Sponsor Duties In A New Enforcement Era: How To Stay Compliant

1. Why Sponsor Compliance Matters More Than Ever

UK businesses have long understood that holding a sponsor licence is a privilege, not a right, but in the current climate of increased compliance audits and revocations, proper management of a sponsor's duties is more important than ever. 

The Home Office has confirmed a dramatic escalation in enforcement. Between July 2024 and June 2025, 1,948 sponsor licences were revoked, more than double the previous year's total of 937. This huge increase is echoed by the Government's rhetoric on 'cracking down' on non-compliant sponsors. 

Therefore, it is apparent that the Home Office is actively looking for non-compliance, and the tolerance for error appears to be shrinking. In view of this, sponsors should be conducting thorough reviews of their practices to ensure compliance with their duties. 

2. Understanding Core Sponsor Duties

Sponsor duties are the duties that sponsors must comply with in order to hold a sponsor licence. The duties are not optional – they are conditions of holding a licence. Broadly, they fall into four areas:

1. Record-keeping – keeping prescribed documents for the company and each sponsored worker (for example, right to work evidence, contracts, contact details, and evidence of skills/qualifications where relevant).
2. Monitoring and reporting – tracking attendance, changes in role/pay/location, and reporting specific events within the stipulated strict timeframes through the Sponsor Management System (SMS).
3. Genuine vacancy and compliant employment – ensuring the job is real, at the stated skill level, within the correct SOC code, and paid as required.
4. Cooperation with UKVI – including responding to queries, allowing inspections, and being candid if issues arise.

The duties apply from the moment a sponsor's licence application is granted, and continue until the licence is surrendered or revoked. The duty to comply with the above is continuous – even if the Home Office assesses a sponsor's ability to comply during its application for a licence, does not mean that it will continue to be considered compliant. Sponsors have a duty to ensure continued compliance and failure to do so could result in the suspension or revocation of the licence. 

3. The Growing Causes of Sponsor Licence Revocations and Suspensions

Recent press announcements on immigration show that the Government is serious about reducing net migration to the UK and part of its plan is to revoke sponsor licences from non-compliant sponsors. The increase in revocations is not, therefore, a fluke, but completely purposeful. 

The Home Office is conducting more audits across the board, but particularly within 'at risk' sectors, such as care, construction, hospitality, and other high-volume sponsoring sectors. The Home Office, in conducting these audits, is data-sharing with HMRC and Companies House to identify inconsistencies (particularly with pay) in order to determine which sponsors to target for audit.

Audits can occur on an announced or unannounced basis, though typically we are seeing most sponsors being audited remotely. Due to this, sponsors should always be prepared for a Home Office audit. 

4. Consequences of Sponsor Licence Non-Compliance

Suspension of a Sponsor Licence

A suspension typically occurs where the Home Office suspects breaches and freezes the sponsor's ability to assign new CoS while it investigates. Sponsors are removed from the public register during suspension, but sponsored workers can continue working until the licence is either reinstated or revoked. 

Revocation of a Sponsor Licence 

Revocation ends sponsorship immediately. This means that any workers sponsored under this licence no longer have permission to work. Workers' permission will then be cancelled to expire in 60 days, in which time they will either need to make a new application to remain in the UK, or leave. 

The employer may face a cooling-off period before reapplying, and any other licences that the Key Personnel are involved with may be affected. 

Beyond immigration impact, revocations for sponsor licences can also create reputational harm, operational disruption and loss of Key Personnel, contractual risk where project delivery depends on sponsored staff, and potentially civil penalties if illegal working is found.

Recent caselaw (particularly Prestwick Care Ltd & Ors, R (On the Application Of) v Secretary of State for the Home Department [2025] EWCA Civ 184 and Supporting Care Ltd, R (On the Application Of) v Secretary of State for the Home Department [2024] EWHC 68 (Admin)) has shown that the courts are taking the view that there is no obligation for the Home Office to exercise discretion in cases involving serious and mandatory breaches. This means that challenging these decisions by way of judicial review is an uphill route unless clear public-law errors can be shown.

5. Key Compliance Pitfalls for Sponsors

While every case turns on its facts, some common failures of compliance duties have arisen in revocation cases, including:

• Failure to maintain Appendix D documents (missing right-to-work evidence, outdated contact details, incomplete files);
• Late or absent SMS reporting (e.g., unreported unpaid leave, role changes, reduced salary, or worksite moves);
• Role genuineness concerns (workers doing different duties than the CoS states; incorrect SOC classification);
• Pay and working conditions issues (including underpayment compared to the CoS or immigration salary thresholds); and
• Insufficient Key Personnel oversight (Level 1 users without proper training; delegated compliance with no senior accountability).

Often, these are not deliberate failures but are a result of a busy business putting their compliance duties on the back burner. A failure to prioritise sponsor duty compliance can, however, have catastrophic impacts for businesses. 

6. Practical Steps to Protect Your Sponsor Licence

It is imperative that all sponsors take the opportunity to review their practices and system to ensure that they are compliant with sponsor duties and remain 'audit ready' at all times. We recommend running routine internal audits to ensure that any gaps/errors are caught early. Training for Key Personnel and managers is also essential for ensuring that staff are aware of what their sponsor duties actually are, and how to comply. 

We have also seen increased information sharing between governmental departments, including Companies House and HMRC. This means that the Home Office is being made aware of any discrepancies in pay between salaries actually paid and what was stated on the CoS before the sponsor has even been requested to provide documentation. Therefore, tracking salary rates, hours, and CoS data is essential as discrepancies in pay can result in an immigration audit and investigation by the Home Office. 

7. Final Considerations for Sponsor Compliance

With revocations at record highs, sponsors should assume UKVI scrutiny is expected at any point, particularly in the aforementioned 'high-risk' sectors. Sponsors should take steps to ensure compliance now. 

8. Contact Our Immigration Barristers

For expert advice and assistance in relation to sponsor licence compliance, contact our immigration barristers in London on 0203 617 9173 or via the enquiry form below.

9. Frequently Asked Questions

What are sponsor duties and why are they important?

Sponsor duties are the legal obligations UK businesses must comply with to hold a sponsor licence. They include record-keeping, monitoring and reporting, ensuring genuine vacancies and compliant employment, and cooperating with UKVI. Proper compliance prevents suspension or revocation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.