Employment Law Digest February 2026 – Increased risk of sponsor licence revocation

The Home Office has recently informed us that in 2025, it revoked approximately 3,000 sponsor licences which was more than double the revocations in 2024 and nearly ten times as many revocations as 2023.  Further, instead of looking to suspend or downgrade an employer’s licence when there are potential compliance breaches, we are seeing the Home Office move straight to revocation.

Why are revocations increasing?

The sharp rise reflects the Home Office’s strict approach to clamping down on the misuse of the sponsorship system and the intention to meet the 2025 White Paper’s aim of reducing net migration.  Additional resource has been allocated to sponsor compliance but the main driver of the increase is the Home Office’s increased access to enhanced data.

The Home Office is making greater use of AI tools and intelligence sharing across government departments, particularly with HMRC, to identify occasions where sponsored workers may have been underpaid.  It has committed to notifying a sponsor and providing the opportunity to respond where there is reason to believe that the mandatory minimum salary is not being paid, or the salary being paid is less than stated on the Certificate of Sponsorship.  We are now seeing that the Home Office’s zero-tolerance approach is leading to revocations in the first instance where the sponsor is underpaying a Skilled Worker visa holder.

A stricter approach is also being taken to administrative errors, such as reporting incorrect PAYE details, failing to report absences such as maternity, paternity etc leave and not reporting changes in places of work.  These may previously have gone unnoticed but are now on the Home Office’s radar and are a breach of the sponsor duties.

This increased visibility across multiple platforms and the use of sophisticated AI tools will drive a continued rise of revocations during 2026 without a doubt.

What are the consequences of revocation?

Revocation of the sponsor licence often comes without advance notice and is incredibly disruptive to a business and its workforce.

The company’s name is removed from the licence of registered sponsors with immediate effect. This means that the business cannot assign any new Certificates of Sponsorship to extend the Skilled Worker visas of its current sponsored workers or recruit anyone new under sponsorship.

Existing applications with the Home Office that are reliant on sponsorship from the business will be placed on hold for a short period but ultimately are usually refused.  This can stop employees from extending their visas and from obtaining Indefinite Leave to Remain.

Further, the Home Office will curtail the visas of the business’ sponsored workers to 60 days or their natural visa expiry date if sooner.  As well as requiring the affected staff to either obtain new sponsorship with a new employer or leave the UK, this will create a resourcing issue for the organisation.

A cooling off period of 12 months from the date of revocation is also usually imposed, making it very difficult to obtain a new licence in the short-term.

How can you challenge a sponsor licence revocation?

Under current UK immigration rules there is no formal right of appeal against a Home Office decision to revoke a sponsor licence. This applies even where the revocation has serious consequences for the business and its sponsored workers.

However, depending on the circumstances, you may be able to challenge the decision via a claim for judicial review which is brought in the High Court. A claim for judicial review may arise if the Home Office has acted unlawfully, failed to follow correct procedure, or failed to act rationally.

It is important to note that:

1. Judicial review focusses on whether the decision making process was lawful, rather than whether or not the correct outcome was reached;
2. Claims for judicial review must be filed within 3 months of the revocation decision;
3. A claim for judicial review does not suspend the revocation, for which an urgent injunction would be necessary.

Prior to issuing a claim for judicial review the Court protocols require a potential claimant to send a letter before action to the Home Office setting out why you believe the decision making process was flawed, and the remedy required (i.e. reinstatement of the licence). The Home Office usually has to respond within 14 days which (if it is persuaded by the arguments raised) may decide to reinstate the licence without Court proceedings being necessary.

What can you be doing now to minimise the risk of losing your licence?

1. Make your sponsor licence, recruitment practices and compliance a board level agenda item – responsibility for the licence often sits within HR and Recruitment teams but the importance of complying with the Home Office’s strict rules needs to be a message communicated from the top down.
2. Provide training – everyone in the organisation who is involved in the recruitment or management of sponsored workers should have a sound understanding of the business’ duties as a registered sponsor.
3. Review and update contracts, policies and procedures – information can’t be reported to the Home Office by those in charge of the licence if they are not being kept up to date of changes. Managers and the sponsored workers themselves need to understand what changes they can and can’t make and the importance of reporting these.
4. Identify areas of weakness – the rules around supplementary employment, working overtime and the recruitment of international students are often areas where illegal working and compliance breaches arise and can be easily remedied.
5. Review your licence and practices – carry out an audit before the Home Office do. This will identify potential concerns and areas for improvement.

The information provided in this article is for general informational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for obtaining professional legal guidance. You should always seek independent legal advice tailored to your specific circumstances. Contact our specialist team here.