Consequence	Detail	Source
You cannot sponsor anyone new	No new CoS until you sign up to the action plan, pay the fee, and have your A-rating restored	C8.11
The fee	£1,579 for an action plan	GOV.UK, Your licence rating
The deadline	Pay within 10 working days of the decision letter, via SMS. Do nothing, and your licence is revoked	C8.14
The duration	Fixed at 3 months. Not negotiable	C8.17
No new branches or routes	Frozen for the action plan period	C8.15
Existing workers	You may still assign a CoS to a worker you already sponsored who needs to extend	C8.15

Before downgrading, UKVI writes to you with the proposed action and reasons, and gives you 20 working days to respond in writing. There is no oral hearing (C8.6–C8.7).

At the end of the three months there are three possible outcomes (C8.18):

You have not met the plan → licence revoked.

New areas of non-compliance emerge → a second action plan, and a second fee.

You have met everything and there are no other concerns → A-rating restored.

The hard limit most employers do not know: you can be B-rated twice in any rolling 4-year period, measured from the date your licence was first granted. If you meet the downgrade criteria a third time, UKVI will revoke (C8.22–C8.24). And if you use a CoS to sponsor a new worker while B-rated, your licence is revoked (C8.21).

Outcome 3: sponsor licence suspension

Where UKVI believes you are breaching your duties or pose a threat to immigration control, it may suspend your licence while it investigates (C9.1). During suspension:

• you cannot assign any CoS (C9.2)
• the suspension applies across all routes you are licensed for, and your entry is removed from the public register of sponsors (C9.3), which clients, candidates and competitors can all see
• workers you already sponsor who hold valid permission are not affected, unless and until the licence is revoked (C9.4)

You have 20 working days from the written notification to respond, in writing, with evidence and any mitigation. There is no oral hearing (C9.11). UKVI will normally tell you its final decision within 20 working days of receiving your response (C9.17).

The possible endings are: reinstatement with an A-rating, reinstatement with a B-rating and action plan, a block on assigning new CoS, a block on using already-assigned CoS, or revocation (C9.16).

Outcome 4: sponsor licence revocation

This is the outcome employers cannot recover from, and the guidance is blunt about it.
"If we decide to revoke your licence, we will write to you to tell you of this. There is no right of appeal and you will not be allowed to apply for a sponsor licence again until at least 12 months have passed since the date we notified you of the revocation (or 24 months if you have had your licence revoked on more than one occasion)." — C9.5

Practical note, not a statement of the guidance: because there is no statutory appeal, the only route of challenge is judicial review of the decision, usually preceded by pre-action correspondence. Judicial review tests whether the decision was lawful and rational, not whether it was harsh. It is expensive, it is slow, and the odds are poor. In practice that makes prevention the only strategy worth investing in.

The decision flow, in one view

Sponsor licence revocation: the grounds that end a licence outright

Annex C1 lists circumstances in which UKVI will revoke. Among them:

• you knowingly gave false information on your licence application, and the truth would have led to refusal (Annex C1(a))
• you have an unspent conviction for a relevant offence listed in Annex L4 of Part 1 of the sponsor guidance (Annex C1(b))
• you stop having a trading or operating presence in the UK, including through sale, liquidation, bankruptcy or simply ceasing to trade (Annex C1(c))
• you lose (or never held) the registration, inspection, licensing or planning consent needed to trade lawfully in your sector (Annex C1(d)–(e))
• you receive two or more civil penalties for employing illegal workers, remain liable after appeal rights are exhausted, and at least one of those penalties is at the maximum amount (Annex C1(h))

Note on referencing: the guidance uses both a section "C1" (reporting duties) and an "Annex C1" (mandatory revocation grounds). They are different things. The grounds above are from Annex C1.

That last one connects to the biggest financial risk sitting alongside your licence.

Right to work: where sponsor duties and civil penalties collide

You must carry out a right to work check before the relevant employment starts (C7.29). This is a duty under section 15 of the Immigration, Asylum and Nationality Act 2006, which is primary legislation and sits separately from your sponsor duties. It applies to every employee, sponsored or not (C7.27).

Since 13 February 2024 the civil penalty starting point is £45,000 per illegal worker for a first breach and £60,000 per illegal worker for a repeat breach within three years (Code of practice on preventing illegal working, 13 February 2024).

And the sponsor consequence stacks on top: if you are issued with a civil penalty, UKVI is likely to revoke your licence, and you will not be eligible for a new one until at least 12 months after you have paid it in full, or up to 5 years if you receive more than one (C7.30).

UKVI also publishes the names of employers issued with civil penalties for illegal working on GOV.UK (C7.32). Assume your clients will find it.

How to prepare for a Home Office compliance visit: the checklist

Work through this now, not when the officer is in reception.

