The 51% Increase in Audits: Is Your Sponsor Licence Ready for 2026?

Sponsor Licence 2026

According to recent Home Office data, compliance visits increased by 51% in 2025 compared to the previous year . Even more striking, sponsor licence revocations more than doubled—from 937 in the previous 12-month period to 1,948 between July 2024 and June 2025 . By the end of 2025, the Home Office had revoked approximately 3,000 licences—nearly ten times the number revoked in 2023 .

For HR directors and business owners, these figures represent a clear warning: the Home Office is enforcing compliance with unprecedented rigour, and administrative errors that might have gone unnoticed in previous years now carry existential consequences for your business.

At Hextons Law, we have prepared this comprehensive guide to help you understand the new enforcement landscape and take practical steps to protect your sponsor licence.

Why Are Audits and Revocations Increasing?

The sharp rise in enforcement action reflects a deliberate shift in Home Office strategy.

Several factors are driving this trend:

1. Data Sharing with HMRC

Perhaps the most significant development is the Home Office's increased access to HMRC data. From April 2026, the Home Office will begin systematically accessing payroll and earnings information to identify discrepancies . This means that if a sponsored worker's reported salary, hours worked, or tax records do not align with the conditions of their visa or sponsorship, UKVI will be alerted automatically .

The Home Office has committed to notifying sponsors where there is reason to believe the mandatory minimum salary is not being paid, but the new approach is decidedly zero-tolerance—revocation is increasingly the first response rather than suspension or an action plan .

2. AI and Enhanced Data Analytics

The Home Office is making greater use of AI tools and intelligence sharing across government departments . This technology allows enforcement teams to identify compliance breaches without necessarily conducting an on-site visit. Administrative errors that might previously have gone unnoticed—such as incorrect PAYE details, failure to report absences like maternity or paternity leave, or unreported changes to work locations—are now on the Home Office's radar .

3. The Government's Net Migration Agenda

The 2025 White Paper set out the government's aim to reduce net migration, and stricter enforcement of the sponsorship system is a key mechanism for achieving this . Additional resources have been allocated to sponsor compliance, and the Home Office is actively targeting sectors with historically higher rates of non-compliance, including adult social care, hospitality, retail, and construction .

The Consequences of Losing Your Licence

A sponsor licence revocation is often delivered without advance notice and carries severe consequences :

Consequence	Impact
Immediate removal from register	The business cannot assign any new Certificates of Sponsorship (CoS)
Visa curtailment	Sponsored workers' visas are curtailed to 60 days or their natural expiry date, whichever is sooner
Pending applications refused	Any outstanding visa applications reliant on sponsorship will be refused
12-month cooling-off period	The business cannot reapply for a sponsor licence for 12 months
No right of appeal	There is no formal right of appeal against revocation; only judicial review is available

For many businesses, the loss of sponsored staff creates immediate resourcing gaps that can be impossible to fill quickly. The reputational damage can also affect recruitment of non-sponsored staff and client confidence.

Expanded Illegal Working Rules: What's Changing in 2026

The Border Security, Asylum and Immigration Act 2025 introduces significant changes to the illegal working regime . While the commencement date has not yet been set, HR teams should prepare now.

Current Law

Currently, civil penalties for employing someone without the right to work apply only to employees under a contract of service. Fines are:

• £45,000 per illegal worker for a first breach

• £60,000 per illegal worker for a repeat breach

New Law (When Commenced)

The Act will expand the regime to cover individuals working under broader

arrangements, treating certain non-employees as if they were employees for compliance purposes . This includes:

1. Workers' contract arrangements – including casual or irregular working patterns

2. Individual subcontractors in labour supply chains – where a business contracts to carry out work and then subcontracts it

3. Platform workers – individuals providing services via online matching platforms (e.g., gig economy workers)

Who remains outside scope? Genuine self-employed contractors operating their own businesses remain excluded, but the distinction will become increasingly important .

2025 Penalty Data

Between July and September 2025 alone, 617 civil penalties were issued, covering 831 illegal workers, with a total penalty value of £34,265,000 . Enforcement raids increased by 77% and arrests by 83% .

Your Sponsor Licence Health Checklist

To protect your licence and your business, we recommend implementing the following compliance framework:

Record Keeping

Requirement	Best Practice
Right to work evidence	Retain share codes, e-visa checks, and data screenshots for each worker
Employment contracts	Maintain up-to-date contracts with job descriptions and salary details
Payroll records	Ensure payslips, absence records, and historic contracts are retained
Contact details	Keep accurate records of workers' addresses and contact information
Retention period	Keep records for the duration of employment and for two years after employment ends

Monthly review: Check sponsored worker details and visa expiry dates at least monthly .

Quarterly spot checks: Review at least five files for right to work evidence and compliance.

Annual audit: Conduct a full internal audit of all sponsor files.

