We are a SME – what are the budget considerations for a Sponsor Licence application?

09 Jul 2024, 55 mins ago

Small and medium-sized enterprises drive both the dynamism and competition that sustain towns and cities across the UK, due to their day-to-day engagement with the communities that they serve.

They are also the financial backbone of the UK economy. As the UK faces stagnant productivity, international shocks, supply-chain issues and a nationwide skills shortage, investing in overseas talent can be a means to maintain your company profile and grow your business. But as an SME one of the biggest questions is usually…

What about the costs?

The costs associated with a Sponsor Licence can sometimes make prospective sponsors apprehensive about making an application, especially amidst a cost-of-living crisis, high inflation, supply chain bottlenecks, and rising energy costs. To simplify the process, we have outlined the primary costs below:

Type of licenceFee for small / charitable sponsorsFee for medium or large sponsors
Temporary Worker£536£536
Worker and Temporary Worker£536£1,476
Add a Worker licence to an existing Temporary Worker licenceNo fee£940
Add a Temporary Worker licence to an existing Worker licenceNo feeNo fee

Beyond the initial Sponsor Licence fees, SMEs should also consider other budget aspects when planning to sponsor overseas talent:

1. Visa Application Costs: Each sponsored worker will need to apply for a visa. The fees for Skilled Worker visas can range from £625 to £1,423, depending on the length of stay and whether the role is on the shortage occupation list.

2. Immigration Health Surcharge (IHS): Sponsored workers must pay the IHS, which is currently £624 per year. This fee grants access to the UK’s National Health Service.

3. Salaries: The minimum salary for a Skilled Worker visa is generally £38,700 per year or the going rate for the job, whichever is higher. Ensure your budget accommodates these salaries to attract and retain skilled workers.

4. Authorising Officer Costs: The Authorising Officer in your company, responsible for managing the sponsor licence, must be a permanent employee. This role can add to your operational costs, especially if you need to hire or reallocate staff.

5. Operational Costs for Startups: Startups may face additional operational costs, including setting up HR systems to manage sponsorship compliance, training staff on visa regulations, and possibly legal advice to ensure compliance with immigration laws.

How Do I Know Which Fees Apply to My Business?

The type of licence fees you will need to pay depends on whether your business is classified as small/charitable or medium/large. The Home Office uses three main criteria to determine this classification:

1. Annual Turnover: Small businesses have an annual turnover of £10.2 million or less.

2. Total Assets: Small businesses have assets worth £5.1 million or less.

3. Number of Employees: Small businesses employ 50 people or fewer.

The Criteria for a Small/Charitable Business

According to the Home Office, a small business must meet at least two of the following conditions:

  • An annual turnover of £10.2 million or less.
  • Assets worth £5.1 million or less.
  • 50 employees or fewer.

Charitable sponsors are defined as organizations registered with the relevant bodies in England, Wales, Scotland, or Northern Ireland.

Budgeting for a Sponsor Licence application as an SME involves more than just the initial fees. It requires a comprehensive look at all associated costs, from visa fees and health surcharges to salaries and operational expenses. By understanding these costs and planning accordingly, you can make an informed decision that supports the growth and sustainability of your business.

If you need further advice on budgeting for a Sponsor Licence or any other immigration-related matters, our team at Gherson is ready to help. Contact us for expert guidance tailored to your specific needs.

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, or send us an e-mail. Don’t forget to follow us on XFacebookInstagram, 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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