Sponsor Licence Suspension: Why The Home Office Takes Action

Sponsor Licence Suspension terrifies most UK employers, and with good reason. When the Home Office suspends your sponsor licence, your sponsored recruitment pipeline effectively stops, and your wider immigration risk profile comes under direct scrutiny.

This guide explains the legal and operational triggers behind Sponsor Licence Suspension in 2025, the most common Home Office compliance failures, and how to respond in a structured, defensible way. It also sets out how to prevent sponsor duties breaches before they reach suspension level.

What is Sponsor Licence Suspension?

Sponsor Licence Suspension occurs when the Home Office temporarily switches off your licence while it investigates serious concerns about your compliance as a sponsor.

During suspension:

• You usually cannot assign any new Certificates of Sponsorship (CoS).
• The Home Office may also block the use of some unused CoS. 
• Existing sponsored workers normally keep their current permission during the investigation, unless very serious risk arises. 

Suspension sits in the middle of the enforcement ladder.

Importantly, the Home Office can suspend first and decide later whether to reinstate, downgrade or revoke your licence. 

The Legal Framework Behind Sponsor Licence Suspension

The Home Office sets out sponsor duties and enforcement powers in the official Workers and Temporary Workers: Guidance for Sponsors, particularly Part 3 – Sponsor duties and compliance. 

Under this framework, UKVI can suspend a licence where it believes any of the following apply:

• You have committed serious or systemic sponsor duties breaches.
• Your conduct poses a risk to immigration control.
• Information suggests illegal working, non-genuine roles, or exploitation.
• You failed to improve after earlier warnings, a B-rating or an action plan.

The guidance allows suspension even without a prior downgrade where the concerns appear serious enough.

Main Reasons For Sponsor Licence Suspension

In practice, most suspensions follow a pattern. A cluster of Home Office compliance failures builds up over time, then a compliance visit or data check exposes the full picture.

Below are the most frequent reasons for sponsor licence suspension, grouped by theme. Each group reflects common sponsor duties breaches seen in audits.

1. Right To Work Check Failures

Right to work checks sit at the heart of the regime. Repeated or serious failures often trigger immediate action.

Typical issues include:

• No right to work check for some staff.
• Checks carried out after employment starts.
• Expired visas not followed up.
• Copies of documents missing mandatory details, such as dates and signatures.

Because illegal working is a core immigration control risk, repeated failings here can justify direct suspension.

2. Record Keeping And HR System Failures

The guidance expects sponsors to hold specific documents and run robust HR systems that track sponsored staff. 

Red flags include:

• Missing contracts, payslips, or contact details for sponsored workers.
• No reliable absence tracking system.
• No central log of visa expiry dates.
• HR teams unable to show how they monitor immigration status in real time.

When records appear inconsistent, UKVI may conclude that other, deeper breaches likely exist.

3. Reporting Failures On The Sponsor Management System

Sponsors must report specific events about sponsored workers and the business within strict deadlines. Common Home Office compliance failures include:

• Late or missing reports of late start dates, absences, or job changes.
• Unreported reductions in salary or hours.
• Unreported changes to ownership, trading address, or key personnel.

Where reporting failures look systematic, the Home Office can treat them as serious sponsor duties breaches that justify suspension.

4. Non Genuine Or Non Compliant Roles

UKVI focuses heavily on whether sponsored roles are genuine and compliant with salary and skill rules. Problems often arise where:

• The actual day to day role does not match the SOC code or job description.
• Staff work in much more junior roles than the CoS suggests.
• Salary falls below the applicable threshold for the route.
• Staff undertake very different duties across multiple sites without clear oversight.

These issues suggest misuse of the system and can be treated as threats to immigration control.

5. Salary, Hours And Working Conditions Breaches

Beyond genuineness, the Home Office also checks whether:

• Sponsored workers receive at least the salary stated on the CoS.
• Overtime, unpaid leave, or reduced hours affect salary integrity.
• Staff work excessive hours or patterns inconsistent with the visa route.

If reality diverges from the sponsored position, UKVI may view this as a material breach of sponsor duties.

