Business immigration updates for employers | January 2025

In the constantly evolving world of immigration, we have highlighted below the main updates and developments that have been released since Christmas 2024:

Key updates to sponsorship guidance

On 31 December 2024 and 1 January 2025, the Home Office made several changes to three sponsor guidance documents for Workers and Temporary Workers. The key changes are:

Ban on charging specific sponsorship costs to Skilled Workers

Sponsors in the Skilled Worker route are expressly banned from passing on any costs associated with the sponsorship licence or the Certificate of Sponsorship ("CoS") fee to workers. This includes recouping or attempting to recoup such costs, for example, through clawback provisions in the migrant's employment contract. These changes are aimed at stopping exploitation of sponsored Skilled Workers, particularly in the care sector. The guidance confirms that if a sponsor does pass on these costs, the Home Office 'will normally' revoke the sponsor's licence.

Sponsors should review their budgets, template employment contracts and their policies, to ensure that the costs of the sponsorship licence and/or the CoS are not being passed on to workers. If sponsors have issued any contracts to migrant workers since 31 December 2024, they should check whether the contracts contain clawback provisions or other terms requiring payment of these costs and if so, these provisions should not be enforced, and the relevant contracts should be updated to remove the clawback terms.

Key personnel clarification

For sponsors who applied for a licence on or after 31 December 2024, they must have at least one Level 1 user who is both (i) an employee, partner or director within its organisation; and (ii) a settled worker. Previously a sponsor had to have a Level 1 user which met each of these requirements, but these could have been two separate people. It also confirms that UK-based legal representatives can fulfil the roles of Key Contract, additional Level 1 user and Level 2 user.

In addition, the updated guidance confirms that sponsors must not appoint Key Personnel who are prohibited from being a company director for any reason including bankruptcy, subject to a specific exception. 

Personal capacity sponsorship

The updates also confirm that sponsorship licences must not be used to sponsor workers 'in a personal capacity', for example, sponsoring someone to work exclusively within an employee's household. The Home Office is edging closer to closing off the Skilled Worker route as a means of employing personal staff members in the UK.  

The guidance confirms that if a sponsorship licence is used in this way, the Home Office 'will normally' revoke the sponsor's licence. Further, the guidance confirms that if sponsors previously had permission to sponsor workers in a personal capacity, they must not assign any further certificates of sponsorship to sponsor workers on this basis.

Immigration Fee increases

Earlier this month, the Home Office put forward the draft Immigration and Nationality (Fees) Order 2025 and the draft Immigration and Nationality (Fees) (Amendment) Order 2025 which propose to increase certain immigration fees. Most notably for sponsors, it is proposed that the fee for assigning Certificates of Sponsorship ("CoS") will increase from £239 to £525. This significant fee increase may be part of the reason for the government's ban on passing the cost of CoS onto workers, as outlined above.

In addition, the Home Office proposes to increase the Electronic Travel Authorisation (ETA) fee from £10 to £16.

If you have any queries or require advice on these developments. Please contact the immigration team through the contact details below.