How to challenge a civil penalty for illegal working: objections, appeals and deadlines

Receiving a civil penalty notice for illegal working – even though you may feel that you have done nothing wrong – can be both deeply upsetting and infuriating. The financial cost can be devastating, with fines reaching up to £60,000 for every illegal worker. Penalties are not always final, however, with the law providing clear routes to challenge them. In order to protect your business it is essential to understand the process, the grounds on which challenges can be made and the deadlines involved.

The growing scale of enforcement

The Home Office has significantly increased its enforcement efforts in the recent months. Since 5 July 2024, illegal working visits have risen by around 40% and arrests are up by 42%. In the final quarter of 2024 alone, almost 500 civil penalties were issued to employers, covering 771 illegal workers, with fines totalling just under £30 million. These figures highlight the increased risk of penalties for employers and emphasise how crucial it is to act swiftly and strategically if you receive a notice.

First steps after receiving a notice

When a civil penalty notice arrives, the first thing to understand is that you have only a limited period of time in which to respond – normally just 28 days. Within this period, you must decide whether to object to the fine or make the payment.

An objection is your opportunity to submit arguments against either your liability or the amount of the fine. Employers often rely on the following three main defences:

1. The individual in question was not employed by them;
2. They carried out the prescribed right-to-work checks and therefore have a statutory excuse; or
3. The penalty has been wrongly calculated or assessed without proper regard to mitigating circumstances.

If you accept liability and acknowledge that you have employed illegal workers, you may choose to pay the fine. The Home Office offers a 30% discount if the penalty is settled in full within 21 days. For some businesses, this can be a pragmatic way of drawing a line under the issue. For others, particularly where there is a good reason to believe that the penalty was wrongfully issued, it may be advisable to challenge it.

What happens after you object?

If you submit an objection to the penalty, the Home Office will review your case and issue a so-called Objection Outcome Notice. This will confirm whether your penalty has been cancelled, reduced or upheld. However, it should be emphasised that in some cases the review may actually lead to the fine being increased. If the penalty is maintained, you will have a short window, usually 21 days from the date of the outcome notice, to make the payment.

The risks of inaction

Ignoring a civil penalty notice or missing deadlines can have serious consequences. The Home Office can enforce payment through the courts, and the company directors may face disqualification. Businesses that operate under a sponsor licence risk reputational damage and may find their future applications refused. The Home Office also publishes the names of employers fined for illegal working, creating lasting negative publicity.

Conclusion

Challenging a civil penalty for illegal working is possible, but the process is tightly bound by deadlines and requires a clear understanding of the available legal grounds on which a challenge could be based. Whether your best course of action is to pay or appeal, Gherson’s timely professional advice can make the difference between a successful outcome and a penalty that undermines both your finances and your business reputation.

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The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please do not hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.

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