders may not reach you.

It is advisable for organisations to carry out an HR review to ensure compliance with the applicable UKBA record-keeping and reporting duties. The business should carry out the correct “right to work” checks referring to the UKBA “Guidance for employers on preventing illegal working”. You should carry out the checks on all employees, regardless of nationality, and the company should keep up-to-date personnel records for each employee.

The company must have appointed at least one level 1 user, who is responsible for assigning certificates of sponsorship within the organisation. It is usual that the level 1 user is a settled worker (usually either an EEA citizen or a non-EEA citizen with permanent residency) as level 1 users cannot assign certificates of sponsorship to themselves or to close family members.

The renewal process

Where the company details have not changed, the renewal process is relatively simple. The renewal fee of £1,500 (£500 for smaller businesses) for Tier 2 is paid at the time the application is submitted and no supporting documents are required at this initial stage.

Once the application has been submitted and accepted by UKBA for processing, the licence expiry date will be temporarily extended to allow UKBA to conduct a review of the licence details and previous sponsorship activity.

It is advisable for applications to be submitted a month before the expiry date of the licence, although renewal applications can be submitted through the SMS up to three months before the licence expires.

What to do if you no longer require a licence

You can simply allow the expiry date to pass or use the “Renew Licence” function to decline the renewal.

Once the company’s licence has expired you will no longer be able to operate as a sponsor. Those migrants who are sponsored by you will have their leave curtailed to 60 days.