What Are the Fees for a UK Sponsor Licence? A Guide to Costs and Budgeting
In the current globalised world, businesses in the UK rely heavily on foreign talent to bridge skill gaps and drive innovation. Businesses hiring foreign workers must apply through the UK’s immigration system, and employers need a sponsor licence. This licence allows companies to hire workers who are not EU and Irish citizens but is financially binding. The most important thing to note is the sponsor licence application fee that is charged when applying.
It will also help businesses prepare for their budgets and meet immigration laws. In this guide, we delve into the costs of getting and keeping a UK sponsor licence, what other costs to expect, and how to budget for it.
Why Sponsor Licence Matters
A sponsor licence is a mandatory legal requirement for UK employers looking to recruit non-UK nationals through the points-based immigration system. The licence enables companies to sponsor skilled workers in specific eligible roles. It is very important for companies to attract global talent, mainly in sectors with skill shortages, such as healthcare, engineering, and IT.
Of course, a sponsor licence is not free. The sponsor licence application fee and other charges are an integral part of any business's recruitment and compliance budget.
Sponsor Licence Application Fee
The size and type of the organisation applying to determine the sponsor licence application fee:
- Small or Charitable Sponsors: £536
- Medium or Large Sponsors: £1,476
To be considered a small sponsor, businesses must meet at least two of the following criteria:
- Annual turnover £10.2 million or less
- Total assets not exceeding £5.1 million
- Fewer than 50 employees
Medium and large sponsors exceed the threshold. The fee is payable as a one-off when you apply. The licence is valid for four years, after which businesses pay a renewal fee to continue to use their licence.
Additional Costs You Need to Budget For
The biggest of the costs associated with the sponsor licence application is the sponsor licence application fee, but it is not the only cost. Employers also need to budget for related costs, including:
- Immigration Skills Charge
Skilled worker sponsors pay this levy annually. For a small sponsor, it is £364 per year for each worker. Medium or large sponsors pay £1,000 per year. The fee is valid for the whole duration of the worker's stay in the country.
- CoS Certificate of Sponsorship
The CoS costs £199 and all sponsored workers must have one. This is an electronic paper that shows the position and to justify why you need to sponsor.
- Priority Processing Fees
Companies that need faster decisions get priority processing from the Home Office. The processing time is reduced to 10 working days, but it costs an extra £500 per service.
- Legal and Consultancy Fees
Almost all businesses employ experts to make sure the application is complete and free of errors. However, legal fees are different, and they are usually money well spent to prevent rejections or delays.
- Training and HR Upgrades
A sponsor licence requires good HR systems to monitor and track company-sponsored employees and ensure compliance with immigration rules. Upgrading these systems or teaching staff to manage compliance adds cost to the overall costs.
Consequences of Non-Compliance and Sponsor Licence Revocation
The cost of obtaining and maintaining a sponsor licence is considerable, while the cost of failure to comply is much greater. If employers cannot deliver on the sponsorship scheme, they could lose their licence, with both the potential to damage their operations and their reputation.
Having your sponsor licence suspended is usually due to a failure to monitor employees' immigration status, failing to update changes in employees' situation or hiring people to work in jobs that do not fall under the sponsor licence. If the business loses its licence, already sponsored workers may have to leave the UK because the business will no longer be able to sponsor workers from abroad.
Budgeting for Sponsor Licence Costs
To manage the costs of the sponsor licence, you need effective budgeting. Possibilities for employers include the following:
- Total Costs in Advance
Your recruitment budget should include all related expenses, including the sponsor licence application fee, Immigration Skills Charge and CoS costs.
- Track Compliance Expenses
Compliance has ongoing costs: the right-to-work checks, keeping accurate employee records, and reacting to Home Office audits.
- Plan for Unexpected Expenses
There are also surprise costs, such as answering to licence suspension or appealing against the sponsor licence revoked status. Investing in early legal advice will, therefore, help prevent situations of this kind from arising.
The Long-Term Value of a Sponsor Licence
Despite the price, a sponsor licence remains very beneficial to businesses. It provides them with access to a world talent pool, allows them to address skill shortages, and helps drive innovation. Sponsored employees bring with them unique and valuable experience and expertise to help a business grow and remain competitive.
Additionally, complying with the country’s laws around immigration breeds trust with stakeholders — employees, clients and regulators — alike. When one maintains a sponsor licence responsibly, one avoids fines and maximises the value invested in the business.
This video shows a happy talking about how A Y & J Solicitors helped them obtain their sponsor licence.
Get Professional Help
This is only part of the cost to an employer of getting international talent to work in their company—all the costs include sponsor licence application fee, Immigration Skills Charge, CoS fees, and the cost of compliance. Failure to meet the terms of a sponsor licence could lead to the licence being withdrawn, causing operational difficulties and damage to reputation. Businesses can successfully navigate the sponsorship process by understanding these costs and planning effectively. For expert assistance with managing your sponsor licence application, contact A Y & J Solicitors.
A Y & J Solicitors is a specialist immigration law firm with extensive experience with sponsor licence applications. We have an in-depth understanding of immigration law and are professional and results-focused. For assistance with your visa application or any other UK immigration law concerns, please contact us at +44 20 7404 7933. We’re here to help!
Andrew Lai, Managing Director, Boab AI and Lead, SMEC AI
