Sponsor Licences and Cooling Off

When people talk of ‘’cooling off’’ the automatic assumption is that they are refreshing themselves after a gym workout or a day in the sun. For Immigration Solicitors and sponsor licence holders the term ‘’cooling-off’’ has a different meaning and one that UK business owners dread.

With the Home Office focus shifting away from sponsor licence renewals Sponsorship Licence lawyers anticipate that the focus of Home Office officials will be on sponsor licence compliance. That makes it even more important that sponsor licence holders understand what cooling off means in the context of being a sponsor licence holder.

In this article, our Sponsorship Licence lawyers explain what cooling off is and how cooling off could affect your business.

UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers

For sponsor licence and immigration advice call OTS Solicitors on 0203 959 9123 or contact us online.

Switching focus from sponsor licence renewals to compliance

If you have not already read up on the latest Home Office sponsor licence announcements the good news is that it will no longer be necessary to apply for a sponsor licence renewal provided your current licence is due to expire on or after 6 April  2024.

If you are unlucky enough to have a sponsor licence that ends before 6 April 2024 you will have to apply to renew it in the usual way and pay the standard licence renewal fee.

With Home Office officials no longer pouring over renewal applications and the Home Office already increasing compliance activity it is logical for both sponsor licence holders and Sponsorship Licence lawyers to likewise turn their attention to sponsor licence management and compliance. If you don’t do that there is an increased risk that your sponsor licence may be suspended and your business subjected to a cooling-off period.

What is a sponsor licence cooling-off period?

A cooling-off period can be imposed by the Home Office when it refuses or suspends a sponsor licence. During this period a UK business cannot apply for another sponsor licence. If they do their application will be automatically refused and the sponsor licence applicant will have lost the sponsor licence application fee as well as the costs of instructing Sponsorship Licence lawyers to apply for a new licence.

How long is the cooling-off period?

The length of the cooling-off period depends on what the Home Office says you did wrong. Best case scenario there is no cooling-off period imposed or it is only for 6 months. Worst case scenario it is a 5-year cool off.

When won't the Home Office impose a cooling-off period?

The Home Office will not impose a cool-off if you applied for a sponsor licence and your application was refused provided that:

1. Your application was submitted by a representative
2. You did not provide the Home Office with the documents or information requested but the failure to comply was for reasons outside your control
3. You did not meet the scale-up criteria for a scale-up sponsor licence

Guidance on Home Office cooling off periods

Our Sponsorship Licence lawyers say you can expect a cooling off period of:

• 6 months if a sponsor licence application is refused for reasons outside the 3 set out above
• 12 months if your sponsor licence was revoked – the period could be longer depending on the reasons for the revocation
• 12 months if your business has been issued with a civil penalty for illegally employing a worker
• Up to 5 years for the most serious cases such as numerous civil penalties for the employment of workers without the right to work
• Automatic 5-year cooling off period for matters such as bringing passengers to the UK in breach of an authority to carry scheme

Cooling off does not just affect the sponsor licence applicant

You may think that a business could avoid a cooling-off period by resurfacing with a new company name and applying for another sponsor licence. However, the rules say that the cooling-off period applies to the sponsor licence applicant or holder as well as to the business owner, company directors, key personnel and those involved in the day-to-day running of the business.

The business implications of a cooling-off period

If your sponsor licence is refused or revoked and a cooling-off period is imposed by the Home Office, it means you will not be able to sponsor overseas workers for the duration of the cooling-off period because you cannot sponsor workers until you have secured a sponsor licence.

You may think that if your sponsor licence is revoked then given the business ramifications of the cooling off period it is worth taking the risk and continuing to employ Skilled Worker Visa holders even though you no longer have the authority to sponsor them and they, therefore, do not have the right to work for your business.

If you employ someone who does not have the right to work for you then you will be in breach of illegal working legislation. To increase the deterrent of UK employers ignoring the legislation the civil penalties for breaching the law are increasing.

The current civil penalty for employing an illegal worker is a maximum of £15,000 per illegal worker for a first offence. For a repeat offence the maximum fine increases to £20,000 per illegal worker. The civil penalty fines are increasing to £45,000 per illegal worker. Fines for repeat offenders are increasing to a maximum fine of £60,000 per illegal worker. The business ramifications of civil penalty fines are obvious to all.

Sponsor licence management

The best ways to avoid the imposition of a cooling-off period are to:

1. Take advice from specialist Sponsorship Licence lawyers on the timing of your sponsor licence application and the work you need to do in advance of the application to ensure you have the correct documents and compliance systems in place and that your choice of key personnel is suitable
2. Ensure that HR advisors and key personnel are trained in the latest rules and guidance on the conduct of right-to-work checks and make sure there are simple but robust systems in place to ensure all checks are completed
3. Test your sponsor licence compliance by asking Sponsorship Licence lawyers to carry out mock audits of your systems and files
4. Take legal advice from Sponsorship Licence lawyers as soon as you identify a potential compliance issue so the non-compliance does not become a major issue and instead is dealt with
5. Use a sponsor licence management service to manage your sponsor licence for you if you do not have the resources to maintain high sponsor licence compliance levels or you recognise that it is more cost-effective to use Sponsorship Licence lawyers to manage your sponsor licence for you
6. If you are subject to a Home Office audit take legal advice from Sponsorship Licence lawyers as they may be able to help you avoid your sponsor licence being revoked or they may be able to reduce the length of any cooling-off period

How OTS Solicitors can help with all your UK sponsor licence and immigration law needs

Our Business Immigration Solicitors can help your business with all your sponsor licence, immigration and employment law needs from sponsor licence applications to sponsor licence management services together with specialist advice on sponsor licence compliance.

UK Online and London-Based Immigration Solicitors and Sponsorship Licence Lawyers

For sponsor licence and immigration advice call OTS Solicitors on 0203 959 9123 or contact us online