11 things to consider before becoming a Licensed Sponsor

There’s so much noise today around easy access to international talent with the new Graduate Route visa for international students studying in the UK, the new High Potential Individual Visa and the loosening of rules for Tier 2 work visas. On the surface it looks much easier to become a Licensed Sponsor: the government has scrapped the resident labour test, lowered the salary threshold and is now providing uncapped Tier 2 work visas with a very low (1 in 20) rejection rate.

So we set out to do it for ourselves at DigitalGrads to find out if becoming a licensed sponsor is really that easy and we didn’t get all that far. Sponsorship seems much more relaxed than it was, but it’s still complicated. Here’s what we found out:

1. You need roles to fill before you apply to be a licensed sponsor

When applying for the licence, you need to know what roles you’re going to sponsor, it doesn’t make sense to do it in anticipation of something uncertain or far in the future.

2. There are additional costs that can mount up

While there is a cost for applying for a licence (usually lasts for 4 years), there is a per sponsored person per year cost as well (which is much less well advertised!). So for a small employer sponsor, it’s £536 to get the licence then per year: £199 per CoS assignment (1 for each worker) + £364 per year for the immigration skills charge (1 for each worker, most roles) – it’s not entirely clear but some of this may be payable upfront rather than a year at a time.

3. There is a minimum salary requirement for specific roles

For software developers it’s £33,300, for marketers £24,400, for sales execs £25,800. Plus a general minimum of £25,600 per year. 

4. Exceptions for new entrants

There is an exception to the minimum salary requirement for new entrants to the labour market – basically, people under 26 can have a lower minimum salary (70%) – but this can’t be used in all cases (for example, it appears it can be used following a student or graduate visa, but there’s a cumulative time limit). 

5. Exceptions for shortage occupations

There’s another exception for shortage occupations (80%) of which a Software Developer qualifies. So the minimum pay for a Software Developer could be reduced to £26,640 on that basis or £23,310 for someone qualifying as a new entrant.

6. Applicants incur costs too

There are costs to applicants (application fee and healthcare surcharge), if the applicant doesn’t have the means to pay these, potentially that’s another problem/cost for the employer. Approx. £1,200 to £2,100

7. You have to provide evidence of sponsorship being necessary

While the requirements for not being a domestic candidate seem to have been relaxed with the reported scrapping of the Resident Labour Test, you still have to provide evidence of sponsorship being necessary. 

If you identified this person as a result of a recruitment process, you should include copies of advertisements placed to recruit for the job, details of any applicants and why they were not suitable for the job. You should confirm whether the person is already working for you. If you have not advertised the job and the person you wish to employ is not currently working for you, you should confirm how you identified that this person was the most suitable for the job. This appears to only be for new hires (not sponsoring an existing employee).

8. You have to provide evidence that it’s a genuine role

To prevent abuse, they’ll look for evidence of it being a genuine role – for early start-ups with no trading history, no premises, tiny teams etc. it may be harder to show the role is genuine.

9. Get it wrong and there’s a 6+ month cooling-off period

It’s not forgiving – if you hash up your application, you can be subject to 6+ month cooling-off period before reapplying;

10. Potential risks to becoming a licensed sponsor

If you don’t meet your duties as a sponsor, you can be charged substantial extra fees; plenty of criminal offences and civil penalties too. 

11. You may incur extra legal fees

If you don’t feel confident and competent completing the application yourself the alternative would be to outsource the application to an external specialist with whom you would incur potentially substantial legal/consulting fees on top of the Home Office fees.


For genuine cases where it’s hard to find candidates and attempts have already been made to make the job more attractive, sponsorship may make sense. For the hassle, the cost and the risk, we think that most smaller tech employers would be better off looking at adding salary before investigating sponsorship. 

The detailed government guidance where we have extracted this information is a long, detailed read but well worth the time and effort if you plan to become a licensed sponsor.