On New Year’s Eve, many were focused on celebrating the arrival of whatever 2025 may bring, but behind the scenes the Home Office introduced some significant changes to immigration policy. These updates have been quietly implemented as part of the government’s ongoing ‘crackdown’ on alleged abuse of the UK immigration system, but some could have far-reaching implications. In the absence of a thorough understanding of the relevant rules and guidance, even well-intentioned businesses could find themselves at the receiving end of a licence application refusal (following which there is a 6-month cooling off period before a new application can be submitted) or, worse, revocation of the licence for existing sponsors.

In this post we summarise the key changes.

Workers and Temporary Workers – guidance for sponsors part 1: apply for a licence

• Wording to clarify that sponsor licences must not be used to sponsor workers in a personal capacity including in the following circumstances:
• the sponsor is an individual person or household who wishes to employ or engage a worker, or workers, in a personal capacity and is not otherwise conducting business or providing a service in the UK; and
• the worker, or workers, will be employed by, or engaged for the personal benefit of, an individual who works for the sponsor, or a close relative or partner of that individual, and the role is unrelated to the sponsor’s wider activities
• New sponsors applying for a licence after 31 December 2024, must have at least one Level 1 User who is either an employee, a partner or a director within the organisation and is a settled worker (i.e. is a British citizen or has indefinite leave to remain or settled status). Although sponsors have always been required to have at least one Level 1 user who is a settled worker, the previous guidance wording allowed a third party, such as an appointed Legal Representative, to fill that role.
• On or after 31 December 2024, a Skilled Worker sponsor must not pass on to or recoup from a worker it is sponsoring either the cost of the sponsor licence fee (irrespective of when the licence was granted) and/or any associated administrative costs or the costs of a Certificate of Sponsorship (CoS) (for CoS assigned on or after 31 December 2024). Previously, sponsors were only prohibited from passing on or recouping the Immigration Skills Charge (rather than the £239 CoS fee). Sponsors who have, to date, legitimately passed on or recouped licence or CoS fees from a worker should ensure that any related standard documentation (such as repayment or ‘claw-back’ agreements) are updated accordingly to ensure they don’t fall foul of this provision in future (agreements with workers to pay back the £239 cost of a CoS assigned before 31 December 2024 do not need to be amended).
• The Home Office can now additionally refuse to grant a sponsor licence if:
• the prospective sponsor has nominated a prohibited person as Key Personnel;
  • the Home Office has reason to believe that the prospective sponsor is acting or will act as an employment agency or business and intends to supply workers as labour to another organisation. [This isn’t entirely new as supplying workers as labour has always been a reason for revoking a sponsor licence but the Home Office is now expressly stating it as a ground for refusal.]
  • the prospective sponsor intends to sponsor workers in a personal capacity.
• Wording to clarify that supporting evidence must be submitted when adding additional routes to a licence (for example in relation to the Global Business Mobility Senior or Specialist Worker or Service Supplier category).
• Wording to bolster the genuineness test stating that “Sponsors must genuinely intend to offer the roles they have indicated in their sponsor licence application”. This seems unnecessary but prospective sponsors should be prepared to justify any change in their recruitment planning should their first sponsor worker be hired in a different role to the one originally stated.

Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance

• The concession which allowed undischarged bankrupts to be appointed as Level 2 Users or Key Contacts has now been removed.
• Wording to confirm that, following the removal of the requirement to renew a sponsor licence every 4 years, a sponsor can only be downgraded to a B-rating on a maximum of 2 occasions during any rolling 4-year period.
• In line with changes made to Part 1, the following new grounds for revocation have been added:
• Where a sponsor recoups, or attempts to recoup, some or all of the cost of assigning a CoS from a Skilled Worker (where that CoS was assigned on or after 31 December 2024).
  • Where a sponsor recoups, or attempts to recoup, some or all of the cost of a Skilled Worker sponsor licence and/or associated administrative costs (including any premium services) from a worker they are sponsoring on or after 31 December 2024 (irrespective of when the licence was granted).
  • where a sponsor seeks to sponsor a worker in a personal capacity (as defined in Part 1).

All changes further support the Home Office’s intention to make compliance a top priority for 2025, and we can expect to see more updates and a firm stance on non-compliance.