Sponsor Licence Granted Following Previous Revocation and Extensive Home Office Scrutiny
Background
A client approached us following the refusal of his company's sponsor licence application.
The circumstances were unusual. The client had purchased an established domiciliary care business as an ongoing, trading business. As a new owner, he had not been aware that the company had previously held a sponsor licence which had subsequently been revoked.
Following the purchase, the client applied for a new sponsor licence. The application was refused on the basis that the cooling-off period following the previous revocation had not yet expired.
Our Challenge
We initially challenged the refusal by submitting a Pre-Action Protocol letter.
Our position was that the client was a new owner who had not been involved in the circumstances leading to the previous revocation. He had purchased a genuine, trading business and argued that he should not be penalised for the previous owner's sponsor licence history.
The Home Office maintained its position, relying on the definition of “you” in the sponsor guidance when applying the cooling-off provisions.
We considered pursuing judicial review proceedings. However, with only a short period remaining before the cooling-off period expired, we advised the client that it was more proportionate to wait and submit a fresh application once the restriction had expired.
Our Approach
Once the cooling-off period had expired, we prepared a fresh sponsor licence application using the priority service.
Given the previous history of the business, we anticipated that the Home Office would scrutinise the application carefully. We therefore approached the application as a compliance exercise, ensuring that the business could demonstrate both genuine trading activity and its ability to meet its sponsor duties.
The Home Office subsequently requested further information on several occasions.
We were asked to provide documentation relating to the business, its employees, employment contracts, payslips, bank statements, contracts for services, right-to-work checks, pension arrangements and the systems in place for monitoring sponsored workers and their immigration status.
Although much of this information had already been provided, we responded to each request fully and within the required deadlines.
The application was then referred for a compliance audit.
The Digital Compliance Audit
Before the audit, we reviewed the documentation again and prepared the client for the areas the Home Office was likely to explore.
The digital compliance audit lasted approximately 20–25 minutes. The Home Office representative went through the information already provided and sought clarification on various aspects of the business.
One issue concerned payments made from the client's personal bank account into the company's business account. These payments were legitimate director investment into the business, but it was important that the source and purpose of the funds were clearly explained.
This is an important point for sponsors: even legitimate transactions may need to be explained where they are not immediately clear from the evidence.
Our Outcome
The sponsor licence was approved the next working day following the compliance audit.
After the initial refusal, a Pre-Action Protocol challenge, a further sponsor licence application, multiple requests for information and a compliance audit, the client was finally able to secure his sponsor licence.
Summary
This case demonstrates that a sponsor licence application is not simply about completing an application form and submitting supporting documents.
Where a business has a previous sponsor licence history, or where the Home Office identifies concerns during the application process, the level of scrutiny can be significant.
It is also important not to assume that attending a compliance audit means the licence will automatically be granted. Much of the work takes place beforehand ensuring that the documentation is accurate, identifying potential issues and preparing appropriate explanations.
If the Home Office is repeatedly requesting further evidence or your application is becoming more complex, seek professional advice early. It is far easier to address potential compliance issues at the application stage than to deal with them following a refusal or enforcement action.
