Sponsor Licence: Suspension and Revocation

Key Takeaways

• The Home Office can downgrade a sponsor licence to a B-rating, suspend it or revoke it, and it does not have to take those steps in order. A breach that is serious enough can lead straight to revocation.
• Grounds for revocation come in three strengths. Some mean the licence will be revoked, some that it normally will be, and some that it may be. A breach does not have to be deliberate to count.
• A B-rating stops you sponsoring new workers and comes with a three-month action plan. The £1,579 fee must be paid within 10 working days, and you can be B-rated no more than twice in any rolling four-year period.
• A suspension letter gives you 20 working days to respond in writing with evidence. For most sponsors, that response is the best chance of keeping the licence.
• There is no appeal against revocation and no administrative review. A revocation can only be challenged by judicial review in the High Court.
• Revocation normally leaves sponsored workers with 60 days’ permission. The exceptions are workers with 60 days or less left, workers involved in the reasons for revocation and, under a temporary Home Office arrangement, care workers and senior care workers whose only reason for cancellation is the revocation.
• WorkPermitCloud prepares suspension responses, supports sponsors through action plans and advises on whether a revocation can be challenged. See our sponsor licence suspension service.

Introduction

This page is for organisations that hold a sponsor licence and have received, or are worried about, a downgrade, a suspension or a revocation, and for the HR teams and Key Personnel who deal with it. It explains how the Home Office decides what action to take, what each stage means for your business and your sponsored workers, how to respond, and what happens if the licence is lost. The duties that lead to enforcement action in the first place are covered in Sponsor Licence: Compliance and Duties.

How the Home Office Enforces Sponsor Duties

The Home Office treats a sponsor licence as a privilege rather than a right. In return it expects you to meet every sponsor duty and to act in line with immigration law, wider UK law and the public good. When it finds a problem, it chooses between three kinds of action. The rules on all three are in Part 3 of the sponsor guidance.

As a general rule, a relatively minor breach that you are willing and able to put right leads to a downgrade and an action plan. A more serious breach leads to suspension with a view to revocation, or to revocation with no suspension first. Part 3 gives four examples of a more serious breach: a significant or systematic failing, no longer meeting the eligibility or suitability requirements for holding a licence, a serious threat to immigration control, and behaviour that is not conducive to the public good. The Home Office does not have to downgrade before it suspends, or suspend before it revokes.

Downgrade, Suspension and Revocation at a Glance

Two structural points decide how far action spreads. Your rating applies to each type of licence you hold (Worker, Temporary Worker or Student), not to each route, so a downgrade for failings on one Worker route shows against every Worker route on the licence. And if you are licensed as a head office and all UK branches, a downgrade or revocation applies to every branch. Where branches hold their own licences, action against one does not automatically affect the others, but the Home Office will investigate them.

Will, Normally and May: The Three Kinds of Revocation Ground

Part 3 lists the grounds for revocation in three annexes, and the annex a ground sits in decides how much room the Home Office has. It is the first thing to check when a letter arrives, because it tells you what kind of response can make a difference.

Three points about the annexes are easy to miss. First, grounds for revocation "do not necessarily require breaches to be deliberate or made knowingly", so an honest mistake can still cost the licence. Second, the bans on passing costs to workers have commencement conditions: the certificate fee ban covers Skilled Worker certificates assigned on or after 31 December 2024 and, on the Global Business Mobility, Minister of Religion, International Sportsperson, Scale-up and Seasonal Worker routes, certificates assigned on or after 9 April 2025, while the licence fee ban covers costs recovered on or after 31 December 2024 for Skilled Worker and on or after 9 April 2025 for every other Worker and Temporary Worker route. The ban on recovering the Immigration Skills Charge has no such condition. Third, the full list runs to around eighty grounds, including some that apply only to particular routes such as Seasonal Worker or Government Authorised Exchange, so check the annexes in Part 3 against your own circumstances rather than relying on a summary.

Civil penalties for employing illegal workers appear in all three annexes, depending on how many penalties there are, whether they remain at the maximum amount and whether they are paid on time. How that works, and how to object to a penalty, is covered in Illegal Working and Civil Penalties.

