New sponsor guidance defines 'sponsorship costs' that cannot be recouped from sponsored workers and extends the ban beyond the Skilled Worker route to more immigration routes. In this article, we examine which costs and which routes are affected.
At the end of 2024, updated sponsor guidance introduced a ban on passing specific sponsorship costs to Skilled Workers. See our previous article for details.
The change of policy was first announced in Labour's ministerial statement on 28 November 2024.
Sponsorship costs are now defined
The new sponsor guidance defines sponsorship costs as the following:
- Sponsor licence application fee;
- Fee for adding certain immigration routes to a sponsor licence;
- Certificate of Sponsorship fee;
- Immigration Skills Charge;
- Premium customer service fees for having a dedicated UKVI account manager; and
- Post-licence priority service fees for faster processing of sponsor requests.
Associated administrative costs are (loosely) defined
'Associated administrative costs' is defined as costs incurred by a sponsor to obtain, use, or maintain their sponsor licence.
This could be a problematic area for sponsors because exactly what is and what isn't an associated administrative cost is open to interpretation.
The sponsor guidance includes a non-exhaustive list covering three areas, which are analysed in turn below.
Premium service and priority service fees
The guidance confirms that premium and priority services fees will be considered examples of an associated administrative cost if incurred in relation to:
- A sponsor licence application;
- Adding a route to an existing licence;
- Submitting a change of circumstances request; or
- A Certificate of Sponsorship allocation request.
Legal advice fees relating to the sponsor licence or Certificates of Sponsorship
A sponsor cannot recoup fees for legal advice it has received to apply for, use or maintain its sponsor licence, or to assign, request or apply for a CoS.
Immigration advice/immigration service fees provided to a sponsored worker
Fees for immigration advice or immigration services (either provided by a third party or the sponsor directly) are considered associated administrative costs in circumstances where a sponsored worker did not have a genuine choice in whether or how to obtain such services.
Sponsors will need to consider how to evidence the exercise of a genuine choice in all cases where they are considering passing on immigration advice/immigration service fees to a sponsored worker.
The ban does not include the recoupment of costs relating to an immigration application for a sponsored worker or their dependants, e.g. any Home Office immigration application fees, Home Office commercial partner service charges and/or Immigration Health Surcharges.
Implementation dates for the bans on passing on sponsorship costs
Sponsors should understand when each ban came into force.
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Skilled Worker only |
Other immigration routes |
|---|---|
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The ban applies to costs where a sponsor recoups or attempts to recoup the following on or after 31 December 2024:
|
The ban applies to costs where a sponsor recoups or attempts to recoup the following on or after 9 April 2025:
This applies to all sponsored immigration routes. |
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The ban applies to the following costs where a CoS was assigned on or after 31 December 2024:
The examples of what is an associated administrative cost wording were added to the guidance on 9 April 2025, so there may be a small cohort of sponsors who identify that they have complied with the ban on passing on the CoS fee, but have not complied with the ban on passing on associated administrative costs. This could include recouping a priority fee to expedite the processing of a CoS allocation. |
The ban applies to the following costs where a CoS was assigned on or after 9 April 2025:
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Note that since its introduction in 2017, it has always been prohibited to pass the cost of the Immigration Skills Charge (ISC) to a sponsored worker. The ISC must be paid for each worker sponsored under the Skilled Worker and Global Business Mobility routes (unless an exception applies).
Sponsors of workers in routes other than the ones specified above, e.g. Creative Worker and Government Authorised Exchange worker, are not currently within the scope of the ban to pass on the Certificate of Sponsorship fee.
Action points for sponsors
Review and update your policies: Ensure your internal policies are updated to comply with the new sponsor guidance on the ban of passing on sponsorship costs. This includes understanding the specific costs that cannot be recouped from sponsored workers. Before you consider recouping costs from a sponsored worker, you should be aware of and understand how you are impacted by new rules excluding deductions, loans and investments from qualifying salary. See our article here.
Educate your HR team: Inform your HR and administrative teams about the changes in sponsor guidance effective from 9 April 2025. Make sure they are aware of the extended ban on passing sponsorship costs to workers across various immigration routes.
Document worker agreements: Obtain and maintain written evidence of sponsored workers' agreement regarding any associated administrative costs. This documentation will be crucial during Home Office audits to demonstrate compliance.
Stay informed: Sign up to stay informed about any further extension of the ban to other immigration routes such as Creative Worker and Government Authorised Exchange.
Seek professional advice: If you are unsure about the interpretation of associated administrative costs or need assistance in ensuring compliance, consider seeking professional legal advice to navigate the complexities of the new sponsor guidance.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
