Common Mistakes to Avoid in Sponsor Licence Applications

Common Mistakes to Avoid in Sponsor Licence Applications

by Gary McIndoe, Managing Director of Latitude Law

UK businesses that want to hire the best talent from overseas will need a sponsor licence, which is a legal document that allows a company to support visa applications for overseas workers. The aim of this structure is to enable talented professionals to lend their talents to the UK economy, and ensure that British companies benefit from the knowledge and experience these workers can bring.

If your organisation wants to apply for a sponsor licence, it is important to understand the legal requirements that govern this process. A refusal can, in some instances, freeze your business out of sponsorship for 12 months, which can result in frustrating delays and limitations in the hiring process.

Recognising some of the most common mistakes that organisations make when applying for sponsorship licences is the best way to avoid them. Here, we have outlined some of the errors that we see most often, along with suggestions for how you can avoid them. These suggestions may be easier said than done, but it is crucial to approach this process with as thorough and careful an approach as possible. Whatever efforts it takes you to secure your licence will pay off when you have access to a much broader base of excellent candidates, and save you the expense and inconvenience of resubmitting or appealing a refused application.

Submitting the Correct Documentation

A business has many legal obligations to fulfil when it comes to acting as a licensed sponsor. The specifics vary depending on the type of licence you want and the details of the workers you intend to employ, so the first step is to identify and understand the legal requirements that must be met in your situation.

The documents you will need to provide will depend on the business sector you operate in and the type of roles you are looking to sponsor. A full list of documents you must provide can be found in Appendix A of the Home Office guidance for sponsors. In most cases, you will need to provide at least four supporting documents from the lists included in Appendix A.

Grounds for refusal based on supporting documentation include cases where the supplied documents are out of date, incomplete, or not detailed correctly. For example, a lease of a business premises which was not signed by both parties to the agreement.

Sponsorship Management Failures

Every organisation applying for a Home Office sponsorship licence requires certain individuals to act as ‘Key Personnel’ on the licence. There are three positions that organisations need to fill, and each role has its own responsibilities for ensuring that the sponsorship process is conducted in accordance with the Immigration Rules. These roles may also involve dealing with the government’s Sponsorship Management System (SMS), which is the platform the Home Office will expect you to use for everything involved with the sponsorship once the licence has been approved.

You would first need to ensure that the individuals within your organisation nominated for any Key Personnel position meet the eligibility criteria. None of your Key Personnel can be:

  • a representative who is not based in the UK
  • subject to a Bankruptcy Restrictions Order or Bankruptcy Restrictions Undertaking
  • a contractor or consultant who is contracted for a specific project
  • subject to a Debt Relief Restrictions Order or Debt Relief Restrictions Undertaking
  • legally prohibited from being a company director
  • subject to adverse involvement with the Home Office such as employing illegal workers

The Key Personnel must also hold valid immigration status for the duration of the licence, which is now 10 years (previously four years). Your organisation will therefore need to appoint individuals who are not subject to immigration control (such as British citizens or people with Indefinite Leave to Remain in the UK) as they will be required to hold immigration status in the UK for the duration of the licence. You must ensure that the individuals meet the requirements before appointing them as Key Personnel.

The three Key Personnel roles are:

  • Authorising Officer: This is the person within the business who will be responsible for the overall management and control of the sponsor licence. This position will be usually held by the person in charge of recruitment. They must ensure that the sponsorship duties are met and that the information provided to the Home Office is accurate and complete. They are also responsible for deciding who is allowed to access the SMS system and what level of access they should have, but are not generally involved in the day-to-day operation of the system. If the Authorising Officer wishes to be involved in the day-to-day operation of the sponsorship, they can appoint themselves as a Level 1 User, as they will not be given any access to the system automatically.
  • Key Contact: The person in this role acts as the main point of contact between the sponsoring organisation and the Home Office. They will deal with all communications regarding the sponsor licence, including receiving information requests from the Home Office and responding to any correspondence. However, they will not have access to the SMS system unless nominated as a Level 1 or Level 2 User as well.
  • Level 1 User: Level 1 Users are responsible for day-to-day activities and management of the SMS system. This includes creating and assigning any Certificates of Sponsorship that the company issues, updating sponsor and migrant details, and reporting any changes in circumstances to the Home Office using the government interface. You can appoint as many Level 1 Users as needed, but at least one of them must be free from immigration restrictions and an employee, partner or director of the sponsoring organisation.

Failure to correctly allocate the Key Personnel may lead to your application being refused. Even if it is approved, your obligations do not end at that point – the Home Office may conduct audits on a regular basis to ensure you are maintaining compliance with your legal duties. These audits usually involve carrying out checks on the Key Personnel, checking the business’ HR and recruitment practices and its management and understanding of their duties and responsibilities as a sponsor. The penalties for companies that fail to comply can be serious, and include having your sponsor licence revoked.

The best approach is to have an efficient and compliant system in place before you apply for your sponsorship licence, and make sure that anyone who has responsibilities within the system understands how to fulfil them. Provide training to any employees who need it to ensure that when your licence is granted, you are ready to begin hiring without any concerns about legal scrutiny.

Inadequate Documentation and Record-Keeping

As part of a business’ responsibilities when employing workers from overseas, employers must keep accurate records for each sponsored employee. This includes details of their passports or ID documents, contact information, their right to work, and attendance records. They must also report certain events to the Home Office, such as changes in a worker’s circumstances (for example, if a sponsored employee stops attending work) and any significant changes in the business’ structure.

If the business cannot show that it has systems in place to track and monitor employee attendance, visa status, and right to work before it begins recruiting from overseas, its sponsor licence may be refused. If this information is later discovered during an audit, the licence may be revoked.

Administrative Mistakes

Some of the simplest and most common errors made by businesses when applying for sponsor licences are administrative in nature. For example, choosing the wrong type of licence or tier for the kind of workers the business intends to sponsor might result in the licence being granted, but will create further problems for the organisation when it comes to recruitment.

The solution in most of these cases is to work with an expert immigration solicitor on your application. This is the best way to ensure that you consider the appropriate type of licence for the visa route that will best suit the needs of your prospective employees. It can also offer an outside view on the effectiveness of your sponsorship management system and internal policies, which can help you to meet your legal obligations.

If your application is refused, a solicitor can advise you on how to address any mistakes before you resubmit, or discuss the possibility of making an appeal, including the outcomes you can expect before you enter into that process.

Businesses that want greater access to talent from overseas should speak to a legal expert today and start the process of applying for a sponsor licence.

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