Sponsor Licence compliance is vital if you wish to retain your sponsored workforce.
Every quarter of the year, the Home Office publish their transparency data. This data shows there has been a general upward trend in both suspensions and revocations in 2025 and 2026.
Compliance is key, now more so than ever!
The Home Office have the power to conduct unannounced in-person compliance audits, they also have data sharing infrastructure with HM Revenue and Customs and we are seeing an increase in compliance actions and Civil Penalties on the basis of PAYE.
How to prepare for a Home Office Sponsor Licence Compliance Audit in 2026
As a Sponsor you have five main duties, these are
- Reporting
- Record keeping
- Complying with Immigration Laws
- Complying with wider UK laws
- Not engaging in behaviour that is not conducive to the public good
In an audit the Home Office can check your SMS (Sponsor Management) portal, your records for your sponsored workers and your HR systems/ processes.
Reporting
Step 1 in preparing for an audit should be conducting a thorough review of your licence and any Certificates of Sponsorship and checking all the information is correct and up to date. If you find any changes that have now been reported, make the reports
As a Sponsor, you have an obligation to make reports on your SMS portal when certain business circumstances or workers personal circumstances change. The general rule is that business- related changes must be reported in 20 working days, and sponsored workers change of circumstances must be reported in 10 working days.
Failure to make accurate and in-time reports are a breach of your sponsor duties. Serious or repeat breaches could result in compliance action from the Home Office.
When checking the SMS, some key areas to consider should be:
- Your key personnel: Authorising Office, Level 1 users and Key Contact. Make sure their details are still up to date and these people remain the most appropriate member in your organisation to deal with the licence
- Your business address, is this up to date and correct?
- Your workers job title, have they been promoted since they were sponsored?
- Your workers hours of work and salary
This is a non-exhaustive list; the full guidance can be found here.
To ensure continued compliance, we advise diarising some time to log in monthly to keep on top of any changes.
Record keeping
Step 2 is to check and organise your documentation for the Home Office’s inspection.
Sponsors must maintain certain records in relation to both the licence and the Sponsored Workers. These documents should be retained for at least one year after sponsorship has ended for the worker. Some of the documents you need to retain are as follows:
- Right to Work checks
- Dates of entry checks
- Recruitment evidence
- Evidence of sponsored workers salary
- Evidence of skill level
- The workers personnel file: including contact details, address, NI number, work absences, employment contract
This is not an exhaustive list.
Make sure you have adequate processes and systems in place to make sure you are gathering and storing the necessary information.
For example, do you ask your employees to update their contact information annually? Do you centrally diarise leave expiry dates, to run new right to work checks? How do you monitor absences?
OTB Legal offer a range of services where we can conduct a mock audit and one of the key aspects of this mock is to check your documents. This independent professional insight can help you spot inconsistencies or reports which have been missed. Use our link below to reach out for a free consultation to discuss further.
Interview preparation
Step 3 would be to prepare your team for possible questions they may be asked, to put them at ease for the real interview. The Home Office may interview your employees during their Audit.
We appreciate that, especially for Skilled Workers with language barriers, the interview process can be intimidating. As part of our mock audit service we can interview members of the team so they can be prepared with what to expect from the Home Office.
Possible questions you could be asked:
- What is your recruitment policy?
- How do you monitor annual leave?
- Where do you keep your policies and procedures?
How to pass a Home Office Sponsor Licence Compliance Audit
In order to pass a Home Office audit, your key personnel must have a good understanding of the responsibilities that come with the sponsor duties. Once you understand the scope of the sponsor duties, you must put in place systems to make sure that you meet them.
During the audit the Home Office will check your documents and systems. To pass, you will need to make sure everything is consistent and in order. Preparation and ongoing compliance are key. If you have proper checks in place before an un-announced audit, it will not be a last minute scramble to get your filing in order.
If you are given notice of your audit and you would like help to prepare, then OTB Legal would be very happy to assist. If you have not been notified of an audit but want to be prepared, then we can help with a mock audit at any time. This is useful to stress-test your system, and also provides valuable training for managers on what is expected of them.
If the Home Office are not satisfied your business is fulfilling your sponsor licence obligations responsibly, they have powers to
- Reduce your COS allocation
- Downgrade your licence
- Suspend your licence
- Revoke your licence
- Cancel permission of your sponsored workers
- Reporting to the police or relevant authorities
In the event of any of the above, we recommend seeking urgent legal advice.
How to maintain Compliance
Regular checks are very important. We recommend regular audits. Make sure you are being pro-active with compliance and keeping on top of any reportable changes to either the business or workers.
Some action points to consider:
- Diarise regular reviews
- Record right to work checks and set alerts for visa expiries
- Engage with mock audit or compliance checking services
- Get to know your sponsor duties and stay up to date with any changes or updates
How OTB Legal can help with Sponsor Licence Compliance
At OTB Legal we offer multiple services to help businesses maintain their Sponsor Licence. We offer a Compliance Pack that provides your company with all the information you need to successfully maintain your Sponsor Licence and details the obligations you have as a Sponsor Licence holder. We also offer Compliance Audits where we audit your HR systems and provide advice on complying with your obligations. The audit service includes: Letting you know if any documents are missing or if your procedures need to be tightened in light of frequently changing immigration rules, a crucial review of all Human Resource Procedures, a review of employee documents to ensure continued compliance with your sponsor licence duties, advice on, and assistance with, UKVI compliance interviews and finally a review of key personnel, and whether your current licence is the appropriate one for your business.
If you have concerns about your Sponsor Licence Compliance or would like to get your company thoroughly prepared for a Home Office Sponsor Licence Compliance Audit, you can book a free initial consultation with our expert lawyers using the button below:
