Ultimate Guide to UK Sponsor Licence Compliance (2026)

UK Sponsor Licence Compliance: How to Stay Compliant, Survive Home Office Audits & Avoid Licence Revocation

Holding a UK sponsor licence is a significant responsibility. It grants you the privilege of hiring talent from around the world, but it also places your organisation under the strict scrutiny of the Home Office. In 2025 and 2026, UK Visas and Immigration (UKVI) has dramatically intensified its enforcement activities, with a record number of sponsor licences being suspended and revoked. For any business reliant on sponsored workers, from care homes and construction firms to tech startups and large corporations, non-compliance is not an option—it’s an existential threat.

This comprehensive guide explains everything you need to know about your duties as a licensed sponsor. We will cover your core responsibilities, the most common breaches that lead to enforcement action, and how to prepare for the ever-present risk of a Home Office compliance audit. Understanding and embedding these principles is the only way to protect your licence, your workforce, and your business operations.

The Guiding Principles of Sponsorship: A Privilege, Not a Right

The Home Office operates on the core principle that sponsorship is a privilege, not a right. This means that the government places a high level of trust in you, as an employer, to uphold the integrity of the UK’s immigration system. In return for the ability to sponsor migrant workers, you are expected to act as a partner in preventing immigration abuse. Failure to uphold this trust is the fastest way to lose your licence.

Your duties are designed to ensure you meet three fundamental objectives:

• Preventing abuse of the immigration system.
• Capturing early any patterns of migrant behaviour that may cause concern.
• Ensuring compliance with the wider law.

Every rule, reporting requirement, and record-keeping duty is built upon this foundation of trust and responsibility.

Your Core Sponsor Duties: A Breakdown

Your responsibilities as a sponsor are detailed in the Home Office’s official guidance and can be broken down into several key areas. Mastering these is non-negotiable.

1. Record-Keeping Duties

You must maintain detailed and up-to-date records for every sponsored worker. This is not just a matter of good HR practice; the Home Office can request these documents at any time, and failure to produce them can be grounds for suspension. You must keep a copy of:

• The worker’s passport and biometric residence permit (BRP).
• A full history of the worker’s contact details.
• A record of the worker’s absences.
• The worker’s employment contract.
• Payslips as evidence of salary payment.
• Any other document specified in Appendix D of the sponsor guidance.

2. Reporting Duties

You have a duty to report certain events and changes of circumstance to the Home Office via the Sponsor Management System (SMS). These reports must be made within strict time limits, typically 10 or 20 working days, depending on the event. Key reportable events include:

• A sponsored worker not starting their role on the expected date.
• A sponsored worker being absent from work for more than 10 consecutive working days without permission.
• A significant change in the worker’s employment, such as a promotion, change in job title, or a reduction in salary.
• Any change to your own organisation, such as a change of address, a merger, or a takeover.

3. Complying with Immigration and UK Law

This is a broad but critical duty. It means you must not only adhere to the specific rules of the sponsorship regime but also comply with all other relevant UK laws, such as employment law and tax regulations. A key component of this is conducting correct Right to Work checks for all employees, not just sponsored workers. Failure to do so can lead to civil penalties of up to £60,000 per illegal worker and is one of the most common reasons for licence revocation.

4. Ensuring Genuine Vacancies and Appropriate Skill Levels

You must only sponsor workers for roles that are genuine, meet the required skill level (generally RQF Level 3 or above), and are paid an appropriate salary. The Home Office is increasingly vigilant about roles that appear to be created simply to facilitate a migrant’s entry to the UK. During an audit, they will scrutinise job descriptions, interview records, and the day-to-day duties of sponsored workers to ensure the role is not a sham.

Home Office Compliance Audits: Are You Ready?

A Home Office compliance audit, or visit, can happen at any time, often with little or no notice. The purpose of the visit is to verify that you are complying with your sponsor duties. Compliance officers will typically want to:

• Review your HR systems and record-keeping practices.
• Inspect the personnel files of your sponsored workers.
• Interview your Authorising Officer, Key Contact, and sponsored workers.
• Verify that sponsored workers are performing the roles for which they were sponsored.

The Enforcement Ladder: From Downgrade to Revocation

If the Home Office finds evidence of non-compliance, it can take a range of enforcement actions. It’s crucial to understand this ladder of sanctions.

Action	What it Means for You
B-Rating	Your licence is downgraded. You must follow a paid-for ‘action plan’ to improve and cannot sponsor new workers until you regain your A-rating.
Suspension	Your licence is temporarily ‘paused’ while the Home Office investigates serious concerns. You cannot assign any new Certificates of Sponsorship (CoS).
Revocation	Your licence is cancelled. You lose the ability to sponsor workers, and the visas of your existing sponsored staff will be curtailed.

Sponsor Licence Suspension

Suspension is a business emergency. It means UKVI has serious concerns and is actively considering revoking your licence. You will typically be given 20 working days to provide a detailed response to their allegations. Read our full guide on responding to a sponsor licence suspension here.

Sponsor Licence Revocation

This is the worst-case scenario. Revocation has devastating consequences, including the loss of your sponsored workforce and a ban on reapplying for a licence for at least 12 months. There is no right of appeal. Learn more about the consequences of revocation and how to avoid it.

In conclusion

Sponsor licence compliance is a complex and high-stakes area of business management. The Home Office’s increased focus on enforcement means that a passive approach is no longer viable. By understanding your duties, implementing robust HR processes, and being audit-ready at all times, you can protect your licence and ensure your access to global talent remains secure.

If your sponsor licence is at risk, speak to a compliance adviser today. Delays cost licences.

Related Articles

• Sponsor Licence Suspension: What It Means & How to Respond in 20 Working Days
• Sponsor Licence Revocation: Can You Save Your Business After UKVI Action?
• Home Office Sponsor Audit: Checklist, Red Flags & How to Pass
• Common Sponsor Licence Breaches That Trigger UKVI Enforcement
• Right to Work Failures: The Fastest Way to Lose Your Sponsor Licence
• Care Home Sponsor Licence Compliance: Why Most Licences Fail Audits