Licence Under TIER 2, Tier 4 & Tier 5

Any employer who wishes to employ an overseas national, from outside the European Economic Area (EEA), is required to ‘sponsor’ them under Tier 2 of the Points Based System and must therefore obtain a sponsor licence from the Home Office.

Any education provider that wishes to enrol an overseas student from outside the EEA is required to ‘sponsor’ them under Tier 4 of the Points Based System and must also obtain a sponsor licence from the Home Office.

There are various requirements for various types of establishment that need to be fulfilled before a sponsor licence will be granted by the Home Office.

Who can apply for the licence?

Any establishment in the UK can make an application, if they are considering sponsoring overseas nationals to work in the UK (TIER 2) or if they wish to become a sponsor for Temporary workers (TIER 5) or if they wish to enrol students in their educational establishments (Tier 4).

In order to become a licensed sponsor the establishment concerned must be a genuine organisation or sole trader operating legally in the UK.  In respect of employers, there is no requirement of a minimum turnover or number of staff.  There must be no evidence that the organisation is a threat to immigration control – the Home Office will look at the history and background of the organisation and its key personnel.  The organisation must nominate a ‘level 1 user’, a ‘level 2 user’, a ‘key contact’ and an ‘authorising officer’ to operate the sponsorship management system.  The organisation must be able to comply with its sponsor duties by showing the necessary human resources systems are in place.  All the required supporting documents must be submitted with the application and the organisation must meet the additional requirements for the tier and category they are applying under.


A prospective sponsor applying for a licence needs to pay a fee to the Home Office for considering its application.  If registering as a Tier 2 sponsor only for the first time, the fees are £1476 for large establishments and £536 for small sponsors or sponsors with charitable status.  (A small sponsor is one that that qualifies as a small company in accordance with the Companies Act 2006.)

If a sponsor already has a licence and is applying to add more tiers to its licence the fees are considerably less (and nil in a lot of cases).

Procedure after submitting the application

Prospective sponsors make an application for a licence by registering online on the Home Office website and filling out the online application.  The applicant sponsor must then print off the submission sheet and send it to the Home Office with the fee and the required original supporting documents.  This can only be done by a person authorised to make this application as legal representatives cannot make this application on behalf of prospective sponsors.

The Home Office will consider the application under the specified criteria, making any necessary checks, and consider whether they need to visit the business premises of the applicant or require further documentary evidence before making their decision.

Once the Home Office approves the application, a sponsor licence will be issued to the establishment giving them an A or B rating.  If the application is refused there is no right of appeal but the prospective sponsor can reapply at any time.  The licence will be valid for 4 years and the establishment must renew the licence if they wish to continue to be a sponsor.

  • A Rating: This rating will be given to those establishments who fulfil all the licence requirements of the HR systems and compliance and pose little or no risk to the aims of managed migration.  Sponsors having an A rating will be able to exercise all aspects of sponsorship and employers will also be able to certify its prospective employees for maintenance purposes. This means that its employees (overseas) will not be required to show maintenance funds themselves in their application if they have been sponsored by an A rated employer who certifies maintenance
  • B Rating: This rating is given to an establishment which poses a risk to the aims of the managed migration as it has some failings in its HR systems or compliance, or both.  A B-rated sponsor cannot assign any Certificates of Sponsorship to a new migrant until they have signed up to the sponsorship action plan.  For a fee of £1,000, the Home Office will provide a sponsorship action plan for a B-rated sponsor which gives guidance on how it can improve its HR systems and/or compliance in order to be given an A rating.  If the B-rated sponsor meets the conditions of the action plan it will be upgraded to an A rating.  If a sponsor ultimately fails to comply with the action plan its licence will be revoked.  (An A rated establishment can be downgraded to a B rating if the Home Office considers there has been some non-compliance).

Once a license is issued with an A rating, a sponsor will then be able to issue Certificates of Sponsorship/Confirmations of Acceptance for Studies to its prospective employees or students respectively who will then need to use the certificate to obtain leave to remain or entry clearance in line with the certificate.

Persons Involved in the Sponsorship Process

A prospective sponsor must allocate responsibilities to ‘key personnel’ in its staff in the following four roles: authorising office; level 1 user; level 2 user and key contact.  These roles can be filled by the same person or by different staff members.

