Where an organisation has a Tier 2 Sponsor Licence to employ non-EEA workers they have a responsibility to report to the Home Office when certain events occur. Examples include where the organisation moves premises, changes its name, or there is a merger, takeover, de-merger or, more generally, any transaction where there is a change of ownership.

Even though we are approaching the 10-year anniversary of the introduction of Tier 2, there continues to be a lot of confusion and misunderstanding regarding the sponsor licence reporting process, especially in relation to transactions. With strict deadlines for reporting (20 days from the date the event occurs) it is critical to understand the events that need to be reported, and any additional actions you must complete.

Preparation in advance of a transaction is key – if you only start assessing the necessary actions once a transaction has completed it is usually too late and there is a risk that the deadline will be missed. This could jeopardise the immigration status of any sponsored employees and your ability to sponsor employees in the future.

The questions you need to ask to determine necessary actions are:

  1. What type of transaction is taking place – is it a merger, acquisition, demerger, share sale?
  2. What entities are involved and do they currently have a Tier 2 sponsor licence?
  3. Will there be a change in the direct ownership of the sponsor licence entity, or will the change in ownership be higher up the chain?
  4. Will TUPE apply?
  5. Who are the Tier 2 visa holders impacted by the transaction?
  6. Will there be secondary changes now or in the future that need to be reported, for example will there be a change to the name or location of the organisation?

Depending on the responses to these questions the necessary actions in relation to the organisation could be as simple as a short report to the Home Office, or as complex as needing to apply for a new Tier 2 sponsor licence. In respect of each employee with a Tier 2 visa, again it may be as simple as a short report to the Home Office or as complex as each employee needing to apply for a new visa (which they may not be eligible for).

In addition, a new right to work check needs to be completed for any employee who TUPE transfers into your organisation.

Given the complexities in identifying the necessary actions, the strict timeframes with which to comply, and the negative impact of making an error, it is critical to think about immigration early on in the corporate deal.

A final point to consider is that, if the transaction includes operations outside the UK, similar immigration compliance actions may be required in each location, adding to the overall complexity and risk position.