How Does a UK Business Hire an Employee from Abroad?

Author

Dr Bernard Andonian

Dr Bernard Andonian is a highly respected immigration, nationality and human rights lawyer, former Immigration Judge, and recognised expert known for his longstanding experience, academic achievements and contribution to landmark legal decisions.

Contact Dr Bernard Andonian View full profile

Summary

To hire from abroad, you need a sponsor licence; the role must now be graduate-level and pay at least £41,700. Government fees for a single placement easily exceed £8,000, and the Home Office revoked over 3,100 licences in 2025. Treat compliance as a business risk from day one, not an HR afterthought.

• To employ a worker from outside the UK, a business must first obtain a sponsor licence from the Home Office. Without it, no overseas hire can lawfully take up the role, regardless of the candidate’s strength.
• The Skilled Worker route now requires roles at RQF Level 6 (graduate level) or above, following changes that took effect on 22 July 2025. The minimum salary is £41,700 or the going rate for the relevant occupation code, whichever is higher.
• The Immigration Skills Charge rose by 32% in December 2025. A medium or large employer sponsoring a worker on a five-year visa now pays £6,600 in skills charge alone, before application fees and the Certificate of Sponsorship fee are added.
• Sponsor licence revocations hit a record high in 2025, with over 3,100 licences revoked across the year. The Home Office is conducting more unannounced compliance visits, and a suspension puts every sponsored worker’s status at immediate risk.
• From 6 March 2026, sponsors must actively inform all sponsored workers of their UK employment rights and retain evidence of this. This applies to workers already in post, not just new hires.

A UK business can hire an employee from abroad, but doing so requires a sponsor licence issued by the Home Office. The licence gives the employer legal authority to assign a Certificate of Sponsorship (CoS) to an overseas candidate, who then uses it to apply for a Skilled Worker visa.

The UK operates a points-based immigration system under the Immigration Act 1971, as substantially amended and supplemented by the Immigration Rules. For most skilled roles, an overseas national can only come to work in the UK if their employer holds a valid sponsor licence, the job sits at the correct skill level, the salary meets the minimum threshold, and the candidate demonstrates English language proficiency. Each condition must be met.

Employers who understand the system can recruit from a global pool of qualified candidates. Those who underestimate the compliance demands face licence suspension, civil penalties, and disruption to the immigration status of every worker they have sponsored. This article is written for HR managers, business owners, and in-house legal teams who want a working understanding of the process, from the initial licence application through to the ongoing duties that come with it.

The Sponsor Licence and How to Obtain One

A sponsor licence is a formal authorisation from UK Visas and Immigration (UKVI) for a business to employ non-UK nationals in eligible roles. Without one, an employer cannot lawfully recruit from outside the UK under the Skilled Worker, Senior or Specialist Worker, or most other work routes. EU nationals who arrived after 31 December 2020 are subject to the same rules as any other overseas worker.

To qualify, a business must be genuinely operating in the UK, have no adverse history of immigration compliance, and be capable of fulfilling the monitoring and reporting duties required by sponsorship. UKVI assesses not only the application documents but also whether the organisation has the HR systems to track sponsored workers, report changes, and maintain the records set out in Appendix D of the Workers and Temporary Workers: Guidance for Sponsors (Part 3). In the absence of documented processes, UKVI will refuse or downgrade the application.

The application is submitted online through the Home Office’s Sponsorship Management System. Supporting documents, which may include employer’s liability insurance, a recent bank statement, evidence of registration with a regulatory body, or proof of business premises, must be uploaded within five working days. UKVI may carry out a pre-licence compliance visit, announced or otherwise, before deciding the application.

The fee is £536 for small organisations and charities, and £1,476 for medium and large businesses. A business qualifies as small if it meets at least two of these criteria: annual turnover of £10.2 million or less, total assets of £5.1 million or less, and no more than 50 employees. Standard processing takes up to eight weeks. The priority service reduces this to around ten working days.

Since April 2024, most licences are automatically extended for ten years rather than requiring renewal every four years. Licences covering Scale-up Workers and UK Expansion Workers remain valid for four years only. The removal of the renewal cycle means UKVI has redirected that resource into more frequent compliance audits of existing sponsors.

The July 2025 Rule Changes and Their Effect on Employers

July 2025 brought the most substantial structural change to the Skilled Worker route in several years. The minimum skill threshold rose to RQF Level 6, broadly equivalent to graduate level. Around 180 previously qualifying occupation codes were removed from the standard list. Roles at RQF Levels 3 to 5 are now only sponsorable if they appear on the Temporary Shortage List, a shorter, more restrictive list that imposes two additional conditions: restricted dependent rights and no salary discount.

