Skilled worker and intra-company transfer sponsor licences

03 March 2021

From 1 January 2021, all non-British or Irish citizens need permission to work in the UK.

The Skilled Worker visa enables organisations to sponsor migrant workers to undertake permanent employment in the UK. Skilled Worker replaced Tier 2 (General) on 1 December 2020.

Intra-Company Transfer (ICT) visas enables organisations to sponsor their existing overseas employees to work in the UK on temporary assignment. ICT replaced Tier 2 (Intra-Company Transfer) on 1 December 2020.

In order to sponsor a migrant to work in the UK, the company must first obtain a licence from the Home Office. An employer may also be required to obtain a Sponsor Licence where it merges with or takes over another business which already sponsors migrants under Skilled Worker or ICT or the older Tier 2 visas.

Sponsored migrants are sponsored to perform a specific role in a specific location for a specific sum for a specific duration; all of which must be declared to the Home Office with updates made should any of these details change.

In order to maintain its licence, employers must comply with a number of specific Sponsor Licence duties and responsibilities and with the law generally.

How do I apply for a sponsor licence? 

The Home Office will grant a Sponsor Licence to those organisations that are active and trading in the UK, can show a genuine need to sponsor migrants and can demonstrate their ability to comply with certain sponsorship duties and responsibilities.

An application is made online with supporting documents sent to the Home Office by post. It can be a lengthy process, often taking around three months to complete. However, in certain circumstances the Home Office will agree to expedite the processing of an application where there are strong business reasons for the application to be treated as urgent.

Supporting documentation

A minimum number of supporting documents (normally four) must be submitted with the Sponsor Licence application. The required documentation will depend on factors such as the licence being applied for and the type and size of the employer’s organisation. The documentation typically includes copies of the following documents:

  • the company’s latest audited accounts;
  • employer’s liability insurance certificate for at least £5,000,000;
  • evidence of registering with HMRC as an employer who pays PAYE & National Insurance;
  • proof of ownership of business premises or proof of lease of business premises;
  • certificate of VAT registration and the employer’s latest VAT return confirming the VAT registration number, if the company’s turnover is in excess of £64,000; and/or
  • evidence that the company has a current, corporate bank account with a bank registered by the Financial Conduct Authority in the UK (this evidence is mandatory if the company has been trading in the UK for less than 18 months).

Certain companies are not required to provide documents, for example those listed on the London Stock Exchange (main market).

In addition, if the company wishes to sponsor ICT migrants, it will need to provide evidence of the link between the UK company and those related overseas entities. This would normally be in the form of an affidavit, signed by a senior executive within the UK entity, identifying all of the entities linked by common ownership and control both in the UK and overseas.

Possible compliance visit

Once the application has been submitted, the Home Office will make any necessary checks and potentially request additional information and documentation.

The Home Office may also undertake a compliance visit in order to satisfy itself that the employer’s need is genuine and that it can meet the sponsor licence requirements. This may involve checking the organisation’s HR systems, policies and procedures currently in place. It is therefore vital that the employer has the appropriate systems in place prior to submitting the application.

Key personnel

An employer must allocate specific roles to staff who will, in turn, liaise with the Home Office. These individuals must be permanently based in the UK for the duration of their time in the relevant role and must be a paid member of staff or an office holder (for example a director).

There are four roles which need to be allocated:

Authorising Officer: has ultimate responsibility for the Sponsor Licence and immigration compliance so should be at a senior level.

Key Contact: acts as the main point of contact between the sponsor and the Home Office.

Level 1 user: conducts day-to-day sponsorship activities with full use of the Sponsor Management System (SMS), an online tool which enables an employer to manage or renew their license and apply for and manage Certificates of Sponsorship (CoS) for employees that they wish to sponsor under Skilled Worker or ICT. A sponsor may have multiple Level 1 users.

Level 2 user: have partial use of the SMS in that they can only assign CoS and report migrant activity to the Home Office for those CoS that they have issued. A sponsor may have multiple Level 2 users.

