International employers in the UK will soon witness drastic alterations to the nation’s visa sponsorship landscape in 2025. It is important to understand these changes in order to ensure compliance and retain the ability to sponsor skilled workers. This sponsor licence guidance article provides an in-depth overview of sponsor licence response advice, featuring a summary of the changes, and the steps employers ought to be taking next to prepare.

New Salary Thresholds for Skilled Worker Visas

On 9 April 2025, the UK government will increase the salary threshold for many Skilled Worker visas. To be eligible to sponsor skilled workers, employers are now required to pay a minimum salary of £29,000. This increase is to ensure that roles, where people are sponsored, have the skills they need and protect the domestic labour market. Employers need to examine and adjust their salary structures to meet these new mandates, as needed. Depending on government skill shortage lists, some sectors (e.g., healthcare, education, etc.) will require different threshold requirements.

These changes will have a particularly high impact on small businesses and industries traditionally dependent on lower wage workers. So, for example, sectors like hospitality and care, which often are sponsorship employees abroad, may find meeting the new threshold difficult. These employers will have to look at options such as salary restructuring, internal upskilling or hiring the UK labour force to remain compliant.

Prohibition on Passing on Sponsorship Costs to Employees

Starting on 31 December 2024, employers cannot go ahead and transfer specified costs associated with sponsorship to their employees. These include the sponsor licence fee and the Certificate of Sponsorship fee, which must be paid by the employer. The policy will be consistent with current regulations that prohibit the Immigration Skills Charge from being transferred to workers. They need to plan their costs with these expenses in mind now that the new rules are in effect.

Moreover, companies that violate these rules could be subject to penalties such as fines or be asked not to apply for future sponsorships. Employers must have a clearly stated financial policy that not only protects the employer but also sets forth expectations for the staff regarding cost-sharing.

This will result in more competition for jobs, as fewer and fewer employers will be able to afford to sponsor foreign workers due to higher costs. Consequently, the conclusion is that companies will have to consider the net positives of sponsorship vs. other forms of talent acquisition, namely, training local talent based in the UK or raising salaries to appeal to local talent pools.

Improved Compliance and Monitoring Measures

UKVI are adopting a new and robust approach to compliance and monitoring to ensure that sponsors are meeting their obligations. This involves more frequent and unannounced compliance checks. One, employers should have accurate and up-to-date contact information, visa status and employment history of their sponsored employees. Falling foul of these requirements can lead to serious consequences, including sponsor licence revoked.

UKVI is also rolling out digital compliance tools that will enable live monitoring of their sponsored employees, ensuring that companies correctly monitor the employment status, salary payments and places of work of their sponsored employees. To be always audit-ready, employers must invest in automated compliance systems.

More and more companies are using HR software systems that seamlessly integrate and interact with the UKVI compliance system. These platforms are capable of automating record-keeping, issuing alerts for expiring visas and streamlining reporting obligations. Employers that do not update their compliance processes may face more risk of being fined or losing their sponsorship benefits.

Expanded Adjustments to Shortage Occupation List

The Shortage Occupation List (SOL) is likely to benefit from a review by the UK government as newly emerging needs in the labour market become apparent. As a result, some sectors could witness a widening of job categories that are eligible for employer sponsorship, but others may encounter stricter regulations or removal from the SOL entirely. Employers who should need to keep abreast of these developments and fashion their recruitment strategies accordingly.

The SOL has traditionally been pivotal in bridging labour shortages in sectors like healthcare, IT, and construction. However, companies that rely on roles that may not qualify under the new rules would need to adopt alternative hiring strategies. Companies should perform a risk analysis to see if any of the roles they are sponsoring could be impacted and prepare for possible disruptions.

Impact on Sponsoring Organisations

The changes will also have a significant impact on businesses that rely on international talent. Adjusting salary bands has implications for budget formation, and the ban on charging sponsorship costs to employees means that employers need to rethink their budgetary obligations. Moreover, the increased compliance requirements call for sound HR systems to mitigate compliance risk.

These sector industries would have to come up with tighter recruitment strategies or train local workers to avoid some of the consequences of tighter sponsorship laws. Small businesses, more so, need to evaluate whether they have the means to support compliance when the new regulations are in force. This is a big part of sponsor licence guidance.

For certain companies, the expense of supporting a sponsor licence may exceed the advantages of employing foreign talent. They would have to reimagine their workforce planning, explore apprenticeships or vocational training, and partner with local education systems to develop a sustainable pipeline of skilled talent.

Steps Employers Should Take:

Check Salary Structure – Ensure all sponsored roles meet the new minimum salary threshold of £29,000

Create a Budget Strategy— Adjust budgeting strategies – factor in increased sponsorship costs, as employers can no longer shift fees to employees.

Deliver More Overseas Compliance Checks – Improving how you record, report and implement right-to-work checks to comply with UKVI's tougher monitoring.

Budget for Compliance – Tell your employees that digital solutions for all record-keeping, employee monitoring, and reporting save money in the long run (and they do).

Seek Updates – Avoid falling foul of regulations or risk having your sponsor licence revoked.

Alternative Workforce Strategies - Invest in local training programs, apprenticeships, and employee development initiatives to depend less on international hires.

Engage with Legal Professionals – Most likely, for our first point, professional sponsor licence advice helps to advise you on being fully compliant with all Home Office regulations.

Get Legal Assistance

With changes to UK visa sponsorship revisited in 2025, it is incumbent upon employers to prepare accordingly to ensure they remain compliant. Adhering to the new salary thresholds, covering sponsorship expenses, and tightening compliance processes will be essential for maintaining a sponsor licence. Professional sponsor licence guidance to protect businesses from losing their ability to effectively recruit international talent. Employers who expect to have trouble complying with these changes should act preemptively now to seek legal counsel and rethink their hiring practices.

A Y & J Solicitors is a specialist immigration law firm with extensive experience in sponsor licence guidance. We have an in-depth understanding of immigration law and are professional and results-focused. For assistance with your visa application or any other UK immigration law concerns, please contact us at +44 20 7404 7933. We’re here to help!