How Much Does a Sponsor Licence Cost? A Complete Guide for UK Employers

This is a step in the recruitment process of any UK employer seeking to recruit skilled workers from other countries. The sponsor licence enables businesses to sponsor non-UK nationals to fill skill-short industries, thus helping them fill crucial positions. It’s a complicated and expensive process, though, and the knowledge of costs can accumulate fast. In this tutorial, we’re going to answer all the questions you might have about the sponsor licence cost, the application process and what you need to think about when you decide to become an employer.

Why Do Companies Require A Sponsor Licence?

Following Brexit, immigration law from outside of the UK demands all employers in the UK acquire a sponsor licence to seek talents coming from outside. Hence, it is an urgent priority in sectors such as construction, healthcare, information technologies and hospitality sectors to source qualified labourers with expertise because of acute skilled-labour shortages that occurred after this change. Submission for a sponsor licence shows proof and a business is established that is legitimate towards external foreign talents for employment.

Knowledge of Sponsor Licence Cost

Sponsor licence cost depends on the business size and kind of licence required. The following details break down the major cost considerations:

Application Charges

The cost of a sponsor licence application will vary with regard to the classification of the sponsoring business, which could either be classified as a small or charitable sponsor or a medium/large sponsor. In 2024, this will cost

Small or Charitable Sponsors: £536

Small Sponsor: £1,476

A company is considered a small sponsorship if it satisfies two of the following conditions:

Annual turnover of £10.2 million or less

Total assets of £5.1 million or less

Less than 50 staff

Medium and large sponsors pay higher fees since more administrative monitoring is involved.

Certificate of Sponsorship (CoS)

Every sponsored worker must be issued with a Certificate of Sponsorship, which incurs an additional fee:

Skilled Worker CoS: £199 per certificate

Temporary Worker CoS: £21 per certificate

The CoS type depends on the worker's visa category. The employer should have enough money to pay for all the certificates when strategising on recruitment.

Immigration Skills Charge

Also, the Immigration Skills Charge needs to be paid by the sponsors who employ skilled workers to support the development of UK-based workers. The amount of the charge is computed in this way:

Small or Charitable Sponsors: £364 for the first year and £182 for every next six months

Medium or Large Sponsors: £1,000 for the first year and £500 for every next six months.

This fee applies to every sponsored worker and, as such, greatly enhances the total sponsor licence fees charged to employers employing a group of people.

Additional Costs

Besides the core charges, employers need to consider the following extra expenses that they may incur:

Legal Advice: An immigration solicitor can facilitate your process and charges from £1,000 to £5,000 depending on how complex your case is.

Compliance Audits: To keep a sponsor licence, companies have to comply with the Home Office. They can hire professionals to audit and ensure compliance, which may add to the costs.

Renewal Fees: Sponsor licences are valid for four years, and then they need to be renewed. Renewal fees are the same as the initial application fees (£536 or £1,476).

Sponsor Licence Application Process

Knowing what the process entails in applying for a sponsor licence helps the employer to carry out the sponsor licence application efficiently. Here is a step-by-step simplified guide:

1. Check Eligibility

Ensure that your business qualifies for the application. The criteria include:

There is a real need to sponsor workers.

You can provide lawful and appropriate employment as demonstrated.

There are proper HR systems that monitor the sponsored workers.

2. Gather Supporting Documents

Different documents are needed by applicants to support the application. These include:

Registration documents

Trade presence document in the UK

Tax-related compliance

Your business and industry are dependent on specific requirements. Late or missing, or even rejected, documents can delay or even reject you.

3. Online Application Submission

Online applications are submitted to the UK Visas and Immigration (UKVI) portal. In this stage, the owner has to pay the right amount for the sponsor licence cost. Otherwise, we can't let the application go through.

4. Preparation for Compliance Visit

The Home Office visits the business to see if everything they require in the way of sponsorship is met. During this visit, they will look at your HR system, followed by your recruitment practices and your ability to monitor sponsored workers.

5. Waiting for the Response

Standard processing usually takes 8 to 12 weeks for applications. The sponsor licence application will receive priority processing on payment of £500 extra, so the decisions will be available within 10 working days.

This video tells you everything you need to know about sponsor licence applications.

Maintaining Compliance as a Sponsor

After you receive a sponsor licence, you are obliged to maintain compliance in order not to be penalised or lose your licence. Key responsibilities include:

Reporting changes in the circumstances of sponsored workers to the Home Office.

Keeping accurate records of the immigration status of employees and their work assignments.

Making sure sponsored workers continue to meet visa conditions.

Failure to comply with these duties can result in fines, suspension, or cancellation of your sponsor licence.

The Real Cost of Sponsorship

Though the initial sponsor licence fee is substantial, there are ongoing compliance costs, renewal fees, and charges such as the Immigration Skills Charge, which need to be accounted for by the employer. For these costs to be managed properly, therefore, proper planning and budgeting are essential.

Invest in Your Workforce with Confidence

The possession of a sponsor licence would be a priceless asset for UK employers wishing to widen their workforce using international talent. Good budgeting with a sponsor licence means identifying what application fees and subsequent ongoing charges are associated with that licence. If done right, the process will be smooth, and businesses will find it easy not just to build the team with the right skill set and diverse workforce but also to navigate the process well. If you need expert advice on managing sponsor licence costs or ensuring compliance, A Y & J Solicitors is here to help.

A Y & J Solicitors is a specialist immigration law firm with extensive experience with sponsor licence applications. We have an in-depth understanding of immigration law and are professional and results-focused. For assistance with your visa application or any other UK immigration law concerns, please contact us at +44 20 7404 7933. We’re here to help!