The general minimum salary threshold for most new applicants is £41,700, or the going rate for the specific Standard Occupational Classification (SOC) code, whichever is higher. The Migration Advisory Committee sets the going rate and varies by occupation. An employer offering £41,700 to a software developer may still fail the going rate test if the role’s SOC code carries a higher benchmark. Accurate SOC coding is a threshold question that determines whether the application stands or falls.

From 8 April 2026, sponsors must pay the required salary in every individual pay period. The previous rule allowed the annual average to satisfy the threshold, meaning a month of reduced pay could be absorbed across the year. Under the current rule, pay that falls below the required amount in any single pay period may constitute a breach of sponsorship conditions. HR teams with commission-heavy roles, workers on reduced hours, or payroll structures that vary month to month need to assess their position before the next payroll cycle.

English language requirements have also tightened. From 8 January 2026, new Skilled Worker applicants must demonstrate B2 level proficiency on the Common European Framework of Reference for Languages, up from B1. This affects which test scores are acceptable and has direct implications for onboarding timelines, as candidates are still awaiting results.

The Real Cost of Sponsoring an Overseas Worker

Employers who focus only on the licence application fee tend to underestimate what sponsorship actually costs. The Immigration Skills Charge is a mandatory levy paid each time a Certificate of Sponsorship is assigned. It rose by 32% on 16 December 2025. Medium and large employers now pay £1,320 per year per sponsored worker. For a five-year Skilled Worker visa, that figure alone reaches £6,600, paid upfront when the CoS is assigned.

Small organisations and charities pay £480 per year, producing a five-year total of £2,400. The charge does not apply to a defined list of scientific and academic occupations, including chemical scientists, biological scientists, and higher education teaching professionals. Employers in those sectors should confirm the applicable SOC code before budgeting.

The Certificate of Sponsorship costs £525 per worker. A medium or large employer that does not yet hold a licence also pays £1,476 upfront. Total government fees for a single three-year Skilled Worker placement with a medium- or large-sized employer routinely exceed £8,000 before legal advice, translation costs, or internal HR time are included. Consider a mid-sized professional services firm hiring two overseas specialists on five-year visas: government fees alone, excluding any legal costs, will exceed £20,000.

Employers are prohibited from recovering the sponsor licence fee, the CoS fee, or the Immigration Skills Charge from the sponsored worker, whether through salary deduction, a repayment clause, or any other mechanism. Gulbenkian Andonian’s sponsor licence guidance sets out these restrictions in full. Passing costs to the worker is a breach of the sponsor’s duties and can trigger a licence downgrade or revocation.

Compliance Duties After the Licence Is Granted

A sponsor licence carries continuing obligations from the day it is granted. The Home Office’s enforcement activity has increased materially. In Q4 2025 alone, 1,516 sponsor licences were revoked. Across the whole of 2025, approximately 3,100 licences were revoked: the highest annual figure on record. Many of those revocations involved employers who held their licence for years without incident before a compliance visit revealed gaps in their record-keeping or reporting systems.

Sponsors must conduct right-to-work checks before any worker starts, including non-sponsored workers. Updated guidance published in March 2026 extended the scope of this duty to all workers an employer directly engages, not only sponsored visa holders. A failure to conduct a proper right-to-work check is now expressly linked to the risk of licence revocation.

Record-keeping under Appendix D requires sponsors to retain, for each sponsored worker, a copy of their passport identity page, evidence of their right to work, the employment contract, payslips confirming that the salary paid matches the CoS, and, where required, qualifications evidence. Records must be kept for the duration of the sponsorship and for at least one year after it ends. Two years is a safer standard, as it provides a clearer defence if civil penalty proceedings follow.

Sponsors must report certain events through the Sponsorship Management System within ten working days. These include a sponsored worker failing to start, a worker absent without explanation for ten consecutive working days, a change in job title or duties, a salary reduction, and business changes such as a change of address, an acquisition, or a restructuring. Missing the reporting window is itself a compliance breach, separate from whatever triggered the need to report.

From 6 March 2026, a further duty requires sponsors to inform all sponsored workers of their UK employment rights and retain evidence of having done so. The obligation applies to workers already in post, not only new hires. Evidence may take the form of signed onboarding documentation, induction records, or system logs showing that employment rights materials were received. If that evidence does not currently exist for workers already sponsored, it needs to be created.

