Key updates to sponsor guidance

Recent updates to the UK Home Office sponsor guidance introduce five important developments

1. A new expectation that sponsors actively inform sponsored workers of their UK worker or employment rights

2. Updates on the recovery of sponsorship costs from a sponsored worker

3. Home Office enhanced scrutiny of closeness of sponsored individuals to sponsor licence holding businesses that sponsor them

4. Increased inter-agency data sharing, monitoring of salary pay cycles and requirement to pay sponsored workers at least quarterly

5. A clarification that right to work checks are not mandatory for certain categories of non-employed individuals, such as contractors and casual workers 

Requirement to inform sponsored workers of employment and worker rights 

As of 6 March 2026, all sponsors are required to ensure their sponsored workers are informed in writing of their UK worker or employment rights, depending on the nature of their contractual relationship with the sponsor. 

By requiring sponsors to take proactive steps to inform sponsored workers of their rights, the Home Office is seeking to reduce worker exploitation and promote fair treatment of migrant workers who may be unfamiliar with UK workplace protections.

This includes, but is not limited to, ensuring that they understand their entitlement to the National Minimum Wage, the Working Time Regulations, pension autoenrolment and opt-outs, entitlement to statutory leave and pay, employer duties under the Equality Act 2010 and how to raise grievances.

Although the guidance does not prescribe a specific format, all sponsors must have human resources systems or processes in place to provide this information to all sponsored workers, and record and retain evidence of when and how the information was communicated to sponsored workers on their recordkeeping files in accordance with the record keeping duties. This could include incorporating information into onboarding materials, issuing written guidance, and signposting workers to official resources such as GOV.UK or ACAS.

We would be delighted to provide further guidance or prepare briefings for staff. Please let us know if you would like this support. 

Recovery of sponsorship costs from a sponsored worker

Sponsors must exercise caution when seeking to recoup costs from sponsored workers, either through loan agreements or clawback clauses. The Home Office has tightened rules on recoupment of costs and strictly prohibits practices that may undermine salary thresholds or exploit migrant workers. Sponsors are prohibited from recouping the following from a sponsored worker by any means:

• Immigration Skills Charge 

• Certificate of Sponsorship fee 

• sponsor licence costs, including the sponsor licence application fee and all administrative costs associated with applying for and maintaining the sponsor licence (eg priority service fee for the sponsor licence application or for making changes  to the sponsor licence or requesting additional CoS)

• legal fees associated with the above (eg for advice/ assistance with applying for/maintaining the sponsor licence, assigning a CoS etc.

Sponsors may recoup: 

• visa application fees

• Immigration Health Surcharge

• biometric appointment fees

• visa application priority service fees

Legal fees may be recoverable where they relate only to the individual’s visa application and not to sponsor advise, however caution must be exercised. If intending to recover legal fees, the worker should be aware of this from the outset, should be informed of the costs and should have the opportunity to select alternative legal representation. Avoiding recovering legal costs wherever possible is recommended. An additional consideration is that payment of any of these costs up front by the sponsor on the worker’s behalf may be considered as a taxable benefit in kind.

This is a complex area of sponsorship and specialist advice should be sought before seeking to recover costs from a sponsored worker. Any agreements to recover costs from a sponsored worker must be carefully considered and drafted to ensure that they are reasonable and enforceable (ie not ‘debt bondage’). This rule covers salary deductions, loans, clawbacks and termination/settlement agreements. It is also essential to note that salary deductions will lower a worker’s salary for the purpose of calculating whether the minimum salary requirement for sponsorship is met. It is therefore essential to ensure that a sponsored worker’s salary exceeds the minimum salary requirement after the salary deduction is taken into account.

New sponsor licence revocation ground: scrutiny of closeness of sponsored individuals to their sponsoring businesses

A new mandatory ground for revocation of a sponsor licence has been introduced. Updated Home Office guidance states that the Home Office will revoke a sponsor licence where it has:

This reflects a broader policy shift towards scrutinising whether sponsorship arrangements are anchored in real trading activity and credible organisational substance, with the Home Office increasingly focused on identifying structures that exist chiefly to enable an immigration outcome rather than genuine employment.

In practice, this change reinforces the Home Office’s intention to lift the lid a tick box approach to compliance (e.g. having a registered entity, PAYE scheme or nominal role) and to interrogate the commercial reality of the business and the role being sponsored. The risk is particularly acute in scenarios involving newly established UK entities, ownermanaged businesses, sponsorship of individuals closely tied to the business (founders, directors, investors etc.) and even previously unchallenged setups including intra-group transfers, or expansion cases where a licence is sought ahead of substantial UK operations will be tested. 

