Master Sponsor Licence Rules in 2025

 What is a Master Sponsor Licence?

The term Master Sponsor Licence is often used informally to describe a UK employer’s licence to sponsor migrant workers through visa routes such as the Skilled Worker route. It does not represent a separate legal category in UK immigration law. Instead, it refers to the standard sponsor licence issued by the Home Office, which allows businesses to issue Certificates of Sponsorship (CoS) to foreign nationals so they can apply for or extend a work visa.

In 2025, the UK’s sponsor licence regime has undergone major updates. For employers and HR teams, understanding these changes is essential to maintain compliance and avoid penalties, downgrades or licence revocation.

Why Master Sponsor Licence Matters in 2025

The UK government has introduced stricter immigration measures in 2025, increasing scrutiny on sponsoring employers. Roles that were previously straightforward to sponsor are now subject to higher skill and salary requirements. Failing to follow the new rules can lead to a downgrade, suspension, or even complete revocation of a licence. The term Master Sponsor Licence is commonly used in business and legal discussions, so understanding the actual legal framework behind it helps organisations avoid misinterpretation and costly mistakes.

UK Sponsor Licence: The Legal Basis

The Home Office, through UK Visas & Immigration (UKVI), oversees the sponsorship system. Employers must apply for a sponsor licence following the official guidance for Workers and Temporary Workers. This guidance was updated on 22 July 2025 to reflect significant immigration rule changes. Once granted, a sponsor licence is normally valid for four years, as long as the organisation continues to meet all compliance requirements.

Types of Sponsor Licences

Sponsor licences can cover different categories.

Worker routes include options such as Skilled Worker, Intra-company Transfer, and Health & Care Worker.

Temporary Worker routes cover seasonal work, charity work, and creative industries.

Some organisations hold both worker and temporary worker licences, or they may add one type to an existing licence.

The 2025 fee structure distinguishes between small or charitable sponsors, who pay £574 for a worker licence, and medium or large sponsors, who pay £1,579. For licences combining both worker and temporary worker routes, the higher fee applies.

Key Changes Introduced in 2025

Increased Minimum Skill Level (RQF 6)

From 22 July 2025, the minimum skill level for most sponsored roles has been raised to RQF Level 6, equivalent to a bachelor’s degree. Roles below this level generally no longer qualify unless they are on designated lists or fall within specific exceptions. Some roles previously eligible at RQF 3 to 5 have lost eligibility. A transitional shortlist exists for certain roles, such as IT support or logistics managers. These roles can still be sponsored under old rules if their CoS is assigned by 31 December 2026. After that date, they must meet the new RQF 6 criteria or become ineligible.

New Salary Thresholds and Discounts

The general salary threshold is now £41,700 or the going rate for the occupation, whichever is higher. This applies to roles assigned CoS on or after 22 July 2025. Discounts are available in limited circumstances. New Entrants may be sponsored at 70 percent of the going rate for up to four years. PhD and STEM roles may qualify for 80 to 90 percent of the going rate, subject to set cash floors. Roles listed on the Immigration Salary List may also benefit from more flexible thresholds.

Ban on Sponsoring in Personal Capacity

Employers can no longer use sponsor licences for personal employment purposes, such as hiring domestic staff solely for private benefit. Sponsorship must relate to genuine business activity. Breaching this rule can result in refusal or revocation of the licence.

Stronger Compliance and Penalties

Enforcement has become far stricter. More licences are being revoked or downgraded due to breaches. Action plans may last longer, and cooling-off periods after revocation can be extended for serious or repeat violations. Employers must now fully absorb the cost of sponsorship; these costs cannot be passed on to the worker.

Eligibility Criteria for a Sponsor Licence

To qualify for a sponsor licence, an organisation must be a genuine business that is trading or preparing to trade. It must have robust HR and record-keeping systems, designated key personnel roles, financial solvency, and a clean immigration and criminal record. It must also agree not to use the licence in a personal capacity.

Application Process

Applying for a sponsor licence involves preparing evidence such as proof of trading address and corporate documents, completing an online application, and paying the relevant fee. Decisions usually take around eight weeks. Once approved, employers must maintain compliance throughout the licence’s validity. Those who already hold a licence can apply to add additional routes if required.

Sponsor Duties and Compliance Obligations

Once a sponsor licence is granted, the employer must actively monitor sponsored workers, report relevant changes, maintain accurate records, cooperate with Home Office audits, and use CoS appropriately. Costs associated with sponsorship cannot be passed to the employee. Failure to meet these obligations can result in licence downgrades or revocation.

Assigning Certificates of Sponsorship (CoS)

A CoS is a digital document issued to a prospective migrant, containing details such as job title, salary, and start date. The role must qualify under an eligible occupation code. CoS assigned after 22 July 2025 must comply with the updated skill and salary rules. For roles covered by the transitional shortlist, CoS must be assigned by 31 December 2026 to retain the old criteria.

New Entrant and PhD/STEM Discounts

The New Entrant Discount allows sponsors to offer 70 percent of the going rate, subject to cash floors, for up to four years. The PhD/STEM discount permits salaries at 80 to 90 percent of the going rate if the role meets specific criteria. Once the discount period ends, the full threshold must be met for visa extensions or settlement applications.

Transitional Safeguards and Grandfathering

Workers with CoS assigned before 22 July 2025 can continue under previous rules. Those in lower-skill roles may remain eligible for extensions or switches under old criteria. Transitional shortlist roles are given an extension period until 31 December 2026.

Revocation, Downgrade, Cooling-off and Action Plans

If a sponsor breaches their duties, the Home Office may downgrade their rating or impose an action plan. Serious breaches can result in immediate revocation. Following revocation, a cooling-off period applies before reapplication, and repeat offenders may face longer waits. During an action plan, sponsors may not assign new CoS.

Common Pitfalls to Avoid

Many employers fall into traps by relying on outdated skill or salary thresholds, sponsoring roles that no longer qualify, passing sponsorship costs to employees, sponsoring for personal use, failing to keep proper records, or neglecting to report changes. Assigning CoS without meeting the new requirements or ignoring compliance inspections can also lead to penalties.

Case Study: Application Under 2025 Rules

A mid-sized technology company intends to sponsor a software engineer in August 2025. The role qualifies at RQF Level 6. The company offers a salary of £45,000, but the going rate is £50,000. Since the new rules apply, the employer must raise the salary to £50,000 or apply a valid discount if the candidate qualifies. The company must also ensure it has appropriate HR systems to monitor and report changes.

Frequently Asked Questions

Does Master Sponsor Licence differ from a standard sponsor licence?
No. It is simply a colloquial term for the standard UK sponsor licence.

Can I sponsor a role below RQF 6 in 2025?
Generally no, unless it falls under a valid carve-out or is on the Immigration Salary List.

Can sponsorship costs be passed to the employee?
No. Sponsors must cover these costs themselves.

What happens if my licence is downgraded to B status?
You may temporarily lose the ability to assign new CoS until compliance issues are resolved.

What is the new salary threshold from July 2025?
The general threshold is £41,700 or the occupation’s going rate, whichever is higher.

How long does the New Entrant discount apply?
It can apply for up to four years, including previous time spent under Graduate or Tier 2 routes.

Conclusion and Action Steps

The 2025 reforms mark a new era of stricter sponsor licence rules in the UK. Employers should review job roles to ensure they meet the new skill and salary thresholds, avoid shifting costs to employees, and strengthen their HR and compliance systems. Meticulous record-keeping, monitoring and reporting are more important than ever. Businesses applying for a new licence must meet all updated criteria to secure and maintain their sponsorship status.