Records (Appendix D)

A compliant right to work check on file for every sponsored worker, dated before employment started
Passport/visa or share code evidence, current contact details and home address for each worker
Records retained for the required period and retrievable within minutes, not days
Follow-up right to work checks diarised for every worker with time-limited permission

Reporting via the Sponsorship Management System (SMS)

Start-date changes, non-attendance, significant absences and early terminations reported within the deadline

Changes to a worker's role, salary or work location reported Changes to your organisation (address, ownership, structure) reported within 20 working days

Key personnel and systems

Authorising Officer, Key Contact and Level 1/2 Users named correctly, still employed, and able to explain their duties

SMS access reviewed whenever staff leave or change role

Visa expiry tracking that prompts action before permission lapses

Genuine vacancy and CoS discipline

Every CoS assigned for a genuine role meeting the route's skill and salary requirements Job description, duties, hours, location and pay match the CoS and match what the worker would say if asked

Payroll matches the CoS salary, remembering that UKVI cross-checks with HMRC (C7.7)

You can evidence why the role needs sponsorship and how the worker was recruited

Premises and third parties

Every site where sponsored workers actually work is known to UKVI

Client and contractor sites have been told UKVI may visit unannounced, and have agreed to cooperate

Reception and front-of-house staff know who to call the moment an officer arrives

On the day

A named person responsible for greeting the officer and notifying your adviser

Personnel files and SMS access available immediately

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A written note taken of what was asked, what was inspected, and who was interviewed.

You will need this if a decision letter follows

Where employers get caught

In practice, the recurring failure points are these:

1. Salary drift. The worker got a pay change, a role change or a new work location, and nobody reported it. The CoS and the payroll no longer agree.

2. The forgotten follow-up check. The initial right to work check was perfect. The follow-up, due when permission expired, was never done.

3. Key personnel who left. The Authorising Officer resigned eighteen months ago and the licence still names them.

4. Records that exist but cannot be found. "On demand" (C7.10) means on demand.

5. A role that has quietly stopped being eligible. After the 22 July 2025 changes, the salary floor rose to £41,700 and the skill threshold to RQF Level 6, so roles that qualified in 2024 no longer do. See our guide to the £41,700 threshold and the RQF 6 rule.

6. Budgeting that ignores the real cost. The Immigration Skills Charge and associated fees are frequently under-provisioned. See the true cost of sponsoring a worker in 2026.

Home Office compliance visit FAQs

Can the Home Office visit without warning?

Yes. A Home Office compliance visit can be announced or unannounced, and can happen at any time, including before your sponsor licence application has been decided (C7.9). There is no notice period you are entitled to.

Can I refuse entry until my solicitor arrives?

No. You must allow full access to any premises under your control on demand (C7.10). You can and should notify your adviser immediately, but you cannot make access conditional on their arrival. Refusing entry is itself a breach of your sponsor duties.

Will the compliance officer tell me the outcome on the day?

No. The officer will not give any indication of their assessment during the check (C7.18). You will be notified of the decision in writing afterwards (C7.23).

What happens to my sponsored workers if my sponsor licence is suspended?

Workers you already sponsor who hold valid permission are unaffected during the suspension, unless and until the licence is revoked (C9.4). You cannot assign any new Certificates of Sponsorship while suspended (C9.2), and your entry is removed from the public register of sponsors (C9.3).

Can you appeal a sponsor licence revocation?

There is no right of appeal against sponsor licence revocation (C9.5). The only route of challenge is judicial review. You must wait at least 12 months before reapplying, or 24 months if your licence has been revoked more than once.

How long does a sponsor licence B-rating last?

Action plans are fixed at 3 months and cannot be extended (C8.17). You can only be B-rated twice in any rolling 4-year period; a third downgrade results in revocation (C8.22–C8.24).

How much is the sponsor licence action plan fee?

£1,579, payable within 10 working days of the decision letter via your SMS account. If you do not pay, your licence will be revoked (C8.14).

What is the penalty for employing an illegal worker?

The civil penalty starting point is £45,000 per illegal worker for a first breach and £60,000 per worker for a repeat breach within three years. If you receive a civil penalty, UKVI is likely to revoke your sponsor licence as well (C7.30).

Free: "Is Your Sponsor Licence Audit-Ready?"

We have condensed the record-keeping, reporting, key personnel and CoS requirements into a one-page self-check you can run through with your HR team this week.

Book a free Sponsor Compliance Health-Check

We will review your licence position and record-keeping and flag any risk before the Home Office does. No charge, no obligation.

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V Immigration Ltd is regulated by the Immigration Advice Authority (IAA), registration F202638454. This article is general information current as at 10 August 2026 and is not legal advice. Sponsor guidance, fees and thresholds change; confirm the position in force before relying on any point above or taking action on a live matter.

Sources

- Workers and Temporary Workers: guidance for sponsors part 3: sponsor duties and compliance (accessible) — published 20 May 2026, page last updated 5 June 2026

- UK visa sponsorship for employers: Your licence rating — action plan fee £1,579

- Code of practice on preventing illegal working: Right to Work Scheme for employers, 13 February 2024 — civil penalty levels

- Keep records for sponsorship: Appendix D

- Section 15, Immigration, Asylum and Nationality Act 2006