Sponsor licence revoked? A survival guide for UK employers

In 2025, over 3,000 UK sponsor licences were revoked. In 2026, the same pace continues.

A perfectly filed folder is useless if your employee describes their job duties differently from the SOC code you assigned.

This is why businesses can find themselves facing Home Office compliance action despite having apparently “compliant” personnel files. The disparity between your internal operations and the declarations you make in your Sponsor Management System (SMS) is where many compliance risks arise.

Today’s sponsor licence compliance is less about maintaining a stack of HR files and more about building a system where your records, payroll, HR processes, and day-to-day operations all tell the same story.

If your HR system does not mirror your everyday operations, you may have a compliance problem.

Why paperwork isn’t enough

Paperwork is only the beginning of a Home Office compliance visit. Officers can interview sponsored workers to establish whether their day-to-day duties are consistent with the role described on their Certificate of Sponsorship (CoS).

The paperwork blueprint: Appendix D

To remain compliant, you must treat Appendix D as a non-negotiable legal requirement. Every sponsored worker needs a dedicated HR file containing:

• Identity: passport and immigration status documentation.
• Contractual terms: employment contracts matching the role, hours and salary recorded for sponsorship purposes.
• Recruitment: evidence of the recruitment process where required.
• Qualifications: evidence of professional registrations or qualifications required for the role.
• Absence records: detailed records of leave and absences, including information required for SMS reporting.
• Payroll: payslips and payment records demonstrating that the worker is being paid in accordance with the terms of their sponsorship.

The key issue is not simply whether these documents exist. They must accurately reflect what is happening within the business.

Right to Work (RTW) checks

Right to Work checks are a fundamental part of an employer’s compliance responsibilities.

To ensure your RTW process is compliant, you should:

• Check: use the appropriate Home Office online checking service or permitted document-checking process for the worker’s immigration status.
• Verify: establish that the person presenting the documentation is the person to whom it relates.
• Record: retain a clear record of the check, including the date it was completed.
• Follow up: where permission to work is time-limited, diarise the appropriate follow-up check before the permission expires.

In most cases, the initial RTW check must be completed before the employee starts work. Employers should also have a reliable system for monitoring time-limited immigration permission.

The “non-genuine” allegation

The Home Office can scrutinise whether sponsored roles are genuine and whether sponsored workers are actually carrying out the duties for which they were sponsored.

If the reality of the job does not match the role described on the CoS, this can create a significant compliance risk.

For example, problems can arise where:

• The employee’s actual duties differ substantially from the sponsored role.
• The role has changed without the necessary consideration of sponsor reporting requirements.
• The employee cannot explain what they actually do.
• Internal records contradict the information provided to the Home Office.
• The role appears to have been created primarily to facilitate immigration permission.

Automating accountability

Manual tracking is prone to human error.

Sponsor licence holders need systems for monitoring matters such as:

• Sponsored workers’ immigration permission
• Right to Work checks
• Absences
• Salary and payroll
• Changes to employment
• Contact details
• Work locations
• Reporting deadlines
• Required personnel records

Moving towards a structured or automated HR system can make it easier to identify upcoming deadlines and maintain an audit-ready record.

When HMRC and payroll records expose problems

Payroll is another area where inconsistencies can create serious compliance concerns.

Your sponsorship records, employment contract and payroll should tell the same story.

If the salary actually being paid differs from the salary declared for sponsorship purposes, or if working arrangements have changed without the appropriate action being taken, this can create a compliance issue.

Employers should therefore regularly review sponsored workers’:

• Salary
• Hours
• Job duties
• Work location
• Employment status
• Absences

against the information held in their sponsorship records.

The question during an audit is ultimately simple:

Does what you told the Home Office match what is actually happening inside your business?

Don’t wait for a Home Office compliance visit

Sponsor licence compliance is much easier to address before you receive an audit notice, suspension letter or revocation decision.

A proper compliance review should look beyond whether your HR files contain the right documents. It should test whether your SMS records, CoS information, employment contracts, payroll, Right to Work checks and actual working practices all align.

At Visa Positive, we can conduct a sponsor licence compliance review or mock Home Office audit to identify potential weaknesses in your current systems.

This can be particularly valuable if:

• You have recently received a Home Office compliance notice.
• Your business has grown significantly since obtaining its sponsor licence.
• You have multiple sponsored workers.
• Employees’ roles, salaries or working locations have changed.
• Your HR systems have changed.
• You have never conducted a formal sponsor licence compliance audit.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Sponsor licence duties and Home Office guidance can change. If you have received a suspension or revocation notice, obtain specialist advice promptly.