In 2025 it is believed that the UK sponsorship Management System (SMS) has undergone extensive changes aimed to improve compliance, increase protections for workers and preventing misuse of the system. These updates, made through updated guidance for sponsors released at the end of 2024, will bring more stringent guidelines for employers that sponsor foreign workers. Employers must be aware of these changes to avoid fines, including license suspension or the revocation of a license. In addition, there is an emphasis on reducing net migration numbers and increasing the use of digitalization in the processing of immigration.
Table of Contents
Key Changes in the Sponsorship Management System
1. No Passing on Sponsorship Costs
The most significant changes is that sponsors cannot charge workers who are sponsored for certain costs associated with sponsorship. This includes:
- Sponsor License Fees Employers are unable to more pass on the costs for getting or renewing a sponsor license.
- Certificate of Sponsorship (CoS) Costs Costs for CoS that are assigned from and after the 31st of December, 2024 are the sole responsibility of the employer.
This measure is designed to safeguard skilled workers from being exploited by ensuring that employers take on this responsibility.
2. Personal Capacity Sponsorship Banned
The new guidelines prohibit companies from sponsoring employees for personal tasks that benefit an individual instead of the business. Examples include roles such as domestic workers (e.g. or nannies housekeepers, nannies) are not eligible for business sponsorships. These exceptions are only applicable for diplomatic households that are as per the International Agreement route.
3. Stricter Key Personnel Requirements
The revised regulations call for stricter requirements for key employees within sponsoring organizations, specifically that of the level 1 user who is responsible for the sponsorship process. The changes include:
- At at least one Level 1 user must be an established employee (e.g., British citizen or someone who has indefinite leave to stay).
- The individual must also play the position of partner, director or an employee of the business.
- All key personnel should be able to show valid National Insurance number unless exempt.
These regulations are designed to enhance accountability and control in the organizations that sponsor them.
4. Enhanced Genuineness Test
The Home Office has introduced a more thorough assessment to make sure that the job opportunities provided to workers sponsored by sponsors are legitimate. Sponsoring businesses must demonstrate that the position was not designed solely to encourage immigration, and is vital for business operations. Employers could be subject to increased scrutiny of their recruitment and marketing procedures.
5. Greater scrutiny of those who have significant control
The past and actions of those who have substantial control (e.g. owners, directors or major shareholders, etc.)) over sponsoring corporations are now considered when evaluating applications for sponsor licenses. This is a step to stop misuse of the system for sponsorship by companies that have suspicious practices.
Government Strategy for Avoiding Exploitation of Sponsored Workers
The UK Government plans to align the compliance of employment law with the requirement for sponsor licences in order to enhance the regulations until 2025. The measures include:
- Creating the Fair Work Agency: The agency will be given the authority to reject or withdraw sponsor licences from companies found to be guilty of serious lawful employment violations.
- Strengthening the Compliance powers: The government will increase the oversight and regulation of sponsors who are licensed.
- Extension of the ban on passing sponsorship Costs: This ban is likely to extend to any other work route sponsored by the government that are not in the Skilled Worker VISA category.
- Enhancing the Duration of Action Plans for Sponsor Licences: Action plans can be valid for up to 12 months, with the possibility of revocation when the plan isn’t followed.
- Implementing a Cooling-Off of Sponsorship period: Businesses that have been stripped of their sponsor licenses for violations that are repeated or grave are subject to a minimum of two years restriction on reapplying for a sponsor license.
Proposed Rises to Immigration and Nationality Fees
The British government has proposed substantial fees for applications to become immigrants which could affect the applicants and the employers. The most prominent change is the doubled Certificate of Sponsorship (CoS) fee, increasing from PS239 to. Employers who sponsor skilled workers through the Skilled Worker Route will need to cover these cost, which could have an impact on recruitment budgets and strategies.
The most important proposed increases in fees include:
- Certificate of Sponsorship (CoS) Fee: Rising to PS525.
- Electronic Travel Authorisation (ETA): PS16.
- Naturalisation as an British citizen PS1,605.
- Naturalisation as an British outlying territories citizen PS1,070.
As per the UK government the changes are anticipated to bring in an additional PS269 million per year, which will help to ease the tax burden of the system for immigration for taxpayers.
Impact on Students and Skilled Workers
On January 2nd, 2025, the more strict requirements regarding finances in order to obtain UK student visas are set to come into effect. The requirements for living expense proof will be increased to:
- PlayStation 1,483 per month for classes in London.
- PS1,136 per month for courses that are not in London.
The skilled workers will also have to contend with an increase in income thresholds:
- New applicants must earn more than PS38,700.
- Families are required to reach higher income thresholds. They will need to rise to a PS38,700 level by the end of 2025.
Candidates must ensure that the they have funds for the duration of 28 consecutive calendar days prior to the date of application submission.
Sustained Focus on Illegal Working Enforcement
Fighting illegal work will remain an issue of great importance to government officials of the UK Government in 2025. Some of the key developments include:
- An increase of 20% in visits to illegal work enforcement and arrests in the period between January and October 2024.
- The targeting of high-risk industries like logistics, hospitality, construction manufacturing, and logistics.
- Inviting businesses to extend right-towork check to contractors who are self-employed as well as agency employees in order to minimize risk to reputation.
New Measures to Reduce Net Migration
Then, in November of 2024 the Prime Minister Kier Starmer unveiled the release of an Immigration White Paper aimed at decreasing migration. This could include a requirement for industries heavily dependent on workers from abroad to fund domestic workforce education. In addition, the Migration Advisory Committee (MAC) is currently examining the economic effects of immigration on the IT telecoms, engineering, and engineering sectors. Its findings are that could influence the future changes.
New IT Services for Sponsors
The Home Office’s “Sponsor UK service is gradually substituting the existing SMS, which was the Sponsor Management System (SMS). This platform, which is currently used by Government Authorised Exchange sponsors, will be extended to other categories in 2025-2026. In contrast to the SMS, the ‘Sponsor UK is not able to support Level 2 Users. It requires all users to meet the Level 1 User requirements.
Reforms to the EU Settlement Scheme
In the last week of in January, 2025 the federal government will begin to roll out automated decision-making procedures for holders of pre-settled status to be granted settled status. In addition, the rules regarding residency continuity and cancellation of permissions for those who are already settled will be clarified.
Full Roll-Out of Electronic Travel Authorisations
In April 2025, the United Kingdom’s Electronic Travel Authorisation (ETA) scheme will be fully applicable for European citizens. The digital permit is required for those who are not visa-free travelling in the UK as tourists creative workers, visitors, or transiting. Applications for Europeans will be open from March 2025.
Family Route Reform
The MAC is examining the finances for families visas The report is due by June 20, 2025. When the recommendations are analyzed by the Home Office, may implement changes to the Immigration Rules, potentially by the end of the year 2025.
Conclusion
The 2025 changes on the sponsorship Management System reflect a concerted effort by the Home Office to tighten compliance and reduce net migration and increase protections for workers. Employers should be aware of the changes in order to stay compliant and avoid fines. Examining the processes, adjusting budgets and maintaining a constant communication with all stakeholders is essential to navigating the new requirements efficiently.