UK-based companies holding a sponsor licence gain the privilege of sponsoring foreign employees under immigration routes such as Skilled Worker or Global Business Mobility. However, the Home Office emphasizes in its published guidance that the ability to sponsor migrant workers is regarded as “a privilege, not a right.” A company is only granted a sponsor licence if the Home Office is convinced that it is currently compliant or will comply with the numerous duties and responsibilities associated with holding such a licence.

When applying for a sponsor licence, it is crucial for a company to showcase its capability to adhere to sponsor duties and assure the Home Office that it will continue to do so if the application is approved. This becomes even more critical if the company has previously faced a refusal for a sponsor licence application or, more significantly, if it had a licence that was revoked. In such cases, the Home Office scrutinizes a fresh application more closely, and the company must consider additional factors, including the possibility of a cooling-off period.

Companies are not always free to apply for a sponsor licence without restrictions. In certain situations, they may be subjected to a “cooling-off period”—a specific timeframe during which a successful application is not possible. Applying during a cooling-off period results in an automatic refusal, without any discretionary review.

A cooling-off period might be imposed under the following circumstances:

• A previous application for a sponsor licence has been rejected.
• A previously held sponsor licence has been revoked (or surrendered during compliance action with the intent to avoid revocation).
• The company has been issued with a civil penalty from a specified list.
• An individual associated with the company has been convicted of a criminal offence from a specified list.

A cooling-off period is not solely applicable to the company, individual, or legal entity directly involved in the refusal, revocation, civil penalty, or conviction.

Instead, it can extend to various individuals associated with the business, including:

• Owner
• Director
• Key Personnel or individuals proposed for key roles (such as Authorising Officer, Key Contact, Level 1 User)
• Individuals actively involved in the day-to-day operations of the business

Therefore, it is crucial to verify that no person linked to the business in any of these capacities is currently under a cooling-off period. If any such individual is subject to such a restriction, it would result in the refusal of the Sponsor licence application.

The duration of a cooling-off period for a sponsor license application varies depending on the specific reasons for its imposition.

If a previous sponsor license application was rejected and it falls under certain conditions, there won’t be a cooling-off period. These conditions include situations where the application was submitted by a representative, where you couldn’t provide requested documents or information due to factors beyond your control, or if your application for a Scaleup route license was denied solely because you don’t meet the criteria of a ‘qualifying Scale-up sponsor.’

However, if your previous sponsor license application was refused and none of the aforementioned conditions apply, you will be subject to a cooling-off period lasting 6 months.

In cases where you previously held a sponsor license that was revoked (or surrendered during compliance action to avoid revocation), the typical cooling-off period is 12 months. The same 12-month cooling-off period applies if you received a civil penalty for employing an illegal worker, or multiple civil penalties for renting residential premises to an adult without the right to rent. Any outstanding civil penalties must be fully paid before submitting a new application.

If there are multiple civil penalties and charges, a cooling-off period of up to 5 years may be imposed. The length of this period depends on various factors, including the number and amount of penalties, the involvement of illegal workers or disqualified adults, cooperation with the Home Office or relevant authorities, prompt payment of fines, and compliance with any agreed-upon installment payments. As before, full payment of civil penalties is required before a new application can be made.

Penalties or charges related to carrying clandestine entrants, transporting passengers without proper documents, or bringing passengers to the UK in violation of an authority to carry scheme automatically result in a 5-year cooling-off period.

If multiple circumstances mentioned above are applicable, the longest relevant cooling-off period will be enforced.

If you have confirmed that your business is not currently subject to a cooling-off period or that any relevant cooling-off period has lapsed, you can proceed to submit a new sponsor licence application. It’s important to note that the ability to apply doesn’t guarantee automatic approval. On the contrary, a successful application requires a thorough presentation demonstrating that all sponsorship requirements are met.

A crucial aspect of this process involves addressing and showcasing that the reasons for any previous refusal or revocation are no longer applicable. For instance, if the Home Office had concerns about the adequacy of your HR systems in monitoring migrant workers’ activities, you must outline the specific changes made to address these concerns. It’s likely that the Home Office may conduct a compliance visit as part of the application evaluation.

In the event that your fresh application is refused, there is a risk of facing another cooling-off period. However, by submitting a comprehensive and meticulous application that clearly illustrates compliance with sponsor licence requirements, you can mitigate this risk. The key is to demonstrate the improvements and changes made in response to any past issues, increasing the likelihood of a successful outcome.

The refusal or revocation of a sponsor license can have significant adverse effects on a business, both in the immediate and long-term. It is crucial to exercise caution and undertake necessary measures to maximize the likelihood of success for the new application. Contact our UK immigration Law experts for specialized guidance and support concerning a sponsor license application on +44 203 773 2948 or [email protected]