‘Restoring Control Over the Immigration System’: The Future of Sponsorship

BY IRFAN ALI

The UK’s immigration sponsorship system enables businesses to hire international talent, allowing them to grow, address skill shortages, and enhance their competitiveness. For many businesses, a sponsor licence is considered a valuable and strategic asset, and whilst there are various work-related sponsorship routes available, the Skilled Worker route has been the most popular choice for businesses and workers. This may, however, change given the Government’s recent Immigration White Paper, with new Immigration Rules for Skilled Worker sponsors coming into effect on 22 July 2025. Irfan Ali, Legal Director at Irwin Mitchell LLP, explores the evolution of sponsorship and what the future may hold for this essential element of the immigration system.

In recent years consecutive UK Governments have intensified their narrative regarding efforts to reduce net immigration. As a result, we have seen a number of changes to the sponsorship route, some more significant than others, including a shift in sponsor compliance becoming a focal point. Recent policy changes and enforcement action appear to signal a transformative period for employers relying on international talent.

The evolution of Tier 2 (General) into Skilled Worker route

Going back a few years, to when Brexit dominated the headlines, many UK businesses raised concerns as to how they would be impacted with the end of free movement. This was especially the case for sectors – including construction, hospitality and manufacturing – that traditionally employed higher proportions of European nationals in vocational or traditionally lower skilled roles.

The sponsorship system itself has evolved over the years and was promoted as – and considered to be – the solution for businesses to plug the gap in skills shortfalls to meet recruitment needs. Many businesses were also encouraged to make speculative applications for a sponsor licence in preparation for Brexit.

We saw significant changes to the old work visa system (previously known as ‘Tier 2 (General)’), which was re-branded to the ‘Skilled Worker’ route and went live on 1 December 2020. Some changes included reducing the skill level for the role from RQF Level 6 to RQF Level 3 and thus extending the scope of sponsorship, removing the annual cap on work visas, and abolishing the Resident Labour Market Test, making the Skilled Worker route a popular route for many organisations and workers.

There were just over 26,000 Tier 2 (General) sponsor licences on the register of sponsors for the year ending 2019. This figure has risen significantly over the last few years and, as of 15 July 2025, there were almost 115,000 organisations with a Skilled Worker sponsor licence on the register.

‘Restoring control over the immigration system’

Following the liberalisation of sponsorship rules during the post-Brexit years, we now have a new Government and, with it, a new proposed direction. On 12 May 2025, the Government released its White Paper: Restoring control over the immigration system. This set out the Government’s plan of the changes they are looking to make to create an immigration system which promotes growth but is controlled and managed.

In her foreword to the White Paper, the Home Secretary stated:

‘During the last Parliament, the previous Government lost control not just of the number of people arriving, but of the entire immigration system, with serious consequences for public confidence, the working of our economy, public services, the housing market and community cohesion.’

The changes announced in the White Paper are significant and will impact not only businesses, but also the education sector and individuals.

The Statement of Changes to the Immigration Rules was subsequently published on 1 July 2025, with changes to the Skilled Worker and other work routes, as set out in the White Paper, coming into effect on 22 July 2025. (See ILPA’s detailed breakdown of the changes to Immigration Rules Appendix Skilled Worker (‘Appendix Skilled Worker’) and other work routes in the Statement of Changes.)

Policy changes impacting sponsorship

Several policy shifts since Brexit have redefined the sponsorship landscape with a distinct hardening of immigration policy, including changes that have steadily made sponsorship more complex and expensive.

As the White Paper sets out, the Government intends to go further with making sweeping changes to the current immigration system, ‘so that we can restore order, control and fairness to the system, bring down net migration and promote economic growth…’

The proposals will see the rules being tightened and we will see the return of some requirements from the Tier 2 (General) route.

