Tier 2 and 5 Sponsor Compliance Audits

At the time of writing, there are currently 29,036 Tier 2 and/or Tier 5 sponsors in the UK. A sponsor licence is issued for four years at a time, and during this time, a sponsoring company can reasonably expect to be visited by a Home Office immigration inspector. 

In the period between June and August 2018, inspectors undertook 149 visits to companies who had made a new application for a sponsorship licence and 228 visits to companies who already had a sponsorship licence. Of these 228 follow-up visits, over 40% of these visits were unannounced, meaning that inspectors arrived at business premises belonging to sponsors with no prior warning. In the same period, 84 companies had their sponsorship licences suspended pending further investigation and 41 had their licences revoked. 

Although only less than 1% of sponsors were visited in this period, over 1 in 3 of those visits resulted in the suspension of the sponsor licence and 1 in 5 in the loss of a licence, leading to all sponsored workers having their permission to live and work in the UK curtailed. 

In the same period, 119 civil penalties with a total value of £1.9 million were issued to companies in connection with suspected illegal workers where the company had no statutory excuse as mitigation. This means that illegal workers were detected in companies - usually, via tip-offs or by cross-referencing HMRC records with Home Office records - and upon investigation, these companies were found to not hold the required evidence to demonstrate a right to work.

What is the purpose of an audit?

Sponsorship licences are suspended and revoked where, following an audit, the Home Office conclude that the sponsor is not adhering to the letter or the spirit of the relevant immigration rules and guidance, and so, by either negligence or deliberate malpractice, the sponsor is incorrectly and perhaps unlawfully sponsoring workers in the UK. 

Through conversations with staff and on review of sponsorship records in the form of assigned certificates of sponsorship, evidence of resident labour market tests and other mandatory documents saved to file as per Appendix D of the Tier 2 and 5 Sponsor Guidance, the Home Office will assess this against what it sees as the reality of how a company is approaching sponsorship. 

What happens in an audit?

An audit usually begins with the inspector interviewing the Key Personnel who are linked to the sponsorship licence, such as the Authorising Officer and/or any Level 1 users. The inspectors also might speak privately with sponsored workers. In over half of visits, the visit will be communicated to the company ahead of time and usually, information is then sent with regards who they would like to speak with and which personnel files they would like to inspect.

The interviews with those involved in the sponsorship process are to gauge the level of understanding of the sponsorship process within the company and to also assess how and why the company sponsors non-EU nationals. The interviews with sponsored workers are to assess whether they are working in line with their certificate of sponsorship and whether the processes explained by the Key Personnel are actually in operation. 

The inspector will then ask to see a list of employees, usually, a list that separates those with a permanent right to work in the UK from those with a temporary right to work. From that list, he or she will request to see their personnel files, whether saved digitally or in paper file and will record the evidence that demonstrates a right to work. For any sponsored workers, the inspector will assess the evidence of their sponsorship and whether or not it is consistent with his or her employment.

What happens after an audit?

The inspection doesn’t end after the inspector leaves. The inspector will return to the Home Office and communicate his or her findings to the sponsorship compliance unit of the Home Office. This is the team that can access a company's sponsor management system to review any certificates of sponsorship and/or sponsor notes. The compliance team will measure the evidence taken from the inspector against the evidence it holds or has access to and make a decision on the outcome of the audit. The Home Office might communicate with the sponsor at this time if any further evidence is required.

In most cases, where an audit has been completed with no further action to be taken by the Home Office, the sponsor will not hear anything more. However, if the Home Office have concerns that there are grounds to revoke a sponsor’s licence, then they will write to the sponsor to notify them that their sponsor licence has been suspended and of the reasons why.

Where a sponsorship licence has been suspended, the Home Office will invite the sponsor to respond to the points raised in the suspension letter. Where a sponsor cannot address or explain the specific points raised by the Home Office, its response will be met with a notice to revoke the sponsorship licence.

What does it mean to have a licence revoked?

There is no right to appeal a decision to revoke a sponsorship licence. If a sponsor disagrees with a decision and there is merit to an argument that the Home Office was incorrect in their decision, the only legal remedy available is an administrative review at the High Court. Administrative reviews are costly and time-consuming and so few revocation decisions are challenged beyond an initial Pre-Action Protocol letter before claim. 

Following a revocation, any Key Personnel, owners or directors of the business are prohibited from making another application for a sponsor licence for a period of 6 months. 

Any employees sponsored by a company which has its licence revoked can expect their visa to be curtailed to 60 days (or less in some circumstances) This essentially means that such workers have up to 60 days to leave the UK or to find another employer (often a competitor) which is prepared to sponsor them.

How can you prepare for an audit?

The best-prepared sponsors know the visa process really well and have an excellent knowledge of what they need to hold and what they need to do. The better prepared your company is for the questions that you will face and the evidence that you will need to present, the higher the chances that the audit will be quick and a positive experience. 

At Gateley, we offer a range of services to prepare you for a Home Office inspection. We can review your files either remotely or at your office, pose the questions to you that an inspector will ask to prepare you for being interviewed and provide you with comprehensive and constructive feedback.