Sponsorship Licences: How Does the Home Office’s Guidance Affect the Cost of Sponsorship?

In this episode of our Workforce Worldview podcast, we join Osheenn Giam and May Cheung as they discuss the costs associated with sponsorship for sponsoring entities. They outline what costs are due for sponsoring an employee, what costs can be recouped from the sponsored worker and how the Home Office’s newest guidance could affect these costs.

What fees need to be paid for a sponsorship licence?

A variety of fees are associated with sponsorship. These include visa fees, a health surcharge of £1,035 and the skills charge levy, which can cost over £8,000 for a three-year visa.

Who pays the cost of fees associated with sponsorship?

Until recently, many sponsors passed on all the fees to the immigrating worker, except for the skills charge levy. However, as of 31 December 2024, the Home Office has prevented businesses from recouping the cost of the sponsorship licence and related administrative cost for fees assigned on or after 31 December 2024. But sponsors are not prohibited from passing on the cost of the visa application or the health surcharge.

How can a sponsor minimise costs if a sponsored employee leaves the company soon after joining?

While most sponsors cover all the cost for the sponsored employee, many make use of clawback agreements to protect their investment. A clawback agreement ensures that if an employee leaves the company before a certain amount of time has passed, they will need to repay part of the cost for the visa application.

Is there any way to recoup costs if the sponsored employee leaves after the period specified in the clawback agreement?

Typically, no, there is no way to recoup the cost once a sponsored employee leaves after the set period in the clawback agreement. However, depending on when the sponsorship ends, the Home Office may refund part of the immigration skills charge once a sponsoring entity reports the end of the sponsorship.

Any tips or advice?

There are lots of details to consider and May and Osheenn talk through plenty of do’s and don’ts. Key among them is to be aware of any updates in the guidance from the Home Office on what costs sponsors can and can’t recoup. Sponsors should also consider how they can recoup money while also assisting potential employees with large fees such as using clawback agreements or loans to the individual and, most importantly, talk to one of our immigration lawyers!