There is a strong feeling that the changes do not create any real incentives for Skilled Workers to choose the UK as their destination of choice given that the Government wants to create a shift to boosting domestic talent:

‘Employers will be expected to boost domestic talent and skills if they want to recruit from abroad and we will explore new options to incentivise and invest in training and restrict employers who are not committed to increasing skills or following the workforce strategy from sponsoring skilled visas.’

While the emphasis on boosting domestic talent is understandable, businesses will require time to adapt. In any event, sponsors already pay a levy in the form of the Immigration Skills Charge. This was introduced on 6 April 2017, with the purpose behind the general pot being that the money collected from it would be used to address skills gaps in the UK workforce.

Developing and implementing effective training and upskilling programmes is not an overnight process. In the interim, limiting access to international talent may hinder growth, particularly for companies operating in fast-moving sectors where agility and speed are crucial to gaining a competitive edge and establishing market leadership.

Hike in sponsorship fees

The fees for sponsorship have increased over the years, with some hikes being more significant than others.

Last year, the immigration health surcharge (IHS) increased from £624 per year for an adult to £1,035 per year; for children, students, student dependants and individuals who have applied under the Youth Mobility Scheme route, the fee increased from £470 to £776 per year.

Recently, we saw a rise in the Certificate of Sponsorship fee from £239 to £525.

There are plans to increase the Immigration Skills Charge by 32%. This is currently £364 for small or charitable organisations, and £1,000 for a medium or large organisation.

Whilst large businesses may be able to absorb the increased cost of sponsorship, it does create a barrier for smaller businesses, and some outside London, who often operate on tighter budgets.

As costs increase, it is now commonplace for businesses to share the cost of sponsorship with the worker. Some have arrangements whereby the company provides an employee loan to cover the cost of sponsorship, or as a minimum will impose clawback agreements to recoup visa costs in the event an employee resigns / is dismissed.

From 9 April 2025, visa-related payments made by the applicant to the sponsor (or a related organisation) – such as salary deductions, an investment in the business or repayment of loans that relate to business costs, immigration costs or investments – will now be deducted from the worker’s proposed salary when considering if the worker meets the visa eligibility minimum salary requirement.

This could therefore reduce the salary that would be considered when determining if the minimum salary threshold has been met and could mean a sponsor may be unable to proceed with sponsorship altogether.

Sponsor licence guidance was updated in April this year to confirm the visa related fees that must be covered by the sponsor and cannot be passed on to the worker under any circumstances. It also confirmed that UKVI will normally revoke the sponsor licence if the sponsor recoups, or attempts to recoup, by any means, the costs that must be paid by the sponsor. This change is seen as an important protection for vulnerable migrant workers who risk being subjected to modern slavery and debt bondage.

The hike in fees highlights the cost of sponsorship for both employers and employees. The fee hike has deterred some employers from sponsoring international talent, or in some cases made them more reserved about sponsoring workers, which may contribute to increased recruitment challenges.

If the cost of sponsorship continues to rise based on the current rates, without any cap or limitations, sponsorship will certainly become unaffordable, not only for individuals (especially with dependant family members), but also for some businesses.

Increased salary thresholds

The standard minimum salary requirement for Skilled Worker visas was initially £25,600. This has risen significantly and is now £38,700 per annum (noting that lower thresholds apply in certain limited circumstances). This will be increased to £41,700 from 22 July 2025.

The increase in the minimum salary thresholds has meant that many businesses have had to re-visit their recruitment practices and plans, as a lot of organisations have found the recent increase to the minimum thresholds generally far exceeds the UK market rate, creating a disparity and unfairness amongst their existing workforce if they were to sponsor workers. Increasing salaries in line with the current threshold across the board is not a viable option for many businesses.

The rise of increased salary thresholds effectively means that sponsors must pay a premium for the privilege of sponsoring workers in the UK. The change appears to prioritise ‘higher-skilled’ roles, and while this may support a strategy of attracting high-value talent, it places additional strain on sectors that traditionally rely on lower-wage workers, such as hospitality and social care, and those outside London and the South of England.

