UK business post-Brexit – Is your company ready?

22 April 2020 | Applicable law: England and Wales

Since the outbreak of coronavirus (COVID-19) on a global scale, Brexit has seemingly taken a backseat in the political arena. UK businesses must ensure post-Brexit considerations remain at the forefront, and do not become pushed aside by the need to prioritise the immediate repercussions of the coronavirus pandemic.

If you are a UK employer and your workforce comprises EU citizens (including EEA and Swiss citizens), you should be thinking ahead and taking the necessary steps now to safeguard the retention of your EU staff.

EU citizens living and working in the UK

Whilst in technical and legal terms the UK left the European Union (EU) on 31 January 2020, the UK remains, for all commercial and immigration purposes, a member state of the EU until the transition period comes to an end on 31 December 2020. The UK now has until 30 June 2020 to request an extension of the transition period, which Prime Minister Boris Johnson has pledged not to do.

The UK government has confirmed that the rights of EU citizens living in the UK will remain the same until 30 June 2021. The Home Office has rolled out the EU Settlement Scheme, giving EU citizens (who started living in the UK before 31 December 2020) the option to apply for pre-settled status (the right to live in the UK for 5 years) or settled status (the right to remain indefinitely in the UK).

As of 31 March 2020, The Home Office has received more than 3 million applications under the EU Settlement Scheme with 125,000 applications submitted in March alone. Due to COVID-19, processing times have inevitably increased, meaning applications should be submitted sooner rather than later, to prevent any detrimental delays.

New sponsorship system for UK employers

There has been a great deal of discussion and speculation questioning whether the UK will successfully negotiate a trade deal with the EU; thus preventing the UK from regressing into inauspicious World Trade Organisation trade rules. Deal or no deal, the post-Brexit transition period will come to an end and there will come a time when EU citizens will no longer be allowed to live and work in the UK without a visa.

There exists currently in the UK a points-based system for the employment of non-EU migrant workers, with companies being granted status as a Tier 2 or 5 sponsor. The Home Office has recently published information outlining the new points-based system coming into effect from 1 January 2021, which will govern the sponsorship of both EU and non-EU citizens working in the UK.

The Home Office is encouraging UK businesses who are not currently licenced sponsors, but who foresee the need to hire skilled migrant workers from January 2021 onwards, to apply as soon as is practicable for a sponsor licence under the new system.

Early applications should be made even if your business is not currently in a position to sponsor non-EU workers under the existing sponsorship system, or even if you are not sure if or when you will need to sponsor migrants (EU or non-EU) under the new sponsorship system being implemented on 1 January 2021.

One of the main requirements to be granted with a sponsor licence under the new points-based system is a company's demonstration that they can offer 'genuine employment' at the minimum skill level required; level 3 of England and Northern Ireland's Regulation Qualifications Framework (RQF) – comparable to an A-level qualification.

Employers should ensure that their EU employees take advantage of the EU Settlement Scheme whilst it is still available. Providing support for their EU staff to apply for pre-settled or settled status under the Scheme will be be significantly cheaper, quicker, and less tedious than sponsoring them under the new points-based system.

Sponsor licence applications

Sponsor licence applications are quite complex and require incredible attention to detail. The Home Office scrutinizes all aspects of sponsor licence applications, and makes absolutely no allowances for mistakes. Companies must ensure that all bases are covered and there is no room left for doubt or false assumptions.

The Home Office does not have an obligation to contact a sponsor licence applicant to obtain further clarification if an error is made in the application, if supporting documents are incorrect or missing, or if additional information is required. What is more likely to happen is, the Home Office will refuse the application and the company will have to re-apply.

There is no right of appeal for a refused sponsor licence application, application fees are not refunded, and the refusal may come with a mandatory 'cooling-off' period where the company is not allowed to re-apply for a time period of anywhere from 6 months to 5 years. This can have far-reaching consequences for a business as the skilled sponsored worker(s) will not be able to start working and the required roles will remain vacant, thereby affecting productivity and cash flow.

Sponsor licence duties and compliance

When granted with a sponsor licence to employ migrant workers, a business must then ensure they uphold and comply with their sponsor licence duties. The Home Office has a Sponsorship Management System which sponsors must report to when taking any action in regards to their sponsored workers or their business. Reporting failures or errors in reporting can result in a sponsor licence being revoked, suspended, downgraded in rating, or financial penalties being issued against the business.

With great power comes great responsibility (please forgive the cliché).

A sponsor licence allows UK businesses to place skilled migrant workers in roles that cannot be filled by UK resident workers, thus giving them the platform to increase profits and facilitate growth. With the benefits of holding a sponsor licence come the substantial responsibilities, which if monitored through efficient internal systems, and created and maintained in line with correct legal advice, wholly justify the burden they impose.


Hypervigilance is the only stance to take as a UK sponsor licence holder.

Whether your business currently holds a sponsor licence or does not, if you intend to employ EU or non-EU migrant workers in the long term, it is essential to take the required steps now to ensure your business will be in the position to do so.

The Withers UK immigration team provides an immigration service bespoke to the needs of each business under their care, including a pre-licence audit and training service specially tailored to guide your company through the sponsor licence application process and adherence to maintenance duties.

Please do not hesitate to reach out with any query you may have. The Withers UK immigration team will work with you to create a service which most benefits the immigration interests of your business.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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