6. Illegal Working, Exploitation And Public Good Concerns

Certain findings can quickly move a case from downgrade territory to suspension or revocation. These include:

• Deliberate illegal working, including non sponsored staff.
• Withholding passports, or restricting movement in concerning ways.
• Evidence of labour exploitation, sham self employment, or cash wage practices.
• Links to wider criminality or serious regulatory non compliance.

Here, public good concerns dominate UKVI’s decision making, and suspension often precedes swift revocation.

7. Immigration Skills Charge And Fee Abuses

Sponsors must not pass certain Home Office fees to migrant workers, including the immigration skills charge. Risky practices include:

• Charging workers for the immigration skills charge or CoS.
• Requiring large “deposits” refundable only after years of service.
• Deducting immigration costs from wages in a way that undercuts salary thresholds.
• Recouping the immigration skills charge from workers after the company has paid it.

Such arrangements can undermine the sponsorship system and lead directly to enforcement action.

What Happens After A Sponsor Licence Suspension?

Once the Home Office decides to suspend, the process usually follows a predictable path.

1. The Suspension Notice

You receive a written notice that:

• Sets out the proposed action, such as suspension and possible revocation.
• Lists the concerns and alleged breaches in detail.
• Confirms the impact on your ability to sponsor workers.

2. The 20 Working Day Response Window

You normally have 20 working days to send written representations and evidence that address each concern. During this period you should:

• Analyse every allegation carefully.
• Identify factual errors and provide counter evidence.
• Accept any genuine issues and show credible remediation.
• Prepare a clear, structured response that aligns with the guidance.

The Home Office can also collect extra information during this period, including follow up visits. 

3. Possible Outcomes After Investigation

After reviewing your response and any further evidence, UKVI can:

• Reinstate your licence with an A-rating.
• Reinstate with a B-rating and issue a sponsor action plan.
• Maintain some restrictions on your CoS allocation.
• Revoke the licence completely.

Where a B-rating applies, you must pay a sponsor action plan fee. In 2025 this fee is £1,579, payable within 10 working days. Failure to pay or comply with the action plan usually leads to revocation.

Practical Example

A care provider repeatedly failed right to work checks, kept poor records, and underpaid several sponsored carers. A compliance visit uncovered the problems. The Home Office suspended the licence, then revoked it when the provider failed to offer convincing remedies.

Operational And Financial Impact Of Suspension

Even if you eventually keep your licence, suspension usually carries heavy consequences.

Key impacts include:

• Inability to sponsor new workers, affecting growth plans and live vacancies. 
• Risk of visa curtailment for existing sponsored staff if revocation follows. 
• Increased HR and legal costs to remediate systems and respond to UKVI. 
• Reputational damage with staff, unions, regulators, and investors.

For larger employers, studies suggest indirect costs from disruption can run into tens or hundreds of thousands of pounds over time. 

How To Respond If Your Licence Is Suspended

Time and structure matter. A scattered response can undermine even strong underlying evidence.

Follow these steps as soon as you receive a suspension notice.

Step 1: Stabilise And Nominate An Internal Lead

• Notify the board, HR leadership, and legal team immediately.
• Nominate a senior owner for the response, ideally someone with authority and understanding of HR operations.

Step 2: Secure Specialist Legal Support

Because suspension places your licence at real risk, external immigration specialists usually add strong value. They can:

• Interpret the Home Office letter within the context of the guidance.
• Identify where the evidence falls short of revocation thresholds.
• Shape a response that aligns with UKVI expectations and language.

Step 3: Complete A Rapid Internal Compliance Audit

Within the 20 working day window, you should run a focused audit that:

• Tests right to work checks for all staff.
• Reviews HR files for every sponsored worker.
• Checks SMS reports against real life events and documents.
• Maps actual duties and salaries against the CoS and SOC codes.

Summarise findings in a clear schedule that you can share with UKVI, highlighting both issues and fixes.

Step 4: Implement Immediate Remedial Steps

When you identify real mistakes, you should act quickly and document every step.

Examples include:

• Correcting SMS entries and late reports as far as possible.
• Updating HR processes, templates and training materials.
• Fixing underpayments or contract errors.
• Removing non compliant practices around fees or deductions.

