Recent Changes to the UK’s Home Office Sponsor Guidance

The UK Home Office has implemented several significant changes to sponsor licence requirements and related immigration rules, with many coming into effect around April 9, 2025. These changes aim to strengthen immigration controls, protect sponsored workers, and refine the sponsorship system.

Here’s a breakdown of the key changes relevant to sponsor licences from April 2025:

Prohibition on Recouping Fees from Sponsored Workers:

• Expanded Prohibition: From April 9, 2025, sponsors are explicitly prohibited from passing on the costs of sponsor licence fees and associated administrative costs to sponsored workers across all immigration routes (including Global Business Mobility, Minister of Religion, International Sportsperson, Scale-up, and Seasonal Worker routes).
• Skilled Worker Route Specifics: This prohibition was already in effect for Skilled Worker sponsor licence fees and Certificate of Sponsorship (CoS) fees assigned on or after December 31, 2024.
• Consequences of Non-Compliance: Attempting to recoup these costs will normally lead to the revocation of the sponsor licence, resulting in the loss of all sponsored foreign workers and a cooling-off period of at least 12 months before a new application can be made.
• “Associated Administrative Costs” Defined: The guidance clarifies that “associated administrative costs” include any costs incurred by sponsors to obtain, use, or maintain the sponsor licence.

Restrictions on Salary Deductions and Self-Sponsorship

• Deductions from Salary Calculation: The Home Office now deducts certain payments made by the worker to the sponsor (or a related organization) from their gross salary when assessing if the minimum salary threshold is met. This applies to:
  • Investments made by the worker in the sponsoring business (averaged over the visa length).
  • Deductions or loan repayments related to business or immigration costs.
• Purpose: This is to prevent “self-sponsorship” loopholes where applicants effectively pay for their own salary through investments or where sponsors indirectly pass on costs.
• Exemptions: Payments not related to business costs, immigration costs, or investment, such as genuine salary sacrifice arrangements for employee benefits (e.g., childcare), will not be deducted.
• Implications: Employers must carefully review their payroll and HR practices to ensure compliance, as failure to meet the salary requirements (even after deductions) can lead to sponsor licence issues or visa cancellations.

Increased Minimum Salary Thresholds

• Skilled Worker Minimum Salary: The lowest general minimum salary threshold for Skilled Workers increased to £29,000 annually (from £26,200) from April 4, 2024. For Certificates of Sponsorship assigned on or after April 9, 2025, the lowest general minimum salary threshold for those on the most discounted rates (e.g., Health and Care visas, New Entrants, STEM PhDs, Immigrant Salary List) has risen from £23,200 to £25,000 annually.
• National Living Wage Alignment: The National Living Wage increased from April 1, 2025, from £11.44 to £12.21 per hour for those aged 21 and over. Sponsors must ensure their sponsored workers meet or exceed the relevant minimum hourly rates.

Changes to Company Size Classification

• Revised Thresholds: From April 6, 2025, the turnover and balance sheet thresholds that define micro, small, and medium-sized companies under the Companies Act 2006 changed. This can impact the sponsor licence application fee and the Immigration Skills Charge, as smaller sponsors pay less.
  • New “Small Company” Definition (at least two of these must apply):
    • Annual turnover: £15 million or less (up from £10.2 million)
    • Total assets: £7.5 million or less (up from £5.1 million)
    • Employees: 50 or fewer (unchanged)
• Reporting Duty: Sponsors have a duty to report to the Home Office via the Sponsor Management System (SMS) within 20 working days if their size classification changes.

New Recruitment Requirement for Care Workers (England)

• Domestic Recruitment Priority: From April 9, 2025, care providers in England sponsoring overseas care workers (occupation codes 6145 and 6146) must demonstrate that they have first attempted to recruit from the pool of care workers already in England who are seeking new sponsorship.
• Evidence Required: Sponsors will need to provide confirmation from the relevant regional or sub-regional partnership that they have tried this domestic recruitment and that no suitable workers were available from this pool.
• Exemptions: This does not apply to care workers already sponsored in these occupations (including those changing employers) or those switching from other immigration routes who have been working lawfully for their sponsor for at least three months.

Updates to Key Personnel Suitability

• Refusal Grounds: The Home Office has updated its guidance to state that a sponsor licence application may be refused if a member of the proposed Key Personnel was also key personnel at a sponsor whose licence was revoked in the last 12 months, or if they were named on a previously refused sponsor licence application within the past 6 months.

Increased Visa and CoS Fees

• Most Home Office immigration, visa application, and nationality fees increased on April 9, 2025, generally by 5-10%.
• Certificate of Sponsorship (CoS) Fees: A significant increase was seen in the CoS fee for most Skilled Worker and Senior or Specialist Worker visas, rising by 120% from £239 to £525.

Clarification on Permanent Vacancies for Creative Workers

• New guidance clarifies that an organization sponsoring creative workers on Temporary Work – Creative Worker visas cannot do so to fill a permanent position. This impacts those who might have intended to repeatedly renew this visa.

General Advice for Sponsors

• Review Practices: Employers holding or seeking sponsor licences must thoroughly review their internal policies, contracts, and HR practices to ensure full compliance with these updated rules.
• Stay Informed: UK immigration rules are subject to frequent changes. Always refer to the official GOV.UK website for the most up-to-date guidance.
• Seek Legal Advice: Due to the complexity and potential for severe penalties for non-compliance, it is highly recommended to seek professional legal advice from an immigration specialist.