Sponsor Licence Revoked? Next Steps for the UK

When a sponsor licence is revoked by the Home Office, it indicates serious breaches of compliance, resulting in the immediate removal of authorisation to sponsor new or current migrant employees.

For increasing numbers of employers in the UK, across all areas of the economy, their sponsor licence has become operationally critical.

A sponsor licence is the mandatory approval from the UK Home Office that allows employers to legally hire skilled workers from overseas. With ongoing skills and labour shortages, a sponsor licence has become operationally critical for increasing numbers of UK employers, allowing them to recruit internationally to fill vacancies.

While securing a licence is a feat in itself, retaining the licence requires ongoing effort and expertise. Failure to comply with these requirements can lead to significant and unwanted consequences, including licence suspension or revocation, which can severely impact business operations, workforce stability and reputation.

This article provides comprehensive insights into the reasons why a sponsor licence might be revoked, the impact of enforcement action on employers, and the steps to take to manage the situation and resolve the issue.

Section A: Has Your Sponsor Licence Been Revoked?

If you’ve received formal notification from the Home Office that your company’s sponsorship licence is at risk of revocation, your next steps will be crucial in determining the resulting impact on your business.

A revoked sponsor licence means your organisation has lost its permission to lawfully employ sponsored workers across all sponsorship visa categories. It is a highly damaging, punitive measure, impacting an organisation’s operations and resulting in curtailed visas for its sponsored employees, who must then find employment with another sponsor or leave the country.

Following a sponsor licence revocation, the organisation will also be prohibited from applying for a new licence for a specified cooling off period, which in most cases is 12 months from the date the sponsor licence was revoked.

Licence revocations are extremely daunting for sponsors and must be handled effectively to maintain any potential for reinstating the licence and avoiding further punitive action.

Given the severe implications of a sponsor licence revocation, it will be important to take immediate legal advice on your options.

You will be required to respond to the notification within the given timeframe, taking into account the grounds for revocation, as stated by the Home Office in the notification letter.

Any decision you make in terms of next steps should be well-informed and based on a specialist assessment of all the facts and circumstances. Any response you make to the Home Office must be evidence-based and should address the allegations that have been made against the organisation.

In some circumstances, it may make better financial and commercial sense to accept the revocation and use the cooling-off period to address the issues that have resulted in the licence being revoked.
This could include developing and implementing HR processes and procedures to ensure compliant practices are in place, as well as delivering training to all relevant internal personnel. Any application for a new sponsor licence will need to evidence that the previous revocation grounds have been corrected and any new licence would be compliant and managed as required by the rules.

Our sponsor licence and compliance specialists are highly experienced with a strong track-record in helping organisations deal with a revoked sponsor licence. To discuss your options and next steps, contact us.

Section B: What Does a Sponsor Licence Revocation Mean?

Having a sponsor licence revoked is one of the most severe enforcement actions that the UK Home Office can take against a business that employs migrant workers. It means that the Home Office has identified serious breaches in the company’s compliance with the sponsorship rules and obligations.

1. Why Sponsor Licences are Revoked

As a sponsor licence holder, you are required by law to meet a number of duties in relation to the management of your sponsor licence.

The Home Office takes a vigilant approach to immigration enforcement and has powers to revoke a sponsor licence where the organisation has failed to comply with its immigration compliance duties or to engage actively with the Home Office.

Revocations can be used by the Home Office in many different circumstances and usually result from the failure of the sponsor to address issues raised following a sponsor licence suspension or where employers have acted fraudulently and provided false information in their licence application, CosS allocation or on the sponsorship management system.

Poor record keeping is a common breach, particularly if personnel records relating to sponsored workers are not kept up to date.

Failure to notify the Home Office of changes in circumstances – relating both to migrant employees and the organisation – can also trigger punitive action, as can inconsistencies in information relating to the sponsored roles, such as salary and job duties, which should be consistent with the details given on the COS.

Revocations can also result when an employer has failed to follow the stipulated action plan following a licence downgrade to a B rating.

2. Difference Between Sponsor Licence Suspension and Revocation

It is important to differentiate between a suspension and a revocation.

