UK government bans sponsors from passing on certain immigration costs to skilled workers

The Home Office has published updates to its guidance for sponsors of Skilled Workers, with key changes linked to Certificates of Sponsorship issued on or after 31 December 2024. The revised guidance includes a strict prohibition on employers passing on to sponsored workers sponsorship-related costs, such as sponsor licence fees and Certificates of Sponsorship fees – those costs must now remain the responsibility of the sponsoring employer. The new guidance also prohibits sponsors from sponsoring workers ‘in a personal capacity’ and introduces additional grounds for licence revocation tied to non-compliance. The changes underscore the importance of reviewing sponsorship practices to ensure full compliance. We’ll speak to an immigration expert about that.

The revised guidance was issued on 31 December and 1 January and aims to ensure that the financial burden of sponsorship is fairly allocated between employers and employees. While employees remain responsible for certain costs, such as their visa application fees and the immigration health surcharge, employers are now explicitly prohibited from passing on costs that are directly tied to their responsibilities as sponsors. This includes fees for sponsor licence applications and Certificates of Sponsorship issued on or after 31 December 2024.

The explicit prohibition in the guidance illustrates the level of concern within the Home Office about this issue. It stems from reports of some employers using clawback agreements or other mechanisms to recoup costs from sponsored employees. In some cases workers have been left in a precarious financial position, with long-term repayment agreements leaving them in debt. Some agreements even made it difficult for employees to leave their jobs without incurring significant financial penalties, effectively tying them to their employer and limiting their mobility in the job market.

So, let’s hear more about the new guidance and what it means for clients. Earlier I caught up with immigration lawyer Alex Wright to discuss it: 

Alex Wright: “What the Home Office are asking employers to do is something that most reputable employers are doing already which is to not pass the costs of sponsorship on to the individual. So when you want to bring somebody into the UK as a skilled worker, it's perfectly legitimate to make sure they pay their own application fee, it’s perfectly fair for them to be paying their immigration health surcharge and some of the other associated Home Office fees. What the Home Office have restated in more forceful wording is that it's not okay for employers to pass on the actual cost of sponsorship itself. So these are things like, if you're applying for your sponsor licence, if you are going to be issuing a Certificate of Sponsorship to an individual, there are certain costs that, because you're getting the benefit of that worker and you're getting the benefit of that sponsorship, it's not okay for the costs that are associated with the employer to be passed on to the individual worker. The industry we've seen this being most of a problem with has been in the health and care sector where some of the arrangements have been such that, essentially, some of the clawback arrangements and the arrangements they've made to get these fees back off individuals has meant that people are essentially either in sort of debt whilst they're working, or they're in very long term, precarious financial arrangements with their employer which, I think, the Home Office are justified in saying, isn't okay. What they want to be doing is making sure that, yes, you know, it's fair to ask the employee to pay certain parts of their application, but the parts of it that directly benefit the employer, that are their responsibility, should remain with them.”

Joe Glavina: “Do you think most of our clients will be aware of this already and will be complying with this anyway?” 

Alex Wright: “Yes. Our clients, people we deal with, absolutely already are aware of these arrangements and we do not advise that anyone ever passes on the cost of sponsorship itself onto the individual worker. One of the conversations we do have with clients very regularly is about what is and isn't subject to a clawback agreement where it isn't fair to ask workers to pay certain parts of their application fee. Application fees themselves, the parts that workers can be liable for, are significant. If you're talking about bringing a family of three to the UK for a period of five years, you can be talking in application fees alone around £20,000 and I think it's completely understandable that employers want to have arrangements with workers where they will help with some of those costs just to get them to the UK, but what we would always stress is those arrangements need to be fair, clear and understood by the worker at the outset of their contract. So that could be things like, potentially salary sacrifices, clawback agreements, but we would say those should be proportionate and they should be on a sliding scale. So generally, by the time somebody has finished a five-year sponsorship with you, because you've had the benefit of their employment, all fees should be paid back by that point. There's no point putting huge salary sacrifices on, or making things very difficult for your employees, because they're not going to have a good quality of life, you're not going to have a happy employee and the Home Office might think that some of your arrangements, if they're essentially forcing people into debt or poverty whilst they're working for you, they're not going to have a particularly fond view of that if there is a compliance visit.”

Joe Glavina: “What’s your key takeaway for clients on the back of this piece of news, Alex?”

Alex Wright: “So, one of the points the Home Office is they are taking a much stronger view on compliance, the new government compared with the old one, in terms of the number of visits they're making and a number of licences we've seen revoked. One of the things that can happen to a sponsor if they're found not to be compliant with the law is they can be subject to an Action Plan and what that normally means is the three-month period of supervision where the Home Office will come in and say, you're doing this wrong but rather than revoke everything and put you in a really difficult situation we're going to give you a three-month sin bin and we're going to come back afterwards and see how you're doing. The Home Office have now made it clear that is potentially going to be extended up to 12 months which means that employers might find that if they are having these unfortunate arrangements with employers, if they are seen to be not complying with Home Office guidance, it’s not going to be something that's done and dusted within a few months. This is something that the Home Office are going to be looking at for a much longer period of time and that's going to have, I think, reputational damage and also potential additional costs if you then have to go down the route of doing audits, getting the lawyers in, trying to fix all those problems. I think the best thing to do is, if you're not sure whether the arrangements you have for your sponsored employees meet the Home Office guidance, ask. We will tell you. It’s not a problem. It’s so easy to avoid.”

That Home Office guidance Alex was referring to comprises a series of documents which were published on 31 December and 1 January and are available from the government’s website. We’ve included links to them in the transcript of this programme for you.

Workers and Temporary Workers - guidance for sponsors part 1: apply for a licence (accessible)

Sponsor a worker: sponsor guidance part 2

Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance