While recent changes to the UK’s skilled worker route have made it impossible to issue new sponsorship to chefs, the Home Office has also been raising the temperature for licensed sponsors across all sectors. Can you stand the heat, or should you get out of the kitchen? 

The benefits of holding a licence to sponsor overseas staff have been obvious to employers seeking to build and develop their workforce for a number of years – and in particular since Brexit made recruitment from mainland Europe such as challenge.  

For a long time, the Home Office dished out sponsor licences like they were sweets in a jar.  Absent serious scrutiny, employers were lulled into a false sense of security when it came to their sponsor duties. By 2025 the landscape has clearly changed.  

Our experience with new and existing licences is the same: vastly-increased compliance activity by government which has led to many initial applications being refused, and existing licences suspended or revoked. In this piece we take a look at the key battlegrounds that sponsors need to be aware of, and the steps they can take to give them the best chance of securing a licence and of keeping it. 

Key to understanding the Home Office’s new-found enthusiasm for targeting licence-holders is its published guidance – in particular Part 3 Guidance covering sponsor duties and compliance. It is worth noting at the outset the overarching principle that sponsorship is a privilege, not a right. Sponsors are expected to act in a way that is conducive to the public good, comply with immigration, employment and all other relevant laws, and prevent abuse of the system.  

Next, Under Section C9 of Part 3 Guidance, the Home Office may suspend a licence if it believes a sponsor is breaching its duties. Crucially, this can be based on suspicion alone. Suspension is usually considered a neutral act pending investigation, but in this context it freezes recruitment, damages reputation, and creates uncertainty for already sponsored workers. There is no requirement for prior notice or engagement. Sponsors are left in limbo. Should suspicion alone justify such disruption?  This is not a significant concern of the Home Office it seems. 

Section C10 outlines the grounds for revocation. These are many, ranging from serious breaches (e.g. knowingly employing illegal workers) to administrative lapses such as not keeping records appropriately or failing to report changes promptly. Revocation is final. There is no right of appeal. Judicial review is a remedy of limited value, the courts allowing the Secretary of State a wide margin of appreciation in her decision-making. Sponsored workers will have their visas curtailed. The business will be barred from reapplying for a licence for 12–24 months.  

There then follows in Part 3 Guidance a long list of instances where a sponsor licence will – will normally – or may – be revoked.  

Annex C1 – Circumstances in Which the Home Office WILL Revoke a Sponsor Licence 

This annex outlines mandatory revocation grounds. If any of these apply, the Home Office must revoke the licence. Key triggers include: 

1. Illegal Employment 

• Employing a worker who does not have the right to work in the UK. 
• Assigning a Certificate of Sponsorship (CoS) to someone not eligible under the route. 

2. Criminal or Immigration Offences 

• Sponsor or key personnel convicted of a relevant offence (e.g. fraud, money laundering, immigration offences). 
• Sponsor is found to have facilitated sham marriages or human trafficking. 

3. Dishonesty or Deception 

• Providing false information in the licence application or during compliance checks. 
• Using deception to obtain a licence or CoS. 

4. Failure to Co-operate 

• Obstructing Home Office compliance visits. 
• Refusing to provide requested documentation. 

5. Repeated Non-Compliance 

• Breaches that have occurred before and were previously sanctioned (e.g. downgrading or suspension), but have not been rectified. 

These are non-negotiable grounds. If proven, revocation is automatic. 

Annex C2 – Circumstances in Which the Home Office Will NORMALLY Revoke a Sponsor Licence

This annex covers discretionary but strongly weighted grounds. Revocation is the expected outcome, but not mandatory. Examples include: 

1. Failure to Fulfil Sponsor Duties 

• Not reporting changes in sponsored workers’ circumstances. 
• Poor record-keeping (e.g. missing right-to-work checks, contact details). 
• Failure to monitor attendance or immigration status. 

2. Non-Compliance with Wider UK Law 

• Breaches of employment law, health and safety, or tax obligations. 
• Failure to pay the Immigration Skills Charge. 

3. Inappropriate Behaviour 

• Conduct not conducive to the public good (e.g. discriminatory practices, abusive behaviour). 
• Association with individuals or entities that pose reputational risk. 

4. Personnel Concerns 

• Key personnel (Authorising Officer, Level 1 User) found to be unsuitable or linked to previous revoked licences. 

5. Failure to Improve 

• Sponsors downgraded to a B-rating who fail to meet the requirements of their action plan within the specified timeframe. 

Revocation under Annex C2 is likely, but sponsors may be given a chance to respond or rectify issues (subject to the difficulties raised by a suspension mentioned above). 

Annex C3 – Circumstances in Which the Home Office MAY Revoke a Sponsor Licence 

This annex outlines optional revocation grounds, where the Home Office has full discretion. These are typically used when the breach is less serious or isolated, but still concerning. Some are particularly subjective, and therefore difficult to counter. Examples include: 

1. Minor or Technical Breaches 

• Late reporting of changes. 
• Incomplete records that do not indicate deliberate non-compliance. 

2. Failure to Respond to Requests 

• Not replying to Home Office correspondence within required timeframes. 
• Delays in providing requested documents. 

3. Concerns About Genuine Vacancy 

• Role offered to the migrant does not appear genuine or necessary. 
• Evidence suggests the role was created solely to facilitate immigration. 

4. Insolvency or Business Closure 

• Sponsor enters administration, liquidation, or ceases trading. 
• Sponsor fails to notify the Home Office of these changes. 

5. Change in Circumstances 

• Significant changes to business structure (e.g. mergers, takeovers) not properly reported or managed. 

Revocation under Annex C3 is not automatic and may depend on the sponsor’s response, history, and willingness to rectify issues. 

Sponsors, therefore, are expected to meet high standards—but are often given little guidance on what “appropriate” compliance looks like.  We have seen a significant uptick in the use of interviews alongside compliance visits – either in person or online – in recent months. Authorising Officers and a business’s sponsored workers should be ready to answer long lists of questions, posed by Home Office officials who generally have little knowledge of how a business is run. Preparation for such compliance action is key.  

The result? A system that feels more punitive than collaborative. The idea of the sponsor licence regime being a partnership with government appears long-gone. The current enforcement model is very adversarial. It may be time to ask: 

• Are suspensions and revocations being used proportionately? 
• Should sponsors have a right to appeal or independent review for such significant decisions? 
• Is the guidance clear enough to support compliance? 

What Sponsors Can Do Now 

In this climate, prevention is better than cure, and the team at Latitude Law can help. Sponsors should: 

• Conduct regular internal audits 
• Log into the Sponsor Management System regularly, even if you don’t currently sponsor anyone 
• Maintain meticulous records around recruitment and personnel 
• Report changes promptly via the SMS 
• Seek legal advice early—especially if contacted by the Home Office 

The Home Office has turned up the heat, but sponsors don’t have to get burned. With the right systems, support, and awareness, employers can navigate this tougher environment and continue to benefit from international talent. 

At Latitude Law, we’re helping sponsors stay compliant, challenging unfair decisions and advocating for a fairer, more proportionate system. If you’re facing suspension or revocation—or want to future-proof your licence—get in touch by calling 0300 131 6767 or completing our online enquiry form and we will get back to you.