Reporting Duties

Sponsors must report changes to the Home Office within 10 working days via the Sponsor Management System (SMS) .

Changes to report for sponsored workers:

• Unauthorised absences (10 or more consecutive days without permission)

• Changes in salary or working hours

• Changes to work location (including remote working arrangements)

• Termination of employment

• Maternity, paternity, or adoption leave (depending on duration)

• Any criminal conviction

Changes to report for your business:

• Change of address or contact details

• Change in key personnel (Authorising Officer, Key Contact, Level 1/Level 2 Users)

• Mergers, acquisitions, or changes in ownership

• Insolvency events

• Criminal or serious civil proceedings against the business or key personnel

Tip: Ensure director-level sign-off on all reported changes before submission .

Right to Work Checks

Critical: Right to work checks must be completed for all employees before employment begins—not just sponsored workers . Properly conducted checks provide a statutory excuse against civil penalties .

Three methods for conducting checks:

1. Online share code check – for individuals with digital immigration status

2. Manual document check – inspecting original physical documents in the presence of the individual

3. Employer Checking Service (ECS) – for cases where standard verification is not possible

Common mistakes to avoid:

• Accepting screenshots without verifying physical documents

• Failing to check all employees (focusing only on non-UK nationals)

• Not retaining records correctly

• Missing repeat checks for employees with time-limited permission

Preparing for a Compliance Visit

Compliance visits typically last 2-3 hours and may be announced or unannounced . The Home Office compliance officer will focus on five key areas :

1. Monitoring Immigration Status and Preventing Illegal Working

• Right to work check procedures

• Systems for tracking visa/passport expiry dates

• Records of all workers' permissions

2. Record Keeping

• Up-to-date hierarchy chart

• Employment contracts and job descriptions

• Salary, hours, and payslip records

3. Maintaining Worker Contact Details

• HR systems in place

• Historical data retention

• Process for recording changes

4. Recruitment Practices

• Job advertisements for sponsored roles

• CVs and interview notes for all candidates

• Justification for selecting sponsored candidates

5. Migrant Tracking and Monitoring

• Annual leave policies and recording

• Attendance monitoring systems

• Reporting procedures for absences

Tip: The Authorising Officer is typically the individual interviewed. They should be thoroughly prepared on all aspects of the business and its sponsorship duties .

New Sponsor Duties for 2026

Recent updates to the Sponsor Guidance (March 2026) introduce several new obligations :

1. Informing Workers of Their Rights

Sponsors now have a duty to inform sponsored employees about their employment rights in the UK, including:

• National Minimum Wage entitlement

• Working Time Regulations

• Pension auto-enrolment

• Statutory leave and pay

• Health and safety

• Equality Act duties

• How to raise a grievance

Evidence of this information being provided must be retained .

2. Eligible Role Test (Replacing Genuine Vacancy)

The previous genuine vacancy requirement has been replaced with an eligible role test. A role is eligible if:

• It exists (or is reasonably expected to exist) at the time the CoS is assigned

• The worker performs the specific duties and hours stated

• All route requirements (skill level, salary thresholds) are met

• The role is appropriate to the sponsor's business model, financial turnover, and scale

3. Role Matching Requirement

A new provision allows for mandatory revocation if:

• A permitted change to a worker's role is not reported within 10 working days, or

• The worker's actual role does not match the role stated on the CoS

Practical Steps to Protect Your Licence

Based on the current enforcement landscape, we recommend taking the following actions immediately:

Step	Action
1. Board-level accountability	Make sponsor licence compliance a board-level agenda item. Responsibility should not sit solely with HR .
2. Regular training	Ensure all staff involved in recruitment or management of sponsored workers receive regular training on sponsor duties .
3. Policy review	Update contracts, policies, and procedures to reflect March 2026 guidance changes .
4. Payroll alignment	Audit payroll records against sponsorship requirements before April 2026, when HMRC data sharing becomes fully operational .
5. Internal audit	Conduct a mock compliance audit to identify weaknesses before the Home Office does .
6. Contract review	For businesses using subcontractors or platform workers, review engagement models ahead of the expanded illegal working rules .

How Hextons Law Can Help

With enforcement activity at record levels and new duties coming into force, proactive compliance support is no longer optional.

At Hextons Law, we offer a comprehensive range of sponsor licence services tailored to your business needs:

• Mock compliance audits – We review your systems and identify gaps before the Home Office does

• Sponsor licence management – Ongoing support with reporting duties and record keeping

• Right to work training – Bespoke training for HR teams and key personnel

• Compliance visit preparation – Mock interviews and document preparation

• Revocation defence – Urgent judicial review claims where revocation decisions are flawed

Don't wait for a compliance visit to discover your vulnerabilities. Contact Hextons Law today to schedule a confidential review of your sponsor licence compliance.

Hextons Law LTD