Publish date

22 December 2020

Business immigration changes

Following the end of the UK-EU transition period on 31 December 2020, a new system of business immigration will be in place to govern how businesses recruit staff from abroad. It will apply to all immigrants whether they are from the European Economic Area or from further overseas.

From 1 January 2021, any business that wants to employ individuals from overseas must have obtained a sponsorship licence and any overseas employees must be assigned a certificate of sponsorship.

We consider below how businesses obtain a sponsorship licence and what happens once the licence is issued.

Worker licences

There are two different types of licences available: a worker licence and a temporary worker licence.

A worker licence will allow businesses to employ individuals on a permanent or longer term basis, and encompasses visas for skilled workers and intra-company transfers.

A temporary worker licence, in a rather self-explanatory manner, allows companies to employ people on a more temporary basis and covers a number of things such as charity workers (up to a year), and seasonal workers coming to the UK to work on farms for up to six months.

How do I become a sponsor?

The application process to become a sponsor must be completed on the website, which contains more details about the process. Around 80% of applications are completed within 8 weeks of application and you may be given the option to expedite your application to 10 working days at a cost of £500.

The business will have to make use of the sponsorship management system (SMS) which will be the main tool for managing use and businesses interaction with the system. As part of the application process you will need to identify the individuals who will be occupying three key roles and are therefore responsible for the business’ interaction with the system:

  • The authorising officer – this must be a senior and competent individual who is responsible for the actions of staff and representatives who use the SMS;
  • The key contact – this individual will be the main point of contact for UK Visas and Immigration (UKVI); and
  • A level 1 user – this is the individual responsible for all day-to-day management and use of the SMS.

All three roles can be occupied by the same individual, and at least one level 1 user must be a ‘settled worker’ in the UK. You will also be apply to assign some employees as level 2 users who will have more restricted access to the system.

The cost of the application depends on the type of licence and size of the business in question. Smaller businesses with annual turnover less than £10.1m and fewer than 50 employees will pay a lower fee.

What happens once I become a sponsor?

If your application has been successful you will be granted a sponsor licence. This will initially be graded ‘A’, but may be downgraded to a ‘B’ licence if you do not meet your sponsor duties.

If your licence is downgraded, then you will have 10 days to pay a £1,476 fee and receive an action plan from UKVI or your licence will be revoked. You may only receive two B-grade ratings in the 4 years your licence is valid, or you will lose your licence and have to wait at least 12 months to reapply.

The licence is used to apply for certificates of sponsorship to each foreign worker you employ. This is applied through the SMS, and then the worker must use this certificate when applying for their visa within three months of its issue. Different types of certificates will be required for different types of workers, details of which certificates apply can be found on the government website.

Certificates are free for citizens of most EEA countries, however for citizens of all other countries the cost is £199. There may also be an additional Immigration Skills charge (ISC) when you assign a certificate of sponsorship to someone applying for a Skilled Worker visa or an Intra-Company transfer visa. There are some exceptions to this including exclusions for a number of industries, but generally the ISC tends to apply when someone is applying for a VISA from outside the UK to work in the UK for 6 months or more, or inside the UK for any length of time.

The amount of the charge is again dependent on the size of the business and the length of time the worker will be in the UK for, however for a large business sponsoring someone for the maximum length of 5 years the charge will be £5,000.

The new system is likely to be a big change for a lot of employers, however if you do require specific advice then feel free to get in touch with us to explore how we can assist.

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