What Usually Leads to Enforcement Action

Most action starts with a compliance check, either a visit to a site where your sponsored workers work or a check carried out digitally, by phone or by letter. The Home Office can also check what you have told it against information held by other government departments, such as payroll and tax records. How compliance checks work, and what officers look at, is covered in Sponsor Licence: Compliance and Duties. For the patterns we see in practice, read our guides on why sponsor licences get suspended, remote compliance checks and the automatic HMRC salary check.

Downgrading to a B-Rating

A new sponsor licence is granted with an A-rating. A B-rating is a transitional rating: it tells you the Home Office has found a problem it believes you can fix, and it gives you a fixed period to fix it. It is generally used for relatively minor breaches that an action plan can resolve.

What a B-Rating Stops You Doing

While you are B-rated you cannot:

• assign a Certificate of Sponsorship to any new worker. You can still assign one to a worker you were sponsoring before the downgrade who needs to extend their permission, up to the number of certificates the action plan allows
• add branches or new routes to the licence
• use the automatic process for replacing your Authorising Officer or Key Contact, or for adding Level 1 Users, if your licence had it

Assigning a certificate to a new worker while B-rated is a mandatory ground for revocation. The Home Office monitors the certificates you assign while B-rated and will revoke the licence if it finds this has happened, whether during the action plan or later.

Responding to a Proposed Downgrade

Before downgrading, the Home Office writes to explain what it proposes and why. You have 20 working days from the date of that letter to respond in writing, including any evidence. The deadline can be extended at your request, but only where the Home Office is satisfied there are exceptional circumstances, and there is no oral hearing. If new evidence comes to light during that period, you are given a further 20 working days to respond to it.

The Home Office aims to decide within 20 working days of receiving your response. If you do not respond in time, it goes ahead with whatever action it considers appropriate. A downgrade takes effect from the date of the decision letter.

The Sponsorship Action Plan

If you are downgraded, you are asked to pay for an action plan setting out what you must do to regain your A-rating. The fee is £1,579, and the current figure is always in the Home Office fees table. When you are notified, you have three options.

Every action plan runs for a fixed three months, which the Home Office regards as the most time needed to put the problems right. It might require better record keeping, tighter control over the staff who assign certificates, or better communication between branches so you know when a sponsored worker has not turned up for work. The number of certificates you can assign for extensions during the plan is set in the plan itself.

At the end of the three months the Home Office carries out a further compliance check, normally only once during the plan unless it has reason to suspect a new problem. You can ask for the check earlier, but only do so if you are certain every requirement has been met, because the outcome applies whenever the check takes place.

How Many Times You Can Be B-Rated

You can be B-rated and subject to an action plan no more than twice in any rolling four-year period, and for no more than three months at a time under any single action plan. The four-year period is counted from the date your licence was first granted, and then from each four-year point after that. If you have already been B-rated twice within one of those periods and the Home Office finds you again meet the criteria for a downgrade, it revokes the licence instead.

Some summaries still describe the limit as two B-ratings while the licence is valid. That wording comes from the time when licences expired after four years. Most licences now remain valid indefinitely, apart from Scale-up and UK Expansion Worker licences, which last up to four years, and the rule in Part 3 is the rolling four-year period.

Sponsors With a Provisional Rating

A UK Expansion Worker sponsor with a Provisional rating cannot be downgraded to a B-rating. If it fails to meet its sponsor duties, the Home Office does not issue an action plan. Part 3 says it will consider revoking the licence, and Part 1 says it will normally revoke it. The Provisional rating is explained in Sponsor Licence: How to Apply.

Sponsor Licence Suspension

A suspension puts the licence on hold while the Home Office investigates or decides whether to revoke it. It is not a final decision, but it is usually a step towards revocation unless your response changes the Home Office’s view.

Why a Licence Is Suspended

The Home Office may suspend a licence where it believes you are breaching your sponsor duties, pose a threat to immigration control, or are behaving in a way that is not conducive to the public good. Where a mandatory ground in Annex C1 applies, it either revokes straight away or suspends while it investigates. Where the grounds are in Annex C2 or C3, it usually considers a downgrade first, but it can suspend without downgrading. Part 3 gives two examples: non-compliance that has continued over a period of time, and several breaches that are minor on their own but together point to a more serious or systematic failing. Part 3 also says that where Annex C2 or C3 grounds arise and the Home Office has reasonable grounds to suspect a breach or a threat to immigration control, it will normally suspend first while it investigates.