Suspension is a temporary measure taken when the Home Office identifies potential non-compliance or risks that need further investigation. During this period, the business cannot issue new Certificates of Sponsorship but may still employ current sponsored employees. A suspension allows time for the company to address the issues, demonstrate compliance, and potentially restore its full sponsorship status.

Revocation is a more serious and final decision following evidence that the business has failed to meet the required standards after an investigation or has committed significant breaches. Revocation results in the immediate loss of the ability to sponsor any new or existing employees. Unlike suspension, revocation is not reversible, and the company must reapply for a new licence if eligible, often after a cooling-off period.

[Insert table 1: Comparison of Suspension vs. Revocation]

3. Impact of Sponsor Licence Revocation on the Employer

When a sponsor licence is revoked, it means that the Home Office has permanently removed the business’s ability to sponsor migrant workers. Unlike a suspension, where a business still holds the licence pending an investigation, a revocation is final and cannot be reversed through negotiation. The company is immediately stripped of its sponsorship rights, and its details are removed from the public Register of Licensed Sponsors.

The company loses its capacity to employ sponsored workers, which can disrupt projects, affect productivity, and lead to potential financial losses. Clients and partners may also lose confidence in the business’s reliability and compliance standards, damaging its reputation.

4. Impact of a Revoked Sponsor Licence on Employees

Sponsor licence revocation can also have immediate and serious consequences for the organisation’s sponsored workers and those it is in the process of recruiting.

Migrant workers sponsored by the company face immediate uncertainty. The Home Office may curtail their visas, usually allowing a short grace period of up to 60 days for them to find a new sponsor or make alternative visa arrangements.

A revoked sponsor licence will also impact recruits who have been offered a sponsored role but have not yet started with the company or are still outside the UK.

If a sponsored recruit has been issued a visa but has not yet travelled to the UK, the Home Office will usually cancel their visa once the sponsor licence is revoked, meaning they will not be able to enter the UK to begin employment with the company.

Recruits who have been issued a Certificate of Sponsorship (CoS) but have not yet applied for a visa will see their CoS become invalid. Without a valid CoS, they will not be able to apply for a visa to enter the UK.

5. Can You Appeal a Revoked Sponsor Licence?

There is no right of appeal against a decision to revoke a sponsor licence. However, depending on the case’s circumstances, there may be grounds to seek a reversal of the decision or for a Judicial Review.

Our sponsor licence specialists have particular expertise in advising on the merits of seeking a reversal or applying for a Judicial Review, guiding sponsors through the process.

Where these options are not available or appropriate, the organisation would be subject to a cooling-off period before it can apply for a new licence.

Section C: When Are Sponsor Licences Revoked?

Licence revocation is typically the final step, often following previous warnings or enforcement actions from the Home Office. Common triggers for a licence revocation include:

1. Following Home Office Inspection

One common trigger for revocation is a Home Office inspection, either announced or unannounced. These audits aim to assess whether a business is meeting its sponsorship obligations.

[Insert table 7: Types of Home Office audit]

Inspectors review documents, interview HR staff, and assess the systems in place for monitoring sponsored employees.

If severe breaches are found—such as missing right to work checks, incomplete records, or undocumented changes in employee roles or salaries—this can lead to immediate revocation.

2. Following a Licence Suspension

Another common situation that may lead to revocation is a previous suspension. When a sponsor licence is suspended, it signals serious concerns about the business’s compliance with Home Office standards. The suspension is intended as a chance for the business to address identified issues, often with a set timeframe and guidance on the necessary improvements.

If the sponsor fails to meet these requirements or the Home Office determines that insufficient action has been taken, revocation becomes a likely outcome.

Failure to follow an action plan issued by the Home Office is another trigger. In some cases, the Home Office may allow the business to maintain its licence on the condition that it implements a specific action plan to address compliance gaps. These action plans typically cover critical areas such as right to work checks, record-keeping, and reporting duties. If a business fails to follow the steps outlined in the action plan or fails to meet key deadlines, this can lead to more severe enforcement action.

Section D: Common Reasons for Sponsor Licence Revocation

The UK Home Office has strict regulations and standards that businesses must adhere to in order to sponsor migrant workers. Failing to meet these expectations can lead to enforcement action, such as licence revocation for the most serious of breaches.

