When Sponsor Compliance Goes Wrong

The High Court has refused permission to judicially review the Home Office’s immediate revocation of a care provider’s sponsor licence, underlining that sponsor compliance obligations are strict and enforceable and that non compliance can swiftly cost sponsors their ability to employ migrant workers.

The facts the Court considered

Geocare Services Ltd is a domiciliary care provider employing 81 staff, including 71 Skilled Worker visa holders. On 23 October 2025, following HMRC data indicating underpayments against the figures recorded on Certificates of Sponsorship (CoS), the Home Office revoked Geocare’s licence with immediate effect. The company sought permission for judicial review and interim relief (requesting suspension rather than revocation), which Mrs Justice Lang DBE refused after a hearing in December 2025. 

HMRC records showed that two named sponsored workers were paid significantly less than the monthly sums derived from their CoS salaries approximately 36% less for one worker and 15% less for another across specified months in 2025. Geocare explained that the shortfall reflected reduced hours (for family and health reasons) plus deductions for transport arrangements the employer substantially subsidised and it admitted it had not reported the changes on the Sponsorship Management System (SMS).

How the Home Office responded

The decision letter relied on the sponsor guidance in force at the time of revocation. It cited the core duties to pay what is stated on the CoS (and meet general/going‑rate thresholds), to report reductions or significant changes and to stop sponsoring if salary requirements cease to be met unless a specific exception applies (e.g., a reduction in pay due to maternity leave sick leave, or a health‑related phased return supported by occupational health). The Home Office concluded that the case fell within Annex C1(aa) of sponsor guidance: circumstances in which it will revoke a licence. Specifically, where the sponsor pays less than stated on the CoS and has not notified the change, or where the reduction is not otherwise permitted. Revocation was therefore imposed immediately. Downgrading was explicitly considered but the Home Office rejected this due to the seriousness of the non‑compliance.

Why the Court agreed with the Home Office

The Court held that the conduct squarely engaged Annex C1(aa). This was not a mere technical breach: there were actual underpayments against the CoS figures and a failure to notify via SMS. These are considered major breaches and, in those circumstances, the guidance frames revocation as the expected outcome.  While some discretion exists, the decision letter showed it had been considered and rationally exercised. Attempts to re‑characterise the case as a minor breach (which might “normally” lead to revocation but leaves more room for downgrading) were rejected.

On arguments that the hourly rate remained compliant or that variable hours are common in the care sector, the Court emphasised that the scheme requires sponsors to ensure the worker’s actual pay meets the salary stated on the CoS and the applicable thresholds and to report any reductions promptly. If a worker’s hours fall such that salary requirements are no longer met and no exception applies the sponsor must cease sponsorship. The Court also rejected submissions that the Home Office had to undertake a broader “global assessment” of impact on staff, clients or the business, noting recent appellate authority that leaves such considerations to the Secretary of State’s discretion unless obviously material. In this case, the decision remained lawful and rational. Permission and interim relief were refused.

Practical lessons for sponsors

• Monitor sponsored staff: If your sponsored workers are paid by the hour, you must ensure they are working enough to earn the amount on the CoS

• The Home Office is increasingly using HMRC data to identify drops in salary and will take enforcement action when they identify this. They do not need to carry out a full compliance audit to revoke a licence

• Any request for information from the Home Office must be taken extremely seriously. This should be viewed as a warning that the licence may be revoked without further notice. If contacted by the Home Office, sponsors should undertake a full internal audit, identify any breaches and disclose these to the Home Office seeking a waiver before the Home Office reaches a decision to revoke the licence

• Report, then adjust: Any reduction in salary or working hours must be reported within the required time limits via SMS. Failure to notify can itself trigger mandatory revocation

• CoS figures are commitments not targets: Paying less than the CoS figure (even where hourly rates look compliant) is treated as underpayment unless a narrowly‑drawn exception applies and is properly evidenced

• Licence at risk = workforce at risk: Revocation typically leads to curtailment of sponsored workers’ permission (often to 60 days), risking loss of staff and service disruption

The bottom line

The Home Office’s stance is: “Sponsorship is a privilege, not a right”. The High Court’s refusal of permission in Geocare Services is a clear reminder that sponsor compliance is non‑negotiable for the Home Office. If sponsors wish to retain their international staff, they must ensure pay matches the CoS, thresholds are met at all times and every relevant change is promptly reported otherwise, immediate revocation is a real and foreseeable outcome.