If your construction business has had a sponsor licence refused or revoked, prompt action is essential. The decision may affect your recruitment plans, sponsored workers, project delivery and future ability to sponsor overseas staff.
Construction businesses can face particular compliance challenges because they often operate through subcontractor chains, labour providers and multiple work sites. High staff turnover, changing project locations and payments made through the Construction Industry Scheme (CIS) can also make it more difficult to maintain clear records.
This guide explains what refusal and revocation mean, what you should do in the first 48 hours, and how to prepare your business for any future application.
Why construction employers face significant compliance risks
The Home Office expects sponsors to know who they employ, where sponsored workers are working, what duties they perform and whether they continue to have permission to work.
Construction businesses may be operating with:
- Direct employees on PAYE
- Labour-only subcontractors
- Self-employed individuals paid through CIS
- Agency workers
- Subcontractor companies and their employees
- Workers moving between projects and client sites
- Site managers responsible for recruitment and attendance records
This structure does not remove the employer’s compliance duties. It can make them more difficult to manage.
A main contractor may not directly employ every person on a site, but it still needs effective supply-chain controls. Contracts should require subcontractors and labour providers to carry out appropriate right to work checks, retain evidence and cooperate with audits.
The Home Office may also compare information provided by a sponsor with records held by other government departments, including HM Revenue and Customs. Inconsistencies involving payroll, CIS payments, salary levels, work locations or the number of workers engaged may lead to further questions.
For businesses in Leeds, Harrogate and across West Yorkshire, a well-organised compliance system is important even if the business has never received a Home Office visit.
Sponsor licence refusal and revocation: what is the difference?
Refused sponsor licence application
A refusal means that your business has applied for a sponsor licence but the Home Office has decided that you do not meet the eligibility or suitability requirements.
Common reasons include:
- Missing or inadequate supporting documents
- Failure to provide information by the deadline
- No credible evidence of a genuine UK trading presence
- Weak HR systems or no reliable compliance process
- Ineligible or unsuitable key personnel
- Concerns about the proposed roles or salary levels
- Previous non-compliance or civil penalties
- A lack of confidence that the business can meet sponsor duties
- The proposed use of sponsored workers as labour for another organisation
There is generally no right of appeal against a refusal. However, if you believe there has been a simple caseworking error, you may be able to submit an error correction request within 14 calendar days of the refusal decision. This is not a full appeal and normally cannot be used to introduce evidence that was not available when you applied.
A further application will usually be subject to a six-month cooling-off period, although the period can be longer where civil penalties, convictions or previous licence revocation are involved.
Revoked sponsor licence
Revocation is more serious. It means that an existing sponsor licence has been removed because the Home Office considers that the business is no longer suitable or has seriously breached its sponsor duties.
Revocation may follow:
- Serious or systematic HR failings
- Failure to report changes affecting sponsored workers
- Inadequate record keeping
- Employing a person without the relevant right to work
- Sponsoring a role that does not match the actual work performed
- Paying less than the salary stated on the Certificate of Sponsorship
- Sponsoring a non-genuine role
- Supplying sponsored workers as labour to another organisation
- Failure to cooperate with an announced or unannounced compliance visit
- Providing false or incomplete information
- Failure to comply with a B-rating action plan
- Recouping prohibited sponsorship costs from workers
- Loss of a genuine trading presence or required business registration
The Home Office may downgrade a licence or suspend it while investigating less serious concerns. However, serious failings can lead to revocation without a prior downgrade.
What happens immediately after revocation?
Once your sponsor licence is revoked:
- You cannot assign new Certificates of Sponsorship.
- Existing unused Certificates of Sponsorship become invalid.
- Your business is removed from the public register of sponsors.
- The Home Office will normally cancel or shorten the permission of sponsored workers.
- You cannot continue employing sponsored workers under the revoked sponsorship arrangement.
Sponsored workers who were not involved in the reasons for revocation will normally have their permission shortened to 60 calendar days, or to the earlier expiry date if they had less than 60 days remaining. They must either find a new sponsor and submit a valid application or leave the UK.
If a worker was knowingly involved in the reasons for revocation, their permission may be cancelled immediately. Workers who remain in the UK after their permission expires may face enforcement action.
You should not assume that the 60-day period allows you to keep the affected workers working for your company. In practice, you should obtain urgent advice about their status and stop assigning them work under the revoked licence. You should also consider employment law obligations, contractual notice and communication with the affected workers.
The cooling-off period before reapplying
Following a first revocation, the normal cooling-off period is at least 12 months from the date the Home Office notified you of the decision.
If the licence has been revoked more than once, the period is normally at least 24 months. Certain civil penalties and criminal matters may result in a longer period, and unpaid penalties can prevent a new application altogether.
When the cooling-off period ends, approval is not automatic. Your business must demonstrate that it has addressed the original problems. The Home Office may look closely at:
- Changes to directors, owners and key personnel
- New HR systems
- Right to work procedures
- Payroll and attendance records
- Reporting processes
- Site and work-location controls
- Training and internal audits
- The reasons for the previous refusal or revocation
A new application should therefore be treated as a compliance project, rather than simply a repeat submission.
Civil penalties for illegal working and the right to work defence
Employers can face a civil penalty of up to £60,000 for each illegal worker where the prescribed right to work checks were not carried out correctly.
In serious cases, knowingly employing an illegal worker can also result in criminal prosecution, imprisonment and an unlimited fine.
The main protection is a statutory excuse. You can establish this by completing the correct right to work check before employment starts and, where required, carrying out follow-up checks.
Depending on the individual’s status, this may involve:
- A manual check of original acceptable documents
- A Home Office online check using a share code
- A permitted digital verification service for eligible British or Irish passport holders
- An Employer Checking Service check and Positive Verification Notice in appropriate cases
You should retain the evidence securely for the duration of employment and for two years afterwards. The record should show the date of the check and the identