Sponsor Licence - Change of Circumstances

For Tier 2 and Tier 5 licensed sponsors, informing the Home Office of any changes in circumstances is a core compliance requirement. If changes relating to the sponsoring business or sponsored employees are not reported in a timely manner, this can lead to a possible downgrading of the sponsor license rating, or if there is sufficient concern, suspension, or revocation of the license altogether. In this article, we will explain the reporting obligations of sponsor license holders and how the Home Office should be informed.

Complying with the Sponsor License Reporting Requirements

As current sponsor license holders will know, merely being granted a license is only the start of the journey. During the lifetime of the sponsor license, the Home Office will insist that you remain compliant at all times with their many rules and obligations and often make unannounced site visits to double-check. The latest sponsor license guidance document runs to over 200 pages, and when this is periodically updated, sponsors must update their processes and systems to accommodate any new compliance requirements. One of the primary requirements is that employers must report any important changes relating to their business or to a sponsored employee; these are referred to as a ‘change of circumstances’.

Sponsor license holder - change of circumstances

It must be remembered that the initial sponsor license is granted on the basis of the answers and information provided at the time the application was first submitted. Business-related changes that happen subsequent to the initial license being granted may mean that, for example, a different type of sponsor license is required (i.e. Tier 2 for long term staff rather than Tier 5 for short term temporary staff). Also, simply changing the type and size of the business may alter the amount of the immigration skills charged for each CoS assign.

The types of business changes which need to be reported include (but are not limited to) changes to the:

• business name;
• business address;
• business type and sector – this may include if you were a large company but now qualify as a small company or have gained charitable status if you were a small company but are now a large company, or you previously held charitable status but have ceased to do so;
• names of the key personnel named on the sponsor licence (these are the people who update the Sponsor Management System – SMS)
• company size
• business structure

Furthermore, the Home Office must be informed via the SMS of key business events such as:

• insolvency - within 20 working days of going into administration or receivership
• entering into a company voluntary arrangement (CVA) or debt arrangement scheme – within 20 working days of this being agreed
• liquidation or sequestration - within 20 working days of ceasing trading
• sole traders entering into an individual voluntary arrangement (IVA) or a debt arrangement scheme (DAS) - within 20 working days
• complete mergers or takeovers – within 20 working days of the change (if the staff is being transferred from one business to another, this must be reported within 20 days of the date they move).
• partial takeovers and de-mergers – changes must be reported via the SMS if the sponsor license is no longer needed, or if some staff is being transferred under TUPE within 20 working days (this should be reported by the business the sponsored staff are moving from, and the business the staff are moving to).
• surrendering the sponsor license – for example, if the business no longer needs to sponsor non-EEA staff members.

In most cases, business-related changes can be entered on the SMS, but if there is no SMS level 1 user in place, a change of circumstances form must be completed in the following circumstances:

• assigning a new level 1 user

• replacing the key contact or authorising officer
• appointing a representative as the level 1 user
• surrendering your licence

Sponsored employee - changes in circumstance

In order to maintain compliance with sponsor license holder’s obligations, any important changes in circumstances relating to sponsored employees must also be reported to the Home Office via the SMS. The following must be reported within ten working days:

• non-attendance on the first day of work – when entering the details into the SMS, any reason must be given for their non-attendance, e.g. a missed flight or illness.
• absence from work without permission for more than ten consecutive days.
• if a sponsored migrant’s contract of, or for, employment or services, or registration with a relevant body, is terminated earlier than shown on their certificate of sponsorship (CoS)
• if the worker is no longer sponsored – e.g. they have obtained Indefinite Leave to Remain or switched to another visa type
• promotion
• change of pay
• change to core duties
• change to the location of employment

In most circumstances, a change of circumstance will not lead to action being taken by the Home Office (e.g. revocation of a CoS). If there are concerns that the sponsor license is not adhering to their obligations, are not reporting in a timely manner, not reporting fully when they should, or continuing to employ a non-EEA worker when they should not, the Home Office may conduct a compliance audit to ensure that the procedures and systems in place are sufficient. If you are concerned that this may happen, or if you have already received notification of a pending compliance review, it is advisable to engage the services of experienced immigration Solicitors who can expediently review your systems and help your business to prepare for a visit from the Home Office.

Final Words

With all aspects of sponsor license management, complacency will put your ability to hire non-EEA staff at risk. Compliance is an ongoing process that requires continuous investment by your business in people, processes, and systems. Every person should know their role, and even in the absence of a member of your key personnel, your SMS reporting should never slip. It is also recommended that you have outside specialists, such as immigration lawyers, conduct regular unplanned compliance audits to make sure you can pass any Home Office visit with flying colours.

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