  • Authorising officer - this must be a paid member of staff or an ‘office holder’ of the organisation.  The person should be a senior and competent person in the establishment as they will be responsible for the activities of all users of the sponsorship management system.  They have ultimate responsibility throughout the process of applying for a licence and also in issuing sponsorships to the prospective employees of the establishment.  This person is responsible for all acts, omissions, compliance and non-compliance performed by the following three personnel:-
  • Key Contact - this can be the authorising officer, any other person working for the company or even a legal representative (an OISC registered advisor or a solicitor).  As the name suggests, this is the person who will act as the main point of contact between the sponsor and the Home Office
  • Level 1 User - this can be the authorising officer, any other person working for the company or even a legal representative.  This person conducts the day-to-day sponsorship activities using the sponsorship management system, assigns Certificates of Sponsorship/Confirmations of Acceptance for Studies and keeps the Home Office informed of any changes and ‘migrant activity’ (e.g. if a migrant does not run up for work or studies)
  • Level 2 User - This can be the authorising officer, any other person working for the company or even a legal representative. This person`s activities are limited to assigning certificates/CASs and to reporting migrant activity to the UK Border Agency

Certificate of Sponsorship/ Confirmation of Acceptance for Studies (CAS)

These are virtual documents with a unique reference number rather than a paper certificate or a document, issued by registered sponsors.  They will be issued by the sponsor once the relevant requirements are complied with.  The migrant needs to provide the reference number in their application for leave to enter or remain.

A Certificate of Sponsorship is assigned by Tier 2 sponsors, i.e. employers.  It is valid for three months and if the prospective employee does not use the certificate, it will automatically become invalid and the sponsor will need to re-issue the certificate.

A Confirmation of Acceptance for Studies (CAS) is assigned by Tier 4 sponsors, i.e. education providers.  It is valid for six months and if the prospective student does not use the CAS, it will automatically become invalid and the sponsor will need to re-issue the CAS.

Resident Labour Market Test

Subject to the exceptions set out below, if a registered employer want to sponsor a migrant from outside the EEA the employer will have to conduct a Resident Labour Market Test and show that no suitable qualified resident worker can fill the job.  In order to conduct the Resident Labour Market Test the sponsor will have to properly advertise the position for a minimum of 28 calendar days in Jobcentre Plus (with certain limited exceptions) and by using one other method stated in the relevant codes of practice (unless there is no code of practice for the job).  There are certain requirements in respect of the advertisements which have to be met.

The employer does not need to undertake a Resident Labour Market Test if:

  • The job is on the Home Office ‘shortage occupation list’
  • The overseas worker is an existing worker having already been employed by the company at for at least 6 months at the time of their application but only if the worker is on a Tier 1 (Post-Study Work) visa (or under IGS, FT:WISS or SEGS)
  • The job has a gross annual salary of at least £150,000
  • The worker is a Postgraduate Doctor or Dentist who needs further permission to stay under Tier 2 (General) so they can complete further speciality training
  • The establishment is sponsoring an existing employee working for an overseas branch (i.e. Intra-Company Transfer).

Once the Resident Labour Market Test has been completed and no suitable resident worker found, the sponsor is free to offer the job to the migrant worker and assign a Certificate of Sponsorship, subject to the other Tier 2 requirements.

We can advise and represent our clients throughout this procedure.

What services we can offer?

We can advise on the procedure for applying for a sponsor licence

  • We can act as the Key Contact or Level 1 User or Level 2 User of the establishment
  • We can be in direct contact with the Home Office with regards to assigning certificates of sponsorship and keep them updated on behalf of our client (the employer) regarding any changes or migrant activities
  • We can make representations to increase the limit of the sponsorship certificates, if there is a genuine need
  • We can assess the job and the applicant and advise on the likelihood of getting the applicant sponsored under Tier 2
  • We can advise and represent our clients in making their leave to remain/entry clearance applications in line with the certificate of sponsorship
  • We can advise and represent our clients’ dependants to seek dependant visas in line with the visa of the main applicant.
  • We can lodge an appeal (in-country only) or make a request for an administrative review if the applicant`s application is refused
  • We can advise in making applications for indefinite leave to remain (ILR) for those who have already completed their five years’ qualifying period in the UK

Whatever the case, we are here to assist, advise and represent our clients in relation to obtaining the licence, maintaining the licence, upgrading the licence and also in relation to the immigration matters of its existing or prospective workers.

For further information and free assessment please contact us.

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