Recent updates on recoverable costs for UK Sponsor Licence holders from employees

The UK immigration landscape has undergone a significant shift to reflect the commitment given in the Written Ministerial Statement of 28 November 2024 to prohibit employers from passing specific sponsorship costs onto employees. This change reflects the government’s resolve to ensure fairness in the sponsorship process. The Home Office has updated its guidance to enforce these rules from 31 December 2024 onwards.

Employers sponsoring Skilled Workers must shoulder certain costs themselves. These include:

• Sponsor Licence fees and associated costs

From 31 December 2024, businesses cannot pass on the costs  in relation to Sponsor Licence fee or related administrative expenses, such as priority service fee. This prohibition also applies to applications that are submitted to add the Skilled Worker visa route to an existing licence.

• Certificate of Sponsorship (CoS) fees

The update now confirms that the fees associated with assigning certificates of sponsorships on or after 31 December 2024 must also be covered by the employer and cannot be recouped from the employees.

These changes align with the existing prohibition on sponsors passing the Immigration Skills Charge (ISC) to their sponsored workers.

However, it is important to note that employers may still be able to pass on other immigration-related expenses to migrant workers, such as visa application fees, Immigration Health Surcharges and fees incurred on behalf of the migrant worker’s dependants, etc.

What happens if you, as a Sponsor Licence holder, violate these rules?

Failure to comply with these new requirements can have severe consequences. If you, as an employer, is found to have passed on prohibited costs, the Home Office can revoke your Sponsor Licence/ refuse your licence application if they come to know that you attempted to/you have, if fact, recouped the prohibited costs from your employees.

Losing a Sponsor Licence can lead to:

• Financial losses: Significant costs associated with finding alternative solutions or losing access to skilled talent.
• Disruption for sponsored workers: Current sponsored employees may need to secure new sponsorship or leave the UK, causing workforce instability.
• Inability to apply for another licence: Depending on your particular circumstances, you may not be able to apply for and obtain a Sponsor Licence for another entity that you hold.

 Actions for employers

To ensure compliance and avoid the risks of non-compliance, employers should act promptly:

1. Review and update policies
   Evaluate and amend internal immigration and employment policies to reflect the new rules.
2. Review and update agreements
   Revisit employment contracts and related documents, ensuring clauses on sponsorship costs align with the new requirements.
3. Budgetary planning
   Consider the financial implications of these changes and adjust recruitment and sponsorship budgets accordingly.

Updated: 14 January 2025

How Gherson can assist

Gherson’s Immigration Team are highly experienced in advising on UK visa matters. If you have any questions arising from this blog, please do not hesitate to contact us for advice, send us an e-mail, or, alternatively, follow us on X, Facebook, Instagram, or LinkedIn to stay-up-to-date.

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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