Sponsor licence changes 2026: what UK employers need to do now
What changed, and when?
March 2026: updated sponsor guidance added a duty to inform sponsored workers about their UK employment rights (Bates Wells).
8 April 2026: sponsor licence fees increased and a wider right to work check duty began (OTS Solicitors).
20 May 2026: the Home Office reversed the wider right to work duty and tightened the definition of "operating or trading" (Lewis Silkin; Free Movement).
The official guidance is on GOV.UK: see the sponsorship guidance collection, Part 2: sponsor a worker and Part 3: sponsor duties and compliance.
What is the new duty to explain employment rights?
Sponsors must make sure sponsored workers understand their UK employment rights and keep evidence that they were told. Law firm Bates Wells lists seven areas to cover: minimum wage and working time, pension auto-enrolment, statutory leave and pay, health and safety, trade union membership rights, Equality Act duties, and grievance procedures. It reports that written statements on trade union rights are required from October 2026 (Bates Wells).
Evidence can include handbooks, contract terms, training records and a worker acknowledgment, for example by email. Workers who started before 6 March 2026 do not need individual records, but you should still be able to show that your HR systems communicate these rights.
How much did sponsor licence fees rise?
Reported fees from 8 April 2026 are £611 for small sponsors (previously £574) and £1,682 for large sponsors (previously £1,579) (OTS Solicitors). Visa and settlement fees also rose. Always confirm the current figures on GOV.UK before you apply or renew. See our immigration fees page for our own fees.
What is the "operating or trading" test?
The 20 May 2026 guidance explains that a sponsor must show genuine UK activity, such as providing goods or services to customers for reward. Charities and non-profits count as operating where they serve clients. The Home Office says it will refuse or revoke a licence where there is no genuine UK presence, or where an organisation was set up mainly to facilitate someone's entry or residence. Examples include paper companies with no customer transactions and "circular trading" only between related entities (Lewis Silkin).
What happened to the wider right to work check duty?
From 8 April 2026 the guidance extended sponsors' right to work check duties to people directly engaged by the sponsor. After criticism, the Home Office removed this on 20 May 2026 and told practitioners to disregard it. Appendix D on record-keeping was also clarified (Free Movement).
What should sponsors do now?
Check your employment contracts and handbook against the seven employment rights areas, and record how and when you told each sponsored worker.
Confirm you can show genuine UK trading or operations, with evidence such as customer contracts, invoices or service records.
Update your internal right to work procedures to match the 20 May position.
Review who your key personnel are and that they know the reporting duties in Part 3 of the guidance.
Budget for the higher licence and visa fees.
Get advice before responding to any Home Office compliance visit or request.
What does this mean for charities and social enterprises?
The rules apply to all licence holders. Charities and social enterprises that sponsor staff should pay particular attention to the operating or trading test and to the documentation of employment rights. Our charity law and social enterprise team can advise on how these duties fit with your governance.
Frequently asked questions
What changed for sponsor licence holders in 2026? The Home Office updated its sponsor guidance in March, April and May 2026. Key changes include a duty to make sure sponsored workers understand their UK employment rights, higher sponsor licence fees from 8 April 2026, and a stricter test of whether a sponsor is genuinely operating or trading in the UK.
How much is a sponsor licence in 2026? From 8 April 2026, the fee is reported as £611 for small or charitable sponsors (up from £574) and £1,682 for medium or large sponsors (up from £1,579). Check the current fee on GOV.UK before applying.
Do sponsors still have to carry out right to work checks on everyone they engage? No. An expansion of this duty from April 2026 was reversed on 20 May 2026. Right to work checks apply to employees and sponsored workers, not to everyone directly engaged by the sponsor.
Can a sponsor licence be revoked for not trading in the UK? Yes. The May 2026 guidance says the Home Office will refuse or revoke a licence where a sponsor has no genuine UK operating or trading presence, or was set up mainly to facilitate someone's entry or residence.
About this article
Written by: Sundre Communications, the content team that prepares Themis Crown Advocates Limited's articles.
Legally reviewed and approved by: Mya, Themis Crown Advocates Limited.
Published by: Themis Crown Advocates Limited, SRA ID 8008980, Companies House no. 15561948, 124-128 City Road, London EC1V 2NX.
Related reading
Need advice? Themis Crown Advocates Limited advises on immigration matters. See our immigration law page and employer fees. [Confirm the firm's sponsor licence advice scope before publishing.] A consultation costs £150 and lasts 30 to 60 minutes. Request a call or contact us. See our fees and pricing page.
This article is general information, not legal advice for your situation. It reflects the law and reported developments as at the date shown and may change.