The Home Office looks closely at how sponsors respond once concerns arise.

Step 5: Draft And Submit Structured Representations

Your written response should:

• Address every allegation in order, using headings that mirror the UKVI letter.
• Distinguish between factual disagreements and accepted errors.
• Attach clear evidence bundles, indexed for easy review.
• Explain governance changes that will prevent repeat issues.

You should send the response within the 20 working day deadline unless UKVI has granted more time in writing. 

Preventing Sponsor Licence Suspension: A Practical Compliance Framework

Sponsors that avoid suspension tend to treat compliance as a continuous programme, not a one off exercise. Consider adopting a simple three pillar framework.

Pillar 1: People

• Appoint a senior Sponsor Compliance Lead with board access.
• Ensure Key Personnel understand their roles and escalation routes.
• Train HR, payroll, and line managers on sponsor duties at least annually.

Pillar 2: Process

• Maintain a written Sponsorship Policy and a detailed right to work procedure.
• Use standard checklists for onboarding, variation, and leaver processes.
• Map every sponsor duty to a specific owner and process step.

Pillar 3: Technology And Monitoring

• Use systems that track visa expiries and right to work documents.
• Run monthly reports on sponsored staff salaries and hours.
• Schedule periodic internal audits, and record findings with remedial actions.

A documented compliance framework can strongly support your position if UKVI ever reviews your licence.

When To Seek Specialist Legal Support

Early advice often changes the trajectory of a case. You should seriously consider engaging a specialist business immigration team when:

• You receive any Home Office warning or action plan.
• You expect a compliance visit and already know of past issues. 
• You hold a complex group structure, multiple sites, or high turnover of sponsored staff.
• You have concerns about potential historic breaches, including fee practices or job genuineness.

Specialists can help you triage risk, design remedial plans, and present a credible narrative to UKVI.

Frequently Asked Questions on Sponsor Licence Suspension

1. Does a Suspension Always Lead to Revocation?

No. Many sponsors keep their licence after suspension, especially where:

• Breaches are historic rather than ongoing.
• Systems improve quickly, with strong evidence.
• The response explains context and mitigation credibly.

However, serious or repeated breaches can still lead to revocation even after a detailed response. 

2. What Happens to Our Sponsored Workers During Suspension?

During suspension, sponsored workers normally keep their current visa permission. If the licence is later revoked, UKVI will usually curtail their visas, often giving 60 days to find a new sponsor or leave the UK. 

3. Can We Still Assign New Certificates of Sponsorship?

In most cases, you cannot assign new CoS while the licence remains suspended. UKVI may also restrict use of unused CoS. You regain full CoS rights only if the licence returns to an A-rating.

4. How Much Does a Sponsor Action Plan Cost in 2025?

If UKVI downgrades your licence to a B-rating with an action plan, the sponsor action plan fee in 2025 is £1,579. You must pay within the deadline, currently 10 working days, or you risk losing the licence. 

5. Can We Appeal a Sponsor Licence Suspension?

There is no formal tribunal appeal. Instead, you respond through written representations and evidence during the 20 working day window. You may also challenge decisions by judicial review in suitable cases, usually with specialist legal support.

6. How Often Do Home Office Compliance Visits Lead to Suspension?

Most visits do not lead to suspension. However, suspension becomes much more likely where the visit reveals:

• Systemic right to work failures.
• Non genuine roles or salary manipulation.
• Poor records and repeated late reporting.

Strong preparation and internal mock audits reduce that risk significantly.

Talk To Our Sponsor Compliance Team

If your business faces Sponsor Licence Suspension, time and strategy matter more than ever. Our specialist business immigration team can:

• Run a rapid sponsor health check and evidence review.
• Help you stabilise live immigration risk for key staff.
• Draft detailed, compliant representations that address Home Office concerns.
• Design a forward looking compliance framework that supports future growth.

For focused, practical advice on Sponsor Licence Suspension and wider sponsor compliance, contact A Y & J Solicitors today and protect your ability to hire and retain international talent.