Applying for a Tier 2 Sponsor Licence – Changes and Why There’s No room for Error

Since the introduction of the Points Based System in 2008 the criteria that have to be met by applicants for a Tier 2 sponsor licence have grown considerably more complex and stringent. New conditions have been added, and the introduction of a ‘genuineness’ requirement has meant that assessment of applications is by its very nature subjective. At the same time the mandatory grounds for refusing an application have expanded and room for discretion by Case Workers in assessing certain aspects of an application have shrunk.  

In parallel to these developments, the removal of the ‘A- and B-rating’ system, and the introduction of a ‘cooling-off period’ – a mandatory gap of 6 months between a refusal of a licence application and submission of a new application - has meant that any failure to meet assessment criteria will result in immediate refusal of an application (rather than an opportunity to remedy) and a long delay in an applicant’s ability to reapply, even where a failure is minor and could be instantly addressed.

Identifying Changes

The rules governing the granting or refusal of Tier 2 Sponsor Licences are contained within Home Office guidance – primarily the Tier 2 and Tier 5 Sponsor Guidance – rather than in primary or secondary legislation or the Immigration Rules.

Since its introduction in 2008 the Tier 2 and 5 Guidance (originally the Tier 2, 4 and 5 Guidance) has been regularly amended and updated – over 30 versions have been published in the last 8 years, and it has expanded in size from 52 to 160 pages. Not infrequently amendments have impacted significantly on licence applications – whether in specifying what information must be submitted in an application, the criteria for assessment, benchmarks for refusal, or the requirements for re-application.

Each new published version highlights changes from the previous version, but with varying levels of clarity and specificity – for example the significant shift of the assessment criterion ‘[does] not yet have in place the processes necessary to comply with [their] duties as a sponsor’ from a circumstance which ‘may’ lead to refusal, to one which ‘must’ lead to refusal was referred to in the summary of changes simply as ‘the annexes at the end of this document have been consolidated and clarified to avoid duplication’.

The Home Office’s Modernised Guidance can be used to flesh out criteria that will be used for assessment, but the published version occasionally lags behind the changes made to the Guidance, and therefore should be cross-checked with care.

Criteria for assessment

From the inception of the Points Based System the Home Office set out three key criteria that they would use as their basis for assessing potential sponsors:

  • Is the applicant a genuine organisation operating lawfully in the United Kingdom?
  • Is the applicant dependable and reliable?
  • Is the applicant capable of carrying out its duties as a sponsor?

These criteria remain in place, but reviewing the changes made to the Guidelines over time shows a shift to an increasingly rigorous and rigid assessment.

Lawfully-operating entity

The first criterion is largely demonstrated by providing the required company documents specified in Appendix A, and this requirement has changed little – other than occasional shifts in the exact documents required. Applicants should be aware that the list of required documents in the online application form does not keep pace with changes to Appendix A, and the latter takes precedence.

Dependability and reliability of key personnel

The second criterion primarily relates to those designated in the application as Key Personnel and to others including the owners, directors or anyone responsible for day-to-day running of the organisation applying, and is assessed by background checks on these individuals. The fundamental requirements have remained unchanged, but applicants – particularly small companies and organisations – are now required to provide details of Directors and owners in the application itself, meaning that checks can be carried out more easily.

Human Resource processes

The third criterion is judged through an assessment of an applicant’s HR processes and operations, made largely during a Home Office assessment visit.

This area has seen the greatest shift to a more rigid approach to assessment.

The Guidance originally set out a 1,2,3 scoring system for HR systems, so that applicants could be assessed as meeting all, some or none of the required criteria. Applicants who didn’t meet all of the criteria could originally be granted a licence with a B-rating, allowing them time to improve their systems or remedy omissions. In April 2014 this was changed. New applicants could no longer be granted a B-rating, but would be refused if they failed to meet the HR system criteria. In addition, a more stringent scoring system was introduced, which simply marked criteria as ‘met’ or ‘not met’.

In combination with the modification in April 2015, flagged up above, which shifted ‘not having processes in place’ from a potential reason for refusal of a sponsor licence application to a mandatory one, this change has meant that even a seemingly minor omission in HR systems and processes, and one which could be immediately put into place, can lead to refusal and a six month wait to re-apply.

Genuine employment

Perhaps the most significant change to the Licence application criteria and process occurred in April 2014 when the Home Office introduced a fourth key criterion:

  • Is the applicant able to offer genuine employment that meets the Tier 2 (General) skill level and appropriate rates of pay?

Applicants are required to provide considerable detail concerning the organisation and its current staffing structure, the roles being recruited to and the recruitment process.

The requirement was expanded upon in the November 2014 Guidance, which set out the definition of a Genuine Vacancy – one that meets the requirements of the tier and category in which the potential sponsor is applying, and does not include dissimilar and/or lower-skilled duties.

The Guidance does not make it explicit as to whether ‘able to offer a genuine vacancy’ should be understood as able at the moment of application i.e currently recruiting to a specific post and with evidence that no suitable resident worker is available, or simply potentially able to offer i.e currently employs, and will be recruiting to roles at the Tier 2 skill level and on appropriate rates of pay. However, case workers appear to be interpreting the Guidance on the former lines, and are rejecting applications from potential sponsors who are not recruiting to a role at that moment, or who have not yet carried out or completed a Resident Labour Market Test.

Rights of appeal and the ‘Cooling-off period’

A decision to refuse to grant a sponsor licence under Tiers 2 & 5 is not (and has never been) subject to any right of appeal to the First-tier Tribunal (Immigration and Asylum Chamber), or to administrative review. The only remedy available is judicial review. This absence of any right of appeal to an independent tribunal has been held to be compliant with Article 6 (right to a fair trial) of the European Convention on Human Rights 1950. The Court of Appeal in R (New London College Ltd) v SSHD confirmed that judicial review was an appropriate and sufficient remedy.

Until November 2014, for the majority of refused applicants the cheapest and simplest approach was simply to reapply rather than to consider the expense of judicial review. Applicants who were refused could apply again at any time, as long as the reasons for the refusal no longer applied. The only exception to this was that if the sponsor had previously been issued with a civil penalty for the maximum amount they could not reapply successfully until six months after the fine was issued.

However, in November 2014 UK Visas & Immigration amended their guidance for sponsors to introduce a “Cooling-off period” following an unsuccessful licence application. Where the “Cooling-off period” applies an organisation or company can only reapply six months after the date of the letter notifying them of the refusal of their application. Applications submitted prior to this period will be refused.

The cooling-off period applies for almost all categories for refusal - from the specific (submitting false documents in support of an application) to the broad (not having the processes necessary to comply with sponsor duties). Perhaps the broadest category is ‘not meet[ing] the requirements to be a sponsor in the category under which you applied’ – although this could be interpreted as covering any aspect of the four key criteria

It is also worth noting that the phraseology used in the Guidance, if read literally, implies that UKVI can apply the Cooling-off period even where they have rejected an application wrongly – the cooling-off period automatically applies where UKVI have “refused [an] application for one or more of the reasons listed”, not where an applicant actually failed to meet one of the required criteria. It may be that UKVI would consider a re-application within 6 months where an applicant could clearly demonstrate that they had been assessed incorrectly as failing to meet certain criteria, however it is also quite possible that such an explanation would never be reviewed and considered as the re-application would fall for automatic refusal for applying during the cooling-off period.

The only specific exceptions to the cooling off period set out in the guidance are where the application was submitted by a representative, rather than the Authorising Officer, or where the applicant did not provide documents, or information requested by a specific deadline, for “reasons outside [their] control”.


Changes to the guidelines for sponsor applicants, and the criteria they must meet, have come thick and fast in the last two years, and some seem to have arrived ‘under the radar’. It is therefore essential that those advising potential licence applicants should scrutinise each new version of the Tier 2 and 5 Guidance in detail to identify changes and their implications for applicants. An awareness of the direction of changes over the past few years can also help in guiding applicants as to the Home Office’s current issues of concern and thus their likely focus.

Getting it right first time round is more essential than ever to avoid costly delays, but ‘getting it right’ is getting harder than ever.