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How Much Does It Cost to Apply for a Sponsor Licence 2024

In the UK, when trying to employ foreign nationals, the businesses should assess the cost implications that this will incur. One of the most important steps that should be taken as early as possible is that a sponsor licence is acquired enabling the company to fill up particular positions with non- UK workers where there is no available local labor able or willing to do the job. But what is the cost of getting a sponsor licence? This was the question that arose for many organizations and companies wishing to apply for the sponsor license in the UK. The answer to this question is generally around the costs inherent in various factors such as the nature and size of the organization and type of employees that they are pursuing.

Costs associated with the application for a sponsor licence

The costs that are incurred to acquire a sponsor license are determined by the UKBA fee structure which classifies small and charitable organizations from the larger companies applying for the licenses. This tiered system makes sure that small businesses which wish to take part in the sponsorship scheme are not put off with prohibitive costs.

Small businesses and charities: The current application fee for smaller entities is £536. In order to qualify for the reduced fee the business should satisfy at least two of the following requirements:

Its annual turnover is not more than £10.2 million.

Its total assets do not exceed £5.1 million.

It has less than 50 employees.

Medium and large businesses: For bigger entities, applying for a sponsor licence attracts a premium that is considerably higher. Such companies are to pay £1,476. This is indicative of their higher potential and resources and also of the potential to sponsor even more overseas employees.

The charges that are payable in addition to application fees

While it is undeniable that the application fee is the most prominent cost incurred by the sponsoring employers, there are also other costs that the employers need to be mindful of, especially for those applicants who will have to be sponsored from countries outside of UK.

Certificates of Sponsorship (CoS)

After a company is awarded a sponsor licence, such a company should kepp issuing the certificates of sponsorship (CoS) to the non- British worker every time it employs foreign workers. A CoS, or Certificate of Sponsorship is an electronic document which provides a reference number that the respective worker can use when applying for a visa. The majority of visa types incur a fee of £199 per worker for the issuance of a Certificate of Sponsorship with some categories having exclusions.

Immigration Skills Charge

In addition to the application and CoS fees, a more recent charge known as Immigration Skills Charge (ISC) must be levied for every overseas worker a company sponsors under the Skilled Worker and Senior or Specialist Worker services. This is aimed at ensuring that businesses are restrained from depending on foreign labor but rather engaging in training their people.

For small or charitable organisations, the ISC is £364 for the first 12 months and £182 for each additional 6 months.

Large and medium firms pay above £1000 for the first twelve months and £500 for the next six months of theISC.

The ISC is a cost that recurs with most of the expenses and for most businesses that have a number of employees or will have a long term employee on a sponsorship its a cost even in their preparation. This is an expense for the entire sponsorship exercise that companies have to factor in.

Ongoing Compliance and Renewal Fees

Apart from the upfront expenses, businesses are also required to uphold their sponsor licence and adheire to the sponsorship rules set out by the UK Home Office. The licence has a four-year validity period, and an application for its renewal must be made in order to continue sponsoring foreign workers. The renewal fees are the same amounts as the fees for making the first application: £536 for small sized businesses and £1,476 for large corporations.

Also, compliance has indirect costs of its own as corporate organizations have to put in place stiff human resources plans in order to track the migrates they have sponsored and make any necessary adjustments to the Home Office.

Conclusion

It is crucial for any company which intends to employ foreigners to understand how much does it cost to apply for a sponsor licence. Primary costs may seem adequate at first but in reality, additional expenses like the Certificates of Sponsorship, the Immigration Skills Charge, and compliance costs over the years may prove to be difficult to bear.