Sponsor licence compliance requires accurate records, timely reporting and ongoing checks on sponsored employment. An internal audit should test whether your HR systems work in practice, not simply whether you have a written policy.
This guide covers practical preparation for UKVI checks and the distinction between a licence downgrade, suspension and revocation. If you are applying for your first licence, start with our UK sponsor licence guide. For a solicitor-led review, see our sponsor licence compliance audit service.
What happens during a UKVI compliance audit?
UKVI can assess your systems, examine records and interview staff. Checks may include announced or unannounced visits. Prepare the people who manage sponsorship to explain how recruitment, payroll, attendance and reporting work together. Source: Home Office compliance visit guidance.
A useful internal exercise is to select a worker’s file and trace the process from recruitment to their current role. Can HR explain the occupation code, show the right-to-work check, reconcile pay and retrieve reports without relying on one unavailable colleague?
Five areas to check before an audit
1. Reporting changes through the SMS
Most reportable worker changes have a 10-working-day deadline; many organisational changes have a 20-working-day deadline. Specific rules and exceptions apply. Unauthorised absence exceeding 10 consecutive working days must be reported no later than 10 working days after the tenth day of absence. Source: sponsor guidance, Part 3.
Keep a reporting log showing the event, deadline, responsible person and submission record. Escalate proposed changes before they happen: a different role may require more than an SMS report.
2. Keeping the required worker records
Appendix D sets out the records required for sponsored workers. Depending on the route and circumstances, these include immigration and right-to-work evidence, contact details, recruitment records, relevant qualifications and evidence of pay. Records may be electronic, but must be retrievable when requested.
The usual Appendix D retention period runs throughout sponsorship and then until the earlier of one year after sponsorship ends or a compliance officer examining and approving the records. Other legal duties can require longer retention. Do not apply this period indiscriminately to every HR document. Source: Appendix D record-keeping guidance.
3. Completing the correct right-to-work checks
Check the right to work before employment starts, using the method appropriate to the individual. This may involve the Home Office online service, an eligible manual document check or an approved identity-service process for eligible British and Irish passport holders. A share code alone is not the completed employer check.
Retain the evidence and arrange follow-up checks where required. Use the Employer Checking Service where the circumstances call for it, including certain pending applications. Source: GOV.UK right-to-work checks.
Illegal-working penalties can reach £60,000 per worker. A sponsor licence does not replace an employer’s right-to-work responsibilities. Source: GOV.UK illegal-working penalties.
4. Matching the actual job and pay to sponsorship
Compare the worker’s actual duties, work location, hours and pay with the CoS and applicable route rules. Investigate differences rather than assuming the original visa approval covers later changes. Source: guidance on sponsoring a Skilled Worker.
Include payroll in the review. Our Skilled Worker salary guide explains salary floors, going rates and concessions that may need reassessment at extension.
5. Monitoring permission and contact details
Maintain current contact information and a reliable process for reviewing permission expiry dates. Assign responsibility for following up reminders and checking evidence of any new application or grant. Do not assume that an employee’s assurance that they have applied is enough to establish a continuing right to work.
A-rating, B-rating, suspension and revocation
| Status | What it means for the employer |
|---|---|
| A-rated | Can sponsor within the approved routes and applicable CoS permissions; this is not unlimited allocation authority |
| B-rated | Must follow a paid action plan; new recruitment is restricted, while qualifying extensions for existing workers may remain possible |
| Suspended | Cannot assign CoS; sponsor duties continue and existing workers’ valid permission is not automatically cancelled |
| Revoked | Sponsorship ends and workers’ permission may be cancelled; there is no statutory appeal against licence revocation |
See GOV.UK licence ratings and Part 3, sections C9–C10. Do not assume every breach leads to an action plan before stronger action.
Responding to a suspension notice
The suspension process normally allows 20 working days from the written notification to respond. Read the notice carefully: this is not a guaranteed response period before every revocation. Serious cases can lead to immediate revocation. Source: sponsor guidance, section C9.
Preserve the original records, identify each allegation and prepare an evidence-based response. Separate factual errors in the allegations from genuine failures and explain any corrective steps already taken. Remediation does not guarantee reinstatement.
Obtain urgent legal advice on the notice, response deadline and any potential challenge. See our sponsor licence suspension and revocation service. Do not rely on a routine immigration appeal to reverse a sponsor licence decision.
Practical internal audit checklist
- Sample worker files and identify missing or inconsistent evidence.
- Reconcile contracts, CoS details, payroll and actual duties.
- Review SMS reporting logs and outstanding changes.
- Check right-to-work evidence and follow-up reminders.
- Confirm that responsible staff can retrieve records and explain their procedures.
- Assign each corrective action an owner and completion date, then check it has been resolved.
LegumLex can advise on sponsor licence compliance and Skilled Worker sponsorship. Contact our team to discuss an internal review or a Home Office notice.