One kind of suspension has its own deadline. If the Home Office deactivates inactive SMS accounts and you are left with no active Level 1 User, it suspends the licence and gives you 28 days from the date of suspension to nominate an eligible Level 1 User. If you do not, it will normally revoke the licence. The process is explained in Sponsor Licence: SMS and Key Personnel.

For every other suspension, the letter takes one of two forms. Either the Home Office already has enough evidence to suspend without investigating further, and sets out its reasons, or it gives initial reasons and says a full investigation will follow. In the second case it may not be able to say how long the investigation will take, but it will update you at regular intervals.

What Suspension Means for Your Business

• The suspension applies in every route on your licence, and your entry is removed from the public register of sponsors while it lasts.
• You cannot assign any Certificates of Sponsorship.
• You can still log in to the SMS, but some functions are blocked, including requesting additional certificates and creating or assigning them.
• The automatic process for replacing your Authorising Officer or Key Contact and adding Level 1 Users is suspended, if your licence had it.
• Every sponsor duty continues. Reporting, record keeping and right to work checks do not pause, and falling behind on them during the suspension gives the Home Office more to consider.

What Suspension Means for Your Sponsored Workers

• Workers you already sponsor who have valid permission are not affected unless and until the licence is revoked. They can carry on working as normal.
• Any application a worker makes using a certificate you assigned before the suspension is not decided until the suspension is resolved, unless it is refused for another reason. The same applies to any settlement application you support.
• A worker who has already been granted entry clearance on a certificate you assigned before the suspension can still travel to the UK and start work, provided the licence has not been revoked by the time they travel. The Home Office advises workers to check the register of licensed sponsors before they travel, and our sponsor licence status check does the same thing.

How to Respond Within 20 Working Days

You have 20 working days from the date of the written notification to respond. Part 3 describes this as your opportunity to seek a review of the decision and to set out any mitigating arguments. There is no oral hearing, so everything you want considered must be in writing, and you should send all your representations and evidence within the period. More time is given only where the Home Office is satisfied there are exceptional circumstances.

The Home Office may interview you if it considers it necessary, but it will not normally do so where it has conclusive evidence of a breach. If it identifies further reasons for the suspension during the 20 working days, including from interviews with your sponsored workers, it writes to you again and gives you another 20 working days to respond to the new reasons.

A strong response usually:

• deals with every ground in the letter, one at a time, saying which you accept and which you dispute, and why
• supports each point with documents, such as contracts, payslips, right to work checks, reporting records and evidence of the work a sponsored worker actually does
• shows, where you accept a failing, what has already been put right and what will stop it happening again
• shows that the processes and systems you need to meet your duties are now in place
• arrives on time, because if nothing is received within the deadline the Home Office goes ahead with whatever action it considers appropriate

What Happens After You Respond

The Home Office considers your response and may ask for information from a compliance officer, other government departments and agencies, local authorities, the police, a foreign government or other bodies. It aims to give its final decision within 20 working days of receiving your response, unless the case is exceptionally complex or it is waiting for information from a third party, in which case it tells you about the delay. Any action takes effect from the date of the decision letter, which is sent by Royal Mail Signed For or by email.

The outcome can be one or more of the following:

• reinstating the licence with an A-rating
• reinstating the licence with a B-rating and an action plan
• preventing you from assigning any new certificates
• preventing the use of certificates you have assigned that have not yet been used
• revoking the licence

If the licence is reinstated with a B-rating, you are not given a further 20 working days to respond to the downgrade, because that stage was completed during the suspension, and your certificate allocation can be reduced or set to zero. If the Home Office decides not to revoke, it lifts the suspension and restores your entry on the register.

Sponsor Licence Revocation

When the Home Office Revokes a Licence

Revocation can follow a suspension or a failed action plan, or come without either. Part 3 gives these examples of when it happens: you stop trading or never had a trading presence, you no longer meet the requirements of the routes you are licensed for, there is a serious or systematic breach of your sponsor duties, you pose a threat to immigration control, you are convicted of a relevant criminal offence or issued with a specified civil penalty, or you behave in a way that is not conducive to the public good. Where a mandatory ground in Annex C1 applies, Part 3 says the Home Office can revoke immediately and without warning. The High Court has held, however, that revoking on a mandatory ground without first giving the sponsor a chance to respond can be unlawful, as explained in the section on challenges below.

The decision is sent to you in writing. Surrendering the licence does not avoid it: if you ask to surrender while you still sponsor workers, the Home Office revokes the licence and cancels the workers’ permission.

What Revocation Means for Your Business

• The licence is revoked in every route. You cannot sponsor anyone, and your entry is removed from the register of sponsors.
• Every certificate you have assigned becomes invalid, so any application for entry clearance made with one is refused.
• You can no longer log in to the SMS.
• Any Immigration Skills Charge you have paid is not refunded, as set out in Part 2 of the sponsor guidance.
• There is no right of appeal, and you cannot apply for a new licence until any cooling-off period has passed.
• The revocation follows your Key Personnel to any other sponsor for a period. See the section on cooling-off periods below.

What Revocation Means for Your Sponsored Workers

When a licence is revoked, the Home Office tells every sponsored worker promptly, but does not tell them the reasons. It may then cancel their permission. Paragraph SUI 34.1 of the Immigration Rules allows this but does not require it, and the approach depends on the worker’s circumstances. The detail is in the Home Office’s cancellation and curtailment guidance for caseworkers.

When the main worker’s permission is cancelled, a dependant’s permission is normally cancelled as well, except in exceptional cases, and normally to the same date. The temporary arrangement for care workers does not mention dependants. The Immigration Rules allow a dependant’s permission to be cancelled on that basis only where the main worker’s permission is, or has been, cancelled, so the ground does not arise while the care worker’s own permission stands. Beyond that, the guidance does not say how dependants are treated under the arrangement.

Cancellation can never extend a worker’s permission beyond its original expiry date. A worker who has not made a new application by the time their permission ends must leave the UK or face enforced removal, and remaining in the UK after permission expires can lead to applications to come to the UK in the next 10 years being refused.

What a worker can do next, including finding a new sponsor and making a change of employment application, is covered in Skilled Worker: Job Loss and Second Jobs. Care workers should also read Care Worker and Health Routes.

Can a Worker Keep Working After Revocation?

The Home Office’s sponsor guidance and its cancellation guidance do not say whether a worker who was not involved in the reasons for revocation can keep working for the sponsor until their permission is cancelled or expires. The short GOV.UK page for employees says a worker will have to leave their job and the UK unless they make a new visa application within the time they have left, but does not say whether they must stop work before that time runs out.

The worker’s permission, and its conditions, continue until it is cancelled or expires. Because the point is not settled, workers should take advice before relying on it. A sponsor in this position should also take advice before continuing to employ the worker, because the question is unsettled for both of you.

The rule on second jobs is settled. A sponsored worker may only do supplementary employment while they remain working for their sponsor in the job recorded on their certificate. If the sponsored job ends, any second job must stop too. The only exception is narrow: GP specialty trainees may continue supplementary employment in the four months after their certificate ends. Our guide to keeping a second job after a sponsor licence is revoked explains how this works in practice, and our additional work check lets a worker test their own position.

Challenging a Suspension or Revocation

There is no right of appeal against a downgrade, a suspension or a revocation, and administrative review does not apply to sponsor licence decisions. How you can challenge depends on the stage you are at.

Before a Decision Is Made

During a proposed downgrade or a suspension, your written response within 20 working days is the challenge. Treat it as the main opportunity, because once the decision is made there is no process in which you can simply put your case again.

After a Licence Is Revoked

The only route is judicial review, which asks the High Court (Administrative Court) to decide whether the decision was lawful, rather than whether it was right. Grounds usually concern the process followed, a misreading of the guidance or the evidence, or a decision no reasonable decision-maker could have reached. The court has quashed a revocation where the sponsor was not given a fair opportunity to respond to the Home Office’s concerns before a mandatory ground was applied, in R (TJ Trading Express Ltd) v Secretary of State for the Home Department [2025] EWHC 1274 (Admin), which you can read in full.

• A pre-action protocol letter is sent to the Home Office first, setting out why the decision is said to be unlawful. The Home Office is normally expected to reply within 14 days.
• The claim must be issued promptly and in any event within three months of the decision. The test is promptness, so waiting until the end of the three months can itself count against you.
• The court can grant interim relief while the claim is decided, but it is not automatic, and bringing a claim does not by itself stop the Home Office acting on your sponsored workers’ permission.
• If the court quashes the decision, the Home Office usually has to decide again. That does not guarantee the licence will be restored.

Separately, if a licence has been revoked in error, the Home Office contacts the sponsor to arrange for it to be reinstated, and no cooling-off period applies. Judicial review needs specialist advice from the start, and time is short. See our judicial review service.

