The Home Office guidance is clear that sponsor licence holders must report to it all significant changes to the business within 20 working days, and failure to do so can lead to downgrading, suspension or revocation of the licence.
Why does this matter?
A sponsor licence is always granted to a specific UK legal entity based on the current ownership structure, HR systems and ability to comply with sponsor compliance duties. It is not an asset that can simply transfer by agreement between the buyer and the seller. Where there is a change in direct ownership, for example a share sale results in a controlling number of shares being transferred to a new owner, or the business restructures into an Employee Ownership Trust (EOT), the new owner (buyer) will need to apply for a new sponsor licence if they wish to continue sponsoring visa holders.
This can easily be missed in corporate transactions, particularly where the employing entity remains the same, the trading name does not change, and sponsored visa holders continue in the same roles. However, from a Home Office perspective, the key question is whether direct ownership/control of the sponsor licence holder has changed, regardless of what is agreed contractually between parties.
What changes can trigger action?
Sponsors should take advice before completing any transaction involving:
- a sale of the business;
- a share sale involving a transfer of control;
- a merger or takeover;
- an internal corporate group restructure changing the immediate owner of the sponsor licence holder;
- a TUPE transfer arrangement involving sponsored workers;
- a change in beneficial ownership; and/or
- submitting a People with Significant Control (PSC) notification on Companies House
This is a useful reminder that immigration risk does not always follow the same analysis as employment, corporate or tax advice.
What about Companies House and PSC filings?
Sponsors should also ensure that Companies House filings are aligned with what has been reported to the Home Office. PSC information is publicly available, and companies must tell Companies House about changes to PSC information within 14 days of confirming the change. A PSC is usually someone who holds more than 25% of shares or voting rights, can appoint or remove a majority of directors, or otherwise exercises significant influence or control.
Home Office compliance action can be triggered by inconsistencies in records, and Home Office compliance officers may use information from all government departments, agencies or public sources when assessing whether a sponsor continues to meet its duties.
Why small oversights can become serious
The guidance states that sponsorship is a privilege, not a right, and that the Home Office can act where there are reasonable grounds to suspect a breach of sponsor duties. This is a relatively “light trigger” for enforcement action, meaning the Home Office does not need to wait until every issue is fully proven before suspending a licence and investigating further.
Practical steps for sponsors
Before embarking on a corporate transaction that could directly change ownership or control of a sponsor licence holder, consideration should be given to:
- building immigration compliance into transaction planning at an early stage.
- checking whether the transaction changes the direct ownership of the sponsor licence holder;
- identifying whether sponsored workers are transferring to another entity;
- reviewing whether a new sponsor licence application is needed;
- diarising the 20-working-day reporting deadline;
- ensuring Companies House PSC filings and Home Office reports are consistent; and
- keeping a clear paper trail explaining the transaction and its impact on sponsored workers.
How We Can Help
A change of ownership or control can have immediate sponsor licence consequences, even where the standalone commercial transaction appears straightforward. If your organisation holds a sponsor licence and is planning a sale, merger, acquisition or group restructure, our Immigration team can help assess whether a new sponsor licence is required, manage Home Office reporting obligations and protect the status of your sponsored visa holders in your workforce.
