Multiple documents within the sponsor guidance for work routes were updated on 31 December 2024 and 1 January 2025 to deliver  on the Government’s promise to ‘minimise abuse of the visa and immigration system by unscrupulous employers’. Sponsor licence holders can expect more changes in 2025. 

Ban on recovering certain costs from Skilled Workers

Sponsor licence holders can no longer recoup sponsorship-related fees from Skilled Workers. This currently applies to the Certificate of Sponsorship (CoS) fee and a Skilled Worker sponsor licence application fee (as well as any associated costs). You can read more about this in our article UK Government bans sponsors from passing on specific sponsorship costs to Skilled Workers.

We expect this prohibition to be expanded across other sponsored routes soon. 

The impact of this change is compounded by the Home Office’s recent announcement that the CoS fee may increase from £239 to £525. The change is subject to a change in legislation, which is due to take place in Spring 2025. Read more about proposed fee increases in our article Home Office warns of intended rise to application fees.

Ban on sponsoring workers in a personal capacity

The updated guidance confirms that a Skilled Worker licence is strictly for legitimate business purposes and cannot be used to sponsor individuals to work in a personal capacity. ‘Working in a personal capacity’ includes:

• Being employed or engaged by an individual or household who isn’t conducting business or providing a service in the UK; or
• Being employed or engaged for the personal benefit of an individual who works for your organisation, or a close relative or partner of that individual, where the role is unrelated to your organisation’s wider activities

If a sponsor applies for a licence to sponsor a person in a personal capacity, it will be refused. If a sponsor uses the licence to assign a CoS to a worker in a personal capacity, they risk having their licence revoked. If a sponsor has previously been permitted to sponsor workers in a personal capacity, they must not assign any further CoS to sponsor workers on this basis.

An exception applies to diplomatic households, where sponsors can apply through the International Agreement route. 

New Level 1 User requirements and transitional arrangements

A Level 1 User is a person who has access to an organisation’s sponsor licence. They can carry out important functions such as assigning a CoS, maintaining User and company details details and making reports to the Home Office.

The previous guidance required a Level 1 User to be an employee, a partner or a director of the organisation. There was also a requirement to have a minimum of one Level 1 User who was a ‘settled worker’. There was flexibility to appoint one person to fulfil each requirement.

For sponsor licences applied for on or after 31 December 2024, there are new rules clarifying who can act as a Level 1 User. At least one Level 1 user must be:

• An employee, a director or a partner within your organisation; and
• A settled worker.

If you fail to nominate a Level 1 User who meets both requirements, your sponsor licence application may be refused.

Transitional arrangements are in place for sponsors with a licence that was applied for before 31 December 2024. If this applies to your business, you can continue to have one person fulfil each requirement, but the Home Office suggests this may change in the future and that you should consider appointing at least one Level 1 User who meets both requirements. 

Other, smaller changes 

• Widened definition of ‘you’ or your’. This now includes a person listed on Companies House as a Person with Significant Control (PSC). It has the effect of expanding who is responsible for the sponsor licence and compliance. 
• Restructured section on Key Personnel. This now includes greater clarity on who can act as in a certain position on the licence. Check that each person listed on your licence is eligible to act. 
• Changes to User types for Government Authorised Exchange (GAE) scheme sponsors: The new ‘Sponsor UK’ system (which replaces the Sponsor Management System) does not include Level 2 Users. This means that staff from employers hosting a GAE scheme participant will not have system access – only the overarching GAE scheme administrator will.

Compliance checklist 

Here’s a handy checklist to help you comply with the changes. 

1. Review your immigration policy and any related employment policies that refer to passing on sponsorship fees and other immigration-related costs to workers. Check and amend any documents such as employment contracts (including side letters) and consider how your immigration budget is impacted.
2. Check if your organisation is sponsoring anyone in a personal capacity. If you are, seek employment and immigration advice as soon as possible.
3. Log into the Sponsor Management System and check:
   • If you have an existing Level 1 User who meets the new eligibility requirements. If not, consider if it is appropriate to appoint a new Level 1 User who meets both requirements.
   • That your existing Level 1 Users continue to meet the eligibility and suitability requirements, which are now clearly set out in the restructured Key Personnel section of the guidance.
   • That your Level 1 and Level 2 Users are active users. Deactivate inactive users.
4. Notify anyone who is a PSC that they have responsibilities under the sponsor guidance. Sending them a link to the sponsor guidance may be quite overwhelming, especially if they are new to the world of visa sponsorship! Ask us about our user-friendly resources, which deliver essential information, in bitesize. More on this below.
5. Complete an internal audit of your HR systems and sponsor licence administration practices and make any necessary changes.

Need some more help?

Please get in touch with your usual Lewis Silkin immigration team contact to ask about our employer-friendly Sponsor Compliance Guide. We can also assist with training your team or checking your compliance using our mock audit service.