Surrendering Your Licence

You can surrender a licence if you no longer want to sponsor workers and have no sponsored workers still working for you. You do this through the SMS, or through the sponsor change of circumstances form if you have no Level 1 User, and you sign a declaration. You can surrender every route or only some of them. The licence fee is not refunded.

• If no compliance action is under way, you can apply for a new licence at any time, with the full fee and all the documents for the routes you want.
• If you surrender while the Home Office is taking compliance action against you, you cannot apply again for 12 months from the date it accepts the surrender, or 24 months if you have had, or would have had, a licence revoked more than once.
• If you still have sponsored workers when you ask to surrender, the Home Office revokes the licence and cancels the workers’ permission.

Reapplying After Revocation: Cooling-Off Periods

A new application made during a cooling-off period is refused automatically, even if the problems behind it have since been fixed. The length depends on why the licence was lost, and the full table is in section L9 of Part 1 of the sponsor guidance.

Where more than one cooling-off period applies, the longest one applies.

When Your Key Personnel Carry the History With Them

A revocation follows the people named on the licence. If any of a sponsor’s Key Personnel was previously named as Key Personnel at an organisation in one of the situations below, that is a ground on which the Home Office will normally refuse the sponsor’s licence application, and, once a licence has been granted, a ground on which it will normally revoke it. The situations are an organisation:

• whose licence was revoked within the last 12 months, or within the last 24 months if it was revoked more than once while they were named
• that is one of two or more organisations, where they were named, whose licences were revoked within the last 24 months
• whose licence application was refused within the last six months, unless one of the limited exceptions in Part 1 applies

A revocation caused only by the inactive SMS account process is disregarded. In deciding what to do, the Home Office looks at how serious the past conduct was and what has been done to improve, how long ago it happened, any mitigating circumstances, and whether the person was involved with a sponsor removed for abuse or serious non-compliance within the last five years. Setting up a new company does not reset the clock for the people behind it.

What a New Application Must Show

Once any cooling-off period has passed, a new application is treated like any other, with the full fee and all the documents for the routes you apply for. You must also show that you have dealt with every reason your previous licence was revoked. Where the revocation involved dishonesty or deliberate misconduct, the Home Office requires compelling evidence that you are now suitable to hold a licence. How to apply is covered in Sponsor Licence: How to Apply.

Reducing the Risk of Enforcement Action

Nearly every ground in the three annexes comes back to a sponsor duty, a Key Personnel rule or the way certificates are assigned. Each of those has its own guidance page:

• Sponsor Licence: Compliance and Duties for reporting, record keeping, right to work checks and compliance visits
• Sponsor Licence: SMS and Key Personnel for who must be in place, the rules on SMS log ins and the inactive account process
• Certificate of Sponsorship (CoS) for matching the role, occupation code and salary to the certificate

An internal audit before the Home Office carries out its own check is the most reliable way to find problems while you can still put them right on your own terms. Our free HR compliance audit is a starting point, and our sponsorship duties service covers ongoing support.

Detailed Guides on This Topic

• Sponsor licence revoked: can I keep my second job? How supplementary work is affected when a sponsor loses its licence.
• Why UK sponsor licences are suspended and how to protect yours The compliance failures behind most suspensions, and the records that help avoid them.

How Can WorkPermitCloud Help?

WorkPermitCloud is a Legal and HR-tech company specialising in UK business immigration and sponsor compliance. When a suspension or downgrade letter arrives, we work through every ground with you, gather the evidence and prepare your written response within the 20 working day deadline. If you are B-rated, we help you meet the action plan in the three months allowed and prepare for the follow-up check.

If your licence has been revoked, we advise on whether there are grounds for judicial review through our judicial review service, and on what a new application will need to show once any cooling-off period has passed. We also advise sponsored workers on where they stand. See our sponsor licence suspension service for how we can help.

Conclusion

Downgrade, suspension and revocation are separate stages, but the Home Office does not have to use them in order, and the annex a ground sits in tells you how much room there is to argue. The 20 working day response window is where most licences are kept or lost, so treat every letter as urgent, answer every ground with evidence, and keep meeting your duties while the Home Office decides. If the licence is revoked, act quickly on two fronts: take advice on whether the decision can be challenged, and make sure your sponsored workers know where they stand.

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