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Post-Brexit Immigration – Tier 2 – Sponsor Licences

Recently, Sajid Javid announced that free movement from Europe will end, EU nationals will be treated the same way as non-EU nationals wishing to come to the UK and a ‘reformed’ immigration system will focus on skilled workers.

It is important for businesses to understand the impact these proposals will have on the recruitment of EU nationals, and to take positive steps to ensure they are best placed to continue to recruit from Europe after Brexit.

Currently, European nationals enjoy free movement to the UK with full access to the UK labour market whereas non-European nationals must usually be sponsored by an employer to undertake a skilled role if they wish to work in the UK. When considering the structure of a new immigration system for European nationals, the Migration Advisory Commission (MAC) has recommended that there is no longer any preferential treatment for European nationals If these recommendations are followed, and if rights of access to the UK labour market are not negotiated by the European Union, we will see the current sponsor licence system (Tier 2 of the Points Based System) extended to apply to European nationals in 2021.

Applications for sponsor licences can include time-consuming preparation before they are submitted for consideration to the Home Office. This is due to the extensive list of documents that must be provided in support. Advertising of the vacancies is may also be required by the Home Office, with the majority having to be advertised of a period of at least 28 days, adding to the overall timescales involved. Once submitted, applications can take between 8 and 16 weeks to be decided.

We anticipate that as the UK’s exit from the EU draws closer, the sponsor licensing decision-making unit at the Home Office will be placed under pressure as the numbers of applications increase, likely resulting in longer processing time. The impact for businesses can be serious, as recruitment into key roles could be delayed.

The financial impact of moving from free movement for European nationals to engagement under the sponsor licencing system will be high and may come as a surprise to many. Licence applications fees are currently between £536 and £1,476, contingent on the size of the business. There are also other accompanying costs involved, such as the fee to assign a Certificate of Sponsorship to an individual and the Immigration Skills Charge.

The Immigration Skills charge is an additional charge, payable by businesses for each migrant worker then sponsor with charges up to £1,000 per year, per sponsored worker.

When a business secures a sponsor licence they need to ensure that they have policies and systems in place in order to retain it and to maintain compliance with the conditions of the licence. Our quick guide highlights some of the main duties and responsibilities for sponsor licence holders.

The duties and responsibilities include record-keeping and reporting duties. Many businesses will not be used to retaining such high levels of information and as such, it is imperative that policies and systems are put into place at the outset to ensure ongoing compliance. A good starting point is to ensure that all required policies and processes, including HR records are in place and up to date. It is also a good time to audit your personnel files in readiness for the right to work checks resulting from the EU Settlement Scheme, due to be rolled out later this year.

Not only do these policies and systems need to exist, they need to be implemented across the business and embedded into the businesses culture. Full training for all those involved in the recruitment of employees and involved in the HR function of your business is recommended.

The Home Office can undertake pre and post-application audits to ensure the business’s policies and systems are sufficient to meet its obligations under the licence. Preparation for an audit is key as non-compliance with the conditions of the sponsor licence can result in the suspension or loss of the licence.

Given the time involved in securing a licence and the fast moving nature of many businesses’ rolling recruitment programme, we are speaking to many businesses who are making the decision now to secure their licence. The licence is valid for 4 years once granted and will take a business through the difficult Brexit period. Provided that all required policies and processes are in place, the renewal process at the end of the 4 year period is straight forward.

If you need help and support in securing a sponsors licence, or would like to arrange training on Brexit preparation or on any of the matters raised above, please contact Emma Brooksbank or Arshia Hashmi.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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