On 31 December 2024, the Home Office updated its Workers and Temporary Workers – Guidance for Sponsors, introducing changes and clarifications for businesses applying for a sponsor licence. Here’s what you need to know:

1. New rules on recovering sponsorship fees from Skilled Workers

Previously employers have attempted to recover some of these costs from their sponsored workers by using clawback clauses in employment contracts, or by charging workers upfront for sponsoring them.

Due to the government’s concern that this practice has led to the exploitation and unfair treatment of staff, leaving individuals in debt to their employers especially in the care sector, a new paragraph has been added to the guidance which expressly states that sponsors are responsible for paying the sponsorship fees listed in the guidance:

• The Skilled Worker sponsor licence application fee (as well as any associated costs)
• The Certificate of Sponsorship fee for a Skilled Worker, where that Certificate was assigned on or after 31 December 2024.
• The Immigration Skills Charge for a Skilled Worker or a Senior or Specialist Worker, where the employer is required to pay this.

If the business attempts to recover these fees, they risk immediate licence revocation. Employers should urgently review policies to ensure compliance.

2. Changes to key personnel requirements

When an employer applies for a sponsorship licence it must nominate certain people to manage the sponsor licence, and are referred to as ‘Key Personnel’. The section in the sponsor guidance which covers Key Personnel has been completely revised, and includes the following new requirements:

• Sponsors must not nominate Key Personnel who are prohibited from being a company director (for any reason, including bankruptcy), unless a court has given permission for that individual to act as a director or to promote or form a business and acting as Key Personnel would not contravene that permission.
• New sponsors must have at least one Level 1 user who is:
  • An employee, director or partner in the sponsoring organisation
  • A settled worker.

3. 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, which includes:

• Being employed or engaged by an individual or household who is not conducting a business or providing a service in the UK
• 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 Certificate of Sponsorship 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 Certificates of Sponsorship to sponsor workers on this basis.

Immigration fee increases

The Home Office has stated that it is intending on increasing certain immigration fees, namely the Certificate of Sponsorship fee from £239 to £525 by Spring 2025.

With businesses already barred from passing these costs onto workers, this increase will have direct financial implications for recruitment budgets.

Don’t risk losing your licence

The government is cracking down on non-compliant employers. If you need help applying for a sponsor licence or ensuring compliance with new regulations, we can provide expert support and training. Don’t risk costly mistakes, we’re here to help, get in touch with Rajveer Basra at RajveerBasra@schofieldsweeney.co.uk.