Will I face compliance action if I don’t report students who don’t attend?

There is no need to report students who do not attend as long as the absence is authorised by you. In regards to compliance action for continuing to sponsor students who do not attend due to the crisis, the Home Office have said that ‘[They] recognise the current situation is exceptional and will not take any compliance action against students or employees who are unable to attend their studies/work due to the coronavirus outbreak, or against sponsors which authorise absences and continue to sponsor students or employees despite absences for this reason.’ Helpfully, UKVI has also confirmed that more Tier 4 sponsors can offer distance learning than would ordinarily be permitted.