Introduction (and future replacement) of the Immigration Salary List

The Immigration Salary List (ISL) replaced the Shortage Occupation List in April 2024 and removed the 20% ‘going rate’ discount. It also significantly reduced the number of eligible job roles. The Home Office motivation for this change was to incentivise employers to improve salary and working conditions to encourage domestic uptake of these roles in place of reliance on overseas workers.

The current version of the ISL raises questions about how roles are assessed for inclusion and whether the methodology reflects real-time labour market needs.

The ISL will be phased out in future changes to the Immigration Rules; the 1 July Statement of Changes added a new interim Temporary Shortage List that will provide time-limited access to the points-based immigration system. Given the number of changes being introduced, it is hardly surprising that businesses are finding it challenging to keep on top of everything.

Restrictions on social care workers

As of 11 March 2024, we saw a prohibition of care workers (Care Workers under SOC 6145/6135 and Senior Care Workers under SOC 6146/6136) from bringing dependents to the UK and the introduction of the requirement that only providers regulated by the Care Quality Commission (CQC) can sponsor these roles. These limitations aimed to address misuse but could discourage qualified applicants from choosing the UK as a destination for long-term employment. We certainly saw a decline in the number of applications after 11 March 2024.

More recently, there is now a new care worker recruitment requirement – essentially prioritising the recruitment of care workers in England from the pool of displaced workers. These are workers whose previous sponsors have had their licences revoked.

This is part of the current Government’s wider ‘Plan for Change’, which includes ‘linking immigration, skills and visa systems to grow our domestic skills, end reliance on overseas labour and boost economic growth.’

The 1 July 2025 Statement of Changes to the Immigration Rules set out that it will no longer be possible to sponsor care workers from overseas. This will significantly impact an already struggling sector.

Increased compliance scrutiny

While sponsorship provides considerable advantages, it also carries significant compliance responsibilities for organisations. A failure to meet the requirements can lead to enforcement action including having their sponsor licence downgraded, suspended or revoked.

We often find situations, particularly with smaller organisations, where they have applied for a sponsor licence when needing to sponsor a worker. However, once both the sponsor and worker applications are approved, the organisation may become complacent in maintaining their licence, until they need to sponsor a new worker or extend their current worker’s permission to stay.

A sponsor licence no longer expires after four years (there are however some exceptions) – a licence is now granted indefinitely. The four-year limit provided a good opportunity for sponsors to undertake an audit of status of their licence to ensure it was all in order before renewing the licence.

Seeing the scope of sponsor duties expanding, and the growing list of circumstances that enable UKVI to suspend or revoke a licence, this can make a licence vulnerable, especially if it is not properly maintained.

Non-compliance with sponsor obligations can severely disrupt business operations and affect an organisation’s ability to sponsor workers in the future.

The below figures look at compliance action (suspensions and revocations) taken against sponsors under the Skilled Worker route from 2019 to 2024.

Year	Skilled Worker Suspensions	Skilled Worker Revocations
2019	544	380
2020	324	291
2021	53	39
2022	331	273
2023	569	337
2024	1,693	1,494

From the data provided, it is evident that UKVI has intensified its enforcement activities, and it is likely that the upward trend in compliance action is to continue.

In this environment, proactive and robust sponsor licence management is no longer optional – it is absolutely critical. Sponsors must invest time and resources in maintaining rigorous internal processes, conducting regular compliance audits, and ensuring that all obligations are fully met to mitigate the risk of licence suspension or revocation.

The increased scrutiny from UKVI, especially within the care sector, has resulted in additional requirements being put in place when sponsoring care workers, namely the need to recruit from the existing pool of workers. We also saw a number of delays and information requests with Defined Certificate of Sponsorships. Are we therefore likely to see similar approaches and actions being taken with other ‘high risk’ sectors?

It will be interesting to see whether UKVI will utilise action plans more as a tool to work with sponsors in ensuring sponsor compliance, rather than taking a heavy-handed approach.

As the White Paper indicates, we can expect further compliance scrutiny.

‘We will therefore explore introducing further reforms to our sponsorship system, putting more responsibility and accountability on effective and responsible sponsors.’

It further states:

‘Alongside continual efforts to strengthen and improve visa decision making, and taking action where sponsors are falling short of their responsibilities, we will also be exploring a series of further measures to address this challenge:

Innovative financial measures, penalties or sanctions, including for sponsors of migrant workers or students, which will incentivise them to show greater responsibility in their sponsorship practices, as well as measures which will support compliance with visa conditions by migrants’

More responsibility is likely to fall on sponsors and the impact of non-compliance could be more significant.

Increase in enforcement activities

As well as sponsor compliance, UKVI has ramped up its illegal working enforcement activities:

‘Clamping down on illegal working forms a critical part of the government’s plan to strengthen the entire immigration system, restoring tough enforcement of the rules and undermine people smugglers using the false promise of jobs for migrants.’

The recent figures are:

‘Since 5 July (to 31 January 2025), both the number of illegal working visits and arrests have gone up by around 38%, when compared to the same period 12 months prior. There were 3,932 visits from 5 July 2023 to 31 January 2024 with 2,850 arrests, while 5 July 2024 to 31 January 2025 saw 5,424 visits with 3,930 arrests. This includes 828 illegal working visits conducted in January, the best performing January in the published timeseries (since 2019).

Since 1 July, the Home Office issued 1,090 civil penalty notices, with employers facing fines of up to £60,000 per illegal worker.’

The Government is also taking a hardline approach in an attempt to crack down on illegal working, with its plans to expand right-to-work checks to the ‘gig economy’:

‘This means that for the very first time, employment checks will be extended to cover businesses hiring gig economy and zero-hours workers in sectors like construction, food delivery, beauty salons and courier services.’

The new measures will certainly impact businesses and add additional administrative burden especially to those who are unfamiliar with immigration law generally.

Conclusion: what the future holds

There continues to be a need for skilled workers and the ability to hire international talent in the UK. This is especially true in certain industries, such as, for example, the rapidly evolving AI tech sector where it can be difficult to source skilled workers with the right qualifications and experience. However, with the proposed changes, we are likely to expect the rate of organisations applying for a sponsor licence to slow down and the numbers of registered sponsors will decline.

As UKVI enforcement tightens and costs rise, smaller businesses may be pushed to reconsider the long-term viability of international recruitment, which may ultimately impact their growth.

UKVI has been working on developing a better and updated Sponsor Management System, which has already been rolled out to certain routes. It remains to be seen whether the new system will enable sponsors to better manage their licence and sponsorship generally.

With a transition to a digital immigration system, this could enhance UKVI’s ability to conduct more effective and efficient compliance checks and we know that the Government is working on improving cross-departmental data sharing to capture more incidents of non-compliance. What is clear, however, is that effectively maintaining and managing a licence will be of paramount importance.

While the Government seeks to clamp down on rogue employers and reduce net migration, it must balance these goals against the needs of an economy that increasingly relies on global talent, especially within certain sectors.

Ultimately, the future of sponsorship in the UK will demand adaptability, strategic foresight, and a robust compliance culture. Employers who invest in legal guidance, internal training, and transparent processes will not only likely weather the changes but position themselves as leaders in a new era of ethical and sustainable migration.

The UK will still need to sponsor international workers, especially businesses that are looking to grow and become market leaders in their respective fields – this requires having the right people with the required skillsets to deliver on those goals.

Without a recalibration of priorities – balancing public sentiment with economic necessity – the UK risks entrenching labour shortages and constraining economic resilience in critical sectors.

Irfan Ali is a Legal Director at Irwin Mitchell LLP. He specialises in assisting businesses with sponsor licences, sponsor compliance and work visas.

ILPA invites members and other leading experts to contribute articles to its monthly blog. The views expressed in all blog posts are the authors’ own and are not necessarily those of ILPA.