Where a business cannot demonstrate that it is genuinely operating or trading, or that the role is connected to substantive activity, the Home Office may conclude that the licence exists chiefly to facilitate immigration permission and take enforcement action, including revocation of the licence. 

This has important implications for intra-company transfer and wider mobility strategies, especially under the Global Business Mobility routes. While these routes are designed to facilitate legitimate corporate transfers, the updated guidance signals heightened scrutiny of whether the UK entity has sufficient operational footing and whether the transfer reflects a genuine business requirement rather than a vehicle for relocation. Sponsors should therefore ensure that corporate structures, secondee arrangements and expansion plans are robust, well-documented, and aligned with demonstrable UK trading activity, with clear evidence that sponsorship of an individual is a consequence of a UK business need rather than its primary driver.

This update further reiterates the Home Office’s position that sponsor licences are not to be used by individuals simply seeking to find a route to live in the UK, and are only permitted where a business is genuinely operating in the UK and has a real need to sponsor workers. It is essential that all businesses are able to evidence genuine UK operations both when applying for a sponsor licence, and at any time the Home Office may conduct a compliance visit. If you have any concerns about this, please contact us. 

Salary pay cycles, deductions and inter-agency data sharing

New rules effective from 8 April 2026 introduce stricter requirements on how Skilled Workers are paid.

Sponsored workers must now be paid in line with  the frequency stated in their employment contract.  Where payment is not made monthly, it must be  at least quarterly, and each quarterly payment must be no less than one quarter of the worker’s net annual salary. In addition, any pay cycle longer than monthly must be clearly set out in the employment contract, or in a formally agreed and dated variation signed by both parties and retained on file for inspection by the Home Office. These changes are intended to ensure that workers are paid consistently and in accordance with the salary stated on their Certificate of Sponsorship (‘CoS’).

At the same time, data sharing between the Home Office and HM Revenue & Customs now gives both agencies access to near real-time payroll data for sponsored workers and Key Personnel associated with the sponsor licence. This means the Home Office is more likely to identify quickly where a sponsored worker or Key Personnel is underpaid or not paid at the required frequency or has left the organisation. It is therefore essential that any salary reductions or changes to pay frequency are reported promptly to the Home Office where required, to avoid compliance action where there is a legitimate reason for the change (e.g. parental leave or authorised unpaid leave, where permitted).

Please contact us if you have any questions or concerns about these changes for any of your sponsored workers. 

Clarification on right to work checks for non-employees

In 2025, Home Office guidance was updated to indicate that sponsors were required to conduct right to work checks on unsponsored workers that they ‘directly engage’. This created a significant administrative burden by requiring sponsors to conduct right to work checks on every worker that they engage, including partners, directors, contractors, casual workers, agency workers etc irrespective of whether an employment relationship exists. 

The guidance has since been updated and now clarifies that sponsors are not required to complete right to work checks for non-employee personnel unless they are sponsored by the organisation. 

You must still conduct right to work checks for all sponsored workers, regardless of whether they are employees or engaged by you in other capacity and all employees. It is not mandatory to conduct right to work checks for non-employee personnel that are not sponsored. It is recommended that right to work checks are still undertaken for non-employee senior managers in businesses who are as a consequence of the type of organisation in control or actively involved in day to day management eg non-employee Directors, members of a Limited Liability Partnership, or Trustees of a charity.

This clarification does not remove risk entirely in engaging non-employee personnel. Sponsors must remain cautious in determining employment status as if an individual is incorrectly treated as self-employed or a contractor when they are in reality working as an employee, the organisation’s sponsor licence may be at risk of revocation and it may face liability for a civil penalty if that person is found not to have the right to work in the UK. 

Sponsors must therefore remain cautious and: 

• Carefully assess employment status for individuals engaged as contractors or casual workers; 

• Maintain robust contractual documentation where services are provided via third-party entities/agencies;

• Consider conducting right to work checks on a voluntary basis where there is uncertainty, even if not strictly required;

• Ensure that right to work checks are being completed correctly for all sponsored workers and employees, monitored and refreshed at appropriate intervals, and copies of right to work checks kept for two years after a person ceases employment. 

• The right to work rules may expand in the future to cover more non employed workers, replace so with and it is essential to keep up to date with sponsor  and employer right to work guidance changes. 

Please contact us if you would like advice on your right to work check processes. 

Information correct as of 3 June 2026.