A representative, such as Macfarlanes, can undertake the last three roles on behalf of the employer. However, a representative cannot be an Authorising Officer and the company must always have one employee/office holder who is a Level 1 user. Consequently, a company must have at least one UK employee/office holder in place before it can apply for a Sponsor Licence.

What happens once you become a sponsor?

Provided that the application is successful, an employer will be awarded an “A-rated” licence valid for four years and will be granted access to the online Sponsor Management System (SMS). It will then be able to issue CoS to migrants provided the relevant Skilled Worker requirements are satisfied. The workers can then use these CoS to apply for the appropriate immigration permission to enable them to come and work for the sponsor in the UK in the job detailed on the CoS.

What are the sponsor obligations?

The obligations cover five key areas.

  1. Monitoring immigration statusall employers, whether Sponsor Licence holders or not, should be checking the right to work of each employee and tracking the expiry dates of those with time limited work permissions.
  2. Maintaining contact details – current and past contact details of sponsored migrants must be recorded.
  3. Record-keeping – each sponsored worker should have a file which contains the evidence that they are eligible for sponsorship (such as a CV or degree certificate) and other documents set out in the appropriate Home Office guidance, such as payslips, a contract of employment, evidence of a resident labour market test where one was required etc.
  4. Migrant tracking and monitoring – each sponsored worker’s absences and annual leave should be recorded. Any changes in their employment circumstances (for example, a change in job role or salary or if they leave the sponsor) should be reported to the Home Office via the SMS.
  5. Recruitment and accreditation - Copies of any registration and/or professional accreditation documents and/or any confirmation letter the migrant is required to have in order to do their job should be kept on file. For example, where the migrant is a doctor, proof of registration with the General Medical Council.

The sponsor must have policies and practices in place to ensure that these obligations are met.

Why is compliance key?

The Home Office regularly undertakes unannounced audits at employers’ premises. Sponsor licence holders must therefore understand the duties and responsibilities of being a sponsor licence holder and the penalties for non-compliance.

Non-compliance can result in a downgrade to a “B-rating” or suspension followed by revocation of the sponsor licence. In the case of downgrading and suspension, the company would be unable to sponsor any new migrants. In the case of revocation, all existing sponsored migrants would have their visas cancelled.

In addition, if any worker, whether sponsored or not, was found to be working illegally a civil penalty of up to £20,000 could be issued per illegal worker.

Furthermore, it is a criminal offence to employ someone that the employer knows, or has reasonable cause to believe, does not have the right to work in the UK. Directors of the employer who were aware of the illegal worker may be barred from acting as directors and, in more serious cases, can be sent to prison and subject to an unlimited fine.

To minimise these risks, employers should seek legal advice in relation to compliance with the law on the prevention of illegal working and, if relevant, their duties and responsibilities as a sponsor.

Skilled worker

Skilled Worker allows companies to sponsor migrants to work in permanent positions in the UK with the potential for them to apply for Indefinite Leave to Remain (also known as permanent residence or settlement) after five years.

Intra-company transfer

Intra-Company Transfer (ICT) visas enables organisations to sponsor their existing overseas employees to work in the UK on temporary assignment. Most employees will need to have been working for the overseas entity for at least 12 months before they are eligible to apply, though there is exemption to this rule for high earners.

Defined and Undefined CoS

Skilled Worker and ICT CoS come in two forms, “Defined” or “Undefined”.

A Defined CoS is required for applications filed outside of the UK.

The employer must request a Defined CoS from the Home Office who will assess the application and ask for more information if required. Most decisions are made without the need to supply further information and within 2-3 days. Provided the request is successful, the employer may assign the Defined CoS to the migrant.

An Undefined CoS is required for applications filed within the UK.

Sponsors are allocated a limited number of Undefined CoS to assign throughout the year which runs from April to April. Each year, sponsors must request an annual allocation of Undefined CoS to cover the next 12 months. A further allocation can be requested at any time during the year, if required.

What next?

Once a migrant has been assigned a CoS, the applicant must submit their visa application either to a British Diplomatic Post in their country of origin or residence or, if they are in the UK, directly to the Home Office within three months. 

The migrant’s close family members (partner and minor children) may also apply for a visa to accompany them. Family members will be able to live, work and study in the UK.