Last month, we reported on the Government's crackdown on visa abuse and exploitation. As part of this, the Home Office has now updated its guidance in respect of the costs that employers are prohibited from recovering or attempting to recover from sponsored workers.
With effect from 31 December 2024, employers cannot recoup or attempt to recoup by any means the following costs.
- Certificate of Sponsorship (CoS) fee (currently £239 per period of sponsorship, increasing to £525 from 11 February 2025) where the CoS was assigned on or after 31 December 2024; and
- Skilled Worker sponsor licence application fee and the 'associated administrative costs of [the] sponsor licence application'. The reference to 'associated administrative costs' is somewhat unclear, but the Home Office has specified this includes premium service fees in respect of obtaining a sponsor licence. We are seeking further clarification from the Home Office on this point and will update you as we learn more.
It was already prohibited to pass on the Immigration Skills Charge (ISC) levy payable for sponsoring a worker (currently £369 for small sponsors and £1,000 for medium/large sponsors, in each case per year of sponsorship requested). This has not changed. Costs relating to the individual's immigration/visa application can still be passed on as before.
Employers should ensure that any new clawback agreements entered into are drafted to be compliant with the new guidance. In addition, they should review and update any existing clawback agreements so that they are compliant with the new restrictions from 31 December 2024.
It is worth noting that contracts, P60s and company bank account statements are routinely reviewed by the Home Office in sponsor compliance checks. If a sponsor is found to have recouped or attempted to recoup any of the costs above, it will normally result in their sponsor licence being suspended or revoked. Therefore, this guidance has the potential to have a real detrimental impact on businesses who do not take it seriously.
Two further key changes to sponsorship rules have come into force from 31 December 2025.
- The latest guidance prohibits sponsoring any worker in a personal capacity as personal staff to a director or employee. This is intended to prohibit nannies, chefs and other personal staff being sponsored by senior executives under a company sponsor licence where the employee provides a service to the executive and not to the company. Transitional arrangements for existing sponsored employees in relevant positions looking to extend or apply for settlement have not yet been announced.
- There is also a new requirement that at least one 'primary' Level 1 User, having full access to the Home Office's online sponsorship licence platform (the Sponsorship Management System, or 'SMS'), is an employee, director or partner of the organisation and a settled worker – previously, these two requirements could be met separately by different individuals with Level 1 User access. Employers with a sponsor licence must ensure their SMS users meet this requirement moving forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