Common grounds for revocation include:

1. Non-Compliance with UK Home Office Regulations

One of the most significant reasons for licence revocation is non-compliance with the regulations set by the UK Home Office. These rules cover a wide range of responsibilities, from maintaining appropriate workplace practices to ensuring that all sponsored activities align with legal standards. Non-compliance can include failing to respond adequately to Home Office requests or not meeting the requirements during a compliance audit. Sponsors must have well-documented procedures that demonstrate their adherence to all regulatory standards to avoid this risk.

2. Failure to Maintain Accurate Records and Reporting Duties
Maintaining thorough and up-to-date records is an essential duty for all sponsor licence holders. The Home Office mandates that businesses keep comprehensive records of all their sponsored employees, including personal details, work history and visa information.

The Sponsorship Management System (SMS) must also be kept up to date. This also means reporting any significant changes, such as a change in the worker’s job role, salary or work location, to the Home Office within a specific timeframe.

Failure to fulfil these duties can lead to serious breaches, making record-keeping errors one of the primary reasons for revocation.

3. Issues Related to Right to Work

All UK employers are required to comply with the prevention of illegal working duties. Put simply, this means conducting compliant right to work checks on all workers to verify that they have the relevant permission to do the job on offer. Employing non-eligible workers, either knowingly or through oversight, is a major compliance breach that can lead to the revocation of a sponsor licence. This includes situations where businesses employ workers who do not have the correct or valid visas or who have conditions on their right to work.

4. Breaching Sponsorship Duties
Sponsorship duties encompass a range of obligations that businesses must fulfil to retain their sponsor licence. These duties include ensuring that sponsored workers are employed in accordance with the terms of their visa, reporting any significant changes in a timely manner, and preventing abuse of the sponsorship system.

Common breaches can include employing a worker in a role that differs from the one specified in the sponsorship application or failing to monitor the attendance and absences of sponsored employees.

5. Poor Engagement with the Home Office

Revocation of a sponsor licence is the most severe enforcement action taken by the Home Office, and it typically follows earlier attempts to prompt the sponsor to address compliance breaches. Home Office communications and warnings must not be ignored. Importantly, you must ensure the Home Office has your most up to date contact details so that communications are received by the appropriate contact in the organisation.

Positive engagement with the Home Office can often help a business resolve issues and also avoid reaching the stage of revocation. Even if a licence is ultimately revoked, constructive engagement with the Home Office can demonstrate that lessons have been learned and help to show compliance issues have been resolved, potentially supporting a more favourable outcome for the business.

Section E: Actions to Take if Your Sponsor Licence is Revoked

A revoked sponsor licence is a significant and stressful event. The immediate aftermath requires quick, strategic action to mitigate damage, protect business interests, and support affected employees.

Step 1: Assess the Home Office’s Grounds for Revocation

The first step after receiving notification of sponsor licence revocation is to carefully review the communication from the Home Office. The notice will outline the specific reasons behind the revocation and the evidence they have based their decision on.

It is essential to understand these reasons fully as they will guide your next steps and inform you of any possible appeal.

Businesses should pay close attention to whether the breaches involve record-keeping failures, compliance issues, or more severe breaches such as employing ineligible workers. Understanding the nature and scope of these violations helps you determine the most effective response.

Step 2: Take Advice and Review Your Options

Once you have assessed the Home Office’s decision, seeking professional legal advice is highly recommended, given the implications of losing the licence.

Our sponsor licence and compliance specialists can advise on the options open to you in light of the severity of the alleged breaches, the number of sponsored employees that will be affected – as this may be relied on as mitigation to challenge the revocation – and your conduct and that of the Home Office during any investigations.

Your options could include challenging the Home Office’s conduct during the process, seeking a reversal of the decision or reapplying for a new sponsor licence:

a. Home Office Conduct & Procedural Breaches

When the Home Office decides to revoke a sponsor licence, it must follow specific procedural rules to ensure the decision is fair, transparent, and legally sound. These rules include giving the sponsor clear reasons for revocation, detailing the compliance breaches found, and providing evidence that supports its decision. Any deviation from these procedural requirements could provide grounds to challenge the revocation.

We will review the process followed by the Home Office to determine whether the correct procedure was followed and whether the decision was made in accordance with the relevant rules. Issues could include lack of evidence, failure to give adequate notice or general procedural errors.

If it can be shown that the Home Office did not adhere to procedural requirements, there may be grounds to challenge the decision. Options include requesting an Administrative Review if procedural errors are evident or, in some cases, pursuing a Judicial Review to question the legality of the decision. A judicial review is particularly helpful if there are strong grounds to argue that the revocation was unfairly handled. Our advisers are highly experienced in pursuing procedural challenges in relation to sponsor licence revocations.

b. Reversal

Our experts will assess your case by considering a range of factors which could help to justify a reversal of the Home Office’s decision. For example, from the details given by the Home Office, are they justified in taking the most severe of enforcement measures against your business? If your sponsor licence is revoked, what will be the full impact on your business and the wider economic implications on job security for other non-sponsored workers? Are there any factual errors which can be challenged and corrected through evidence? Where non-compliance is not disputed, how will you rectify the issues?

We support employers in building a strong and compelling response to the Home Office by interviewing members of staff, preparing statements, collating documents, and obtaining documents from other government agencies, such as HMRC, to be able to respond to the allegations that have been made.

c. Applying for a new licence

If the best course of action is to apply for a new licence, the employer should use the cooling-off period to rectify compliance issues and bring the organisation up to the required standards. Training for staff and robust record-keeping will also be essential to include within the new application.

[Insert table 8: Potential Next Steps after a Revoked Sponsor Licence]

Step 3: Communicate with Affected Employees

Revocation of a sponsor licence directly impacts sponsored employees, as their visas may be curtailed, typically giving them a limited timeframe (e.g., 60 days) to find a new sponsor or leave the UK.

Inform affected employees as soon as possible after the revocation, explaining the situation clearly and being empathetic to their situation, as this will inevitably be devastating news to them.

Outline what has happened and reassure them that the business is taking immediate steps to address the issue.

Offer support such as legal assistance or referral services to help employees understand their options for securing alternative employment or visa arrangements, and share updates as the situation develops.

Section F: Applying for a New Sponsor Licence

Applying for a new sponsor licence is not a simple process; it requires a detailed understanding of the issues that led to the revocation, a robust action plan to address those shortcomings and full compliance with Home Office regulations. This means taking strategic and comprehensive steps to recover their sponsorship privileges.

1. Timeline and Process for Reapplying for a Sponsor Licence

Reapplying for a sponsor licence after revocation typically involves a mandatory cooling-off period. In most cases, this will be a period of 12 months, although the exact duration can vary based on the severity of the non-compliance issues that led to the revocation.

During this time, businesses must focus on addressing any compliance gaps and preparing a thorough reapplication.

Steps for the reapplication process include:

Step 1: Assessing Previous Failures: Review the reasons for the initial revocation and ensure all identified issues have been rectified. Typically, this involves an audit exercise to address all areas of non-compliance.

Step 2: Preparation Period: Use the cooling-off period to implement improvements in compliance practices and documentation.

Step 3: Submitting the Application: Complete and submit a new application for the sponsor licence via the UK Home Office portal. Ensure all required fees are paid.

Step 4: Awaiting Decision: The processing time for a new application can range from a few weeks to several months, depending on the volume of applications and complexity of the case.

2. Compliance Measures

Compliance measures should be strengthened to include:

a. Regular Audits

Establish periodic reviews of HR processes and compliance practices. For reapplication, an audit report demonstrates to the Home Office that the business has taken compliance seriously and has established robust systems to prevent future breaches. It provides a concrete record of measures such as improved HR practices, regular internal checks, and updated staff training—all actions that show lessons have been learned and weaknesses addressed.

b. Training for Relevant Personnel

Ensure staff responsible for sponsorship are fully trained and understand the Home Office regulations. This may mean including personnel outside of the HR department, such as those involved in recruiting and managing sponsored workers.

Training should cover the full scope of the requirements, including the specific duties and responsibilities that come with holding a sponsor licence.

Ongoing refresher courses should also be provided to ensure all relevant personnel stay updated on regulatory changes.

c. Robust Reporting Systems

Implement digital tools or systems to maintain accurate and up-to-date records of sponsored employees.

These systems should be designed to track and record key information such as right to work documentation, visa expiry dates, job roles, salaries, work locations and any changes in employment conditions. These systems reduce the risk of human error and facilitate faster, more accurate responses during audits or in response to Home Office enquiries.

3. Tips to Improve the Chances of Approval

To improve the likelihood of approval, businesses must demonstrate that significant improvements have been made since the revocation. Key strategies include:

a. Enhanced Record-Keeping Practices

Develop and maintain comprehensive employee records that comply with Home Office standards. This includes proof of right-to-work checks and updates on employment changes.

b. Compliance Training and Protocols

Establish mandatory training for HR and management staff involved in sponsorship duties. Document this training to show a proactive approach to understanding and adhering to compliance obligations.

c. Detailed Action Plans

Submit an action plan with the application that outlines the steps taken to address the issues that led to the previous revocation.

Section G: How to Maintain Compliance and Avoid Future Revocations

Once a sponsor licence has been secured, maintaining compliance is critical to avoiding future revocations and ensuring the continuity of employing skilled migrant workers. The UK Home Office holds sponsors to high standards, and any breach of these can lead to severe consequences, including licence suspension or revocation.

HR practices form the backbone of compliance for sponsor licence holders. Maintaining thorough, organised, and accessible records ensures that a company can respond effectively to Home Office audits, which may be unannounced. Key strategies include:

[Insert table 2: Checklist for Maintaining Compliance]

1. Comprehensive Employee Record-Keeping

Keep accurate and up-to-date records for all sponsored employees, including right-to-work documents, contact details, job roles, salaries, and any changes in their employment status. This information should be securely stored but easily retrievable during an audit.

2. Automated Tracking Systems

Invest in HR software that can automate the tracking of key dates such as visa expirations and required reporting timelines. Automation minimises the risk of human error and ensures that the business stays on top of important deadlines.

3. Regular Compliance Audits

A compliance audit is an in-depth review of a business’s processes and practices to ensure adherence to UK Home Office requirements for sponsor licence holders.

The audit should assess key areas such as the SMS, employee records, right to work documentation and reporting procedures, highlighting any gaps or deficiencies in the organisation’s compliance efforts.

For businesses facing licence revocation, a compliance audit is especially valuable as it identifies specific areas of non-compliance and provides a clear framework for corrective action.

Read more about our compliance audits here >>

4. Regular Training for HR Staff on Compliance Requirements
Training is essential to ensure that all relevant staff understand their roles and responsibilities in maintaining compliance. Without proper training, HR and management teams may unintentionally overlook key obligations.

[Insert table 6: Training Schedule for HR Staff on Compliance]

Develop a structured training plan for all HR staff and managers involved in the sponsorship process. This should include initial training when they take on the role and regular updates as regulations change.

Take part in webinars and seminars conducted by immigration experts to stay informed about changes in sponsorship laws and compliance expectations. Our programme of free webinar training is here.

Create detailed guides and resources that outline the procedures and policies related to sponsorship. Make these resources easily accessible to staff and ensure they are updated regularly.

5. Ongoing Review of Sponsorship Obligations
Compliance is not a one-time task; it requires consistent effort and a proactive approach. Regularly reviewing sponsorship obligations helps businesses stay aligned with Home Office standards and ensures that any adjustments needed are promptly made.

Conduct thorough quarterly reviews of all sponsorship-related activities, ensuring that any updates in Home Office regulations are integrated into company practices.

Appoint a compliance officer or a dedicated team responsible for monitoring and managing the company’s adherence to sponsorship duties. This team should act as a liaison with the Home Office and be accountable for all compliance-related documentation.

Regularly check the attendance and performance of sponsored employees to ensure they are fulfilling the terms of their visas. Report any significant changes, such as job role changes, salary adjustments, or unauthorised absences, to the Home Office within the stipulated timeframe.

Section H: Summary

When a sponsor licence is revoked by the UK Home Office, it has significant and immediate implications for employers and their sponsored workers.

A revocation indicates severe non-compliance with sponsorship duties, such as failing to maintain accurate records, not adhering to right to work checks, or employing non-eligible workers. This action results in the permanent removal of the employer’s ability to sponsor migrant workers and leads to the company’s name being removed from the list of licensed sponsors.

The most direct impact is on business operations; employers lose the capacity to recruit or retain skilled international employees, potentially leading to gaps in their workforce. Current sponsored employees may have their visas curtailed, usually within a 60-day period, causing uncertainty and possible job loss for those individuals. This can disrupt projects, damage productivity, and affect team morale.

Licence revocation is also damaging to the employer’s reputation, impacting relationships with clients, partners and employees. In practical terms, revocation can also invite further Home Office scrutiny in the future, making it more challenging to reapply for a new licence after the cooling-off period.

Employers must address these consequences swiftly by assessing compliance failures, supporting affected employees, and seeking legal advice. Implementing corrective measures and reinforcing internal policies is essential to rebuilding trust and ensuring compliance in preparation for potential future reapplication.

Section I: Need Assistance?

DavidsonMorris’ team of specialist UK immigration lawyers bring substantial experience in advising companies facing a sponsor licence revocation.

We can help by:

a. Assisting with understanding the grounds for revocation
b. Advice on collating the supporting evidence
c. Advice on building a response that factors in wider business and economic implications of a revoked sponsor licence
d. Advice on remedial steps to address areas of non-compliance
e. Support in engaging with UKVI
f. Advice and support in relation to Home Office site visits including follow-up guidance
g. Advice on the merits of challenging the decision under Judicial Review

Speak to our sponsor licence specialists for advice on your specific circumstances and the options available to you to deal with a revoked sponsor licence.

Section J: FAQs

What is the difference between a sponsor licence suspension and revocation?
A suspension is a temporary measure imposed when the Home Office identifies potential non-compliance that requires further investigation. During a suspension, a business cannot sponsor new employees but may continue employing current sponsored workers. A revocation, however, is permanent and results in the complete loss of the sponsor licence, halting all sponsorship capabilities.

What happens if my sponsor licence is revoked?
Should your licence be revoked, any pending sponsored visa applications from potential employees or existing sponsored employees will be refused, and your existing sponsor workers’ leave will be curtailed. You will lose permission to recruit and employ workers from all visa categories under the licence and the organisation will be removed from the register of sponsors.

Can a business continue to operate after its sponsor licence is revoked?
The business can continue operating, but it cannot employ or sponsor migrant workers. This situation can lead to operational disruptions, particularly if a significant part of the workforce consists of sponsored employees who may need to leave the UK after their visas are curtailed.

Can you appeal a licence revocation?
There is no right of appeal against a decision to revoke a sponsor licence. In limited circumstances, there may be grounds for Judicial Review of the revocation decision.

Can I apply for a new sponsor licence after a revocation?
Following a sponsor licence revocation, the organisation will be prohibited from applying for a new licence for a specified cooling-off period. In most cases, this would be 12 months, but can extend to five years if the breach is sufficiently serious.

How long is the cooling-off period before reapplying for a sponsor licence?
The cooling-off period is typically 12 months, though this can vary depending on the specific reasons for the revocation. This period should be used to address any compliance failures and prepare for a reapplication.

Section K: Glossary

Insert: table glossary

Section L: Additional Resources

UK Government Guidance on Sponsorship
https://www.gov.uk/government/collections/sponsorship-information-for-employers-and-educators
This collection provides detailed information for employers and educators on sponsorship policies, the sponsorship management system, and compliance requirements.

Workers and Temporary Workers: Guidance for Sponsors
https://www.gov.uk/government/publications/workers-and-temporary-workers-guidance-for-sponsors-part-1-apply-for-a-licence
This document offers in-depth guidance on applying for a sponsor licence, sponsoring workers, and fulfilling sponsor duties.

Points-Based System: Sponsor Compliance Visits
https://www.gov.uk/government/publications/points-based-system-sponsor-management/points-based-system-sponsor-compliance-visits-accessible
This guidance details the processes and considerations for pre- and post-licence sponsor compliance visits by the Home Office.

Apply for a Sponsor Licence
https://www.gov.uk/apply-sponsor-licence
The official UK government page provides instructions on how to apply for a sponsor licence to employ foreign workers or students.