Practical Steps for HR Teams and Employers

For businesses new to sponsorship or those that have not reviewed their processes recently, the priority actions are these:

• Check whether the role qualifies before recruiting. From July 2025, only RQF Level 6 roles are available under the standard route. Confirm the correct SOC code and whether the salary on offer meets both the general threshold and the going rate for that code. Errors here result in refusals and wasted fees.
• Appoint the right key personnel. The Authorising Officer must be a settled worker, free from unspent criminal convictions, and senior enough to take personal responsibility for the licence. Level 1 users manage day-to-day access to the Sponsorship Management System.
• Build documented HR systems before applying. UKVI can test those systems before granting the licence and again during unannounced compliance visits. A centralised digital record for each sponsored worker, cross-referenced to their CoS details, is the minimum standard. Paper-based or informal processes are a material risk.
• Review payroll against the new per-pay-period rule. From April 2026, every pay period must independently satisfy the minimum salary. Monthly-paid workers whose earnings vary due to overtime, commissions, or deductions need specific attention before the next payroll run.
• Conduct an internal compliance audit now. The Home Office’s position is that ignorance of updates to the sponsor guidance is not a defence. Sponsors are required to read the full guidance, including Parts 1, 2, and 3, the appendices, and the route-specific guidance, and to remain current.
• Document employment rights information for all sponsored workers in the post. This covers entitlements under the National Minimum Wage, Working Time Regulations, annual leave, sick leave, health and safety, and anti-discrimination protections. If the evidence does not yet exist, it needs to be created.
• Take legal advice where the position is marginal. Some roles sit close to the RQF Level 6 boundary. Some SOC codes carry going rates that interact with salary structures in ways that are not immediately obvious. Identifying a problem before the CoS is assigned costs far less than dealing with a refusal or compliance action afterwards. Our sponsor licence team can review your position before you commit to a recruitment process.

Where the Policy Is Heading

The direction of UK employer sponsorship policy is toward narrower access and heavier compliance obligations. The July 2025 changes reflect a deliberate decision to restrict the Skilled Worker route to graduate-level occupations, with limited and time-restricted exceptions. The Temporary Shortage List, covering around 60 sub-degree roles, is reviewed regularly, and the occupations on it may change with relatively short notice.

The government is consulting on extending the qualifying period for Indefinite Leave to Remain from five years to ten for most Skilled Worker visa holders. If that change proceeds, it will affect retention planning for employers who regard the ILR pathway as part of the package they offer to overseas hires. Employers with workers on the current five-year route should keep the consultation under review and factor the uncertainty into any long-term workforce plans.

Record revocation rates signal that the Home Office’s approach to non-compliant sponsors has changed materially. Compliance visits are more frequent, the grounds for revocation have widened, and the consequences for a sponsored worker when their employer loses its licence are immediate. Boards and senior leadership teams need to treat sponsor licence compliance as an operational risk, not a function that can be delegated entirely to HR.

Frequently Asked Questions

Can a small business apply for a sponsor licence?

Yes, small businesses can apply, and they pay the lower application fee of £536. The eligibility test has no minimum size requirement. UKVI does expect even small organisations to have documented HR processes and designated key personnel in place before the licence is granted, and will assess this as part of the application.

How long does it take to get a sponsor licence?

Standard processing takes up to eight weeks from the date of submission. The priority service reduces this to around ten working days and carries an additional fee. No Certificate of Sponsorship can be assigned until the licence is approved, so employers should build these timescales into their recruitment planning from the outset.

Can the employer pass sponsorship costs to the worker?

No, employers are expressly prohibited from recovering the sponsor licence fee, the CoS fee, or the Immigration Skills Charge from the sponsored worker, whether through salary deduction, a repayment agreement, or any other method. Doing so breaches sponsor duties and can result in licence downgrade or revocation.

What happens when a sponsored worker leaves the role?

The employer must report the worker’s departure through the Sponsorship Management System within ten working days. The Home Office will then curtail the worker’s leave, typically to 60 days, during which they may seek a new sponsor or make another immigration application. Failing to report is a separate compliance breach.

Does the employer need a new licence for each overseas hire?

No, a sponsor licence covers all sponsored workers under the relevant route categories. Once the licence is held, the employer assigns a separate Certificate of Sponsorship for each new hire who needs one. The £525 CoS fee and the Immigration Skills Charge apply per worker, calculated on the duration of each individual sponsorship.

Wrapping up

The rules governing employer sponsorship are detailed and subject to regular change. If your business is applying for a sponsor licence for the first time, reviewing an existing licence for compliance gaps, or assessing whether a specific role now qualifies under the post-July 2025 rules, taking specialist immigration advice before committing to a recruitment process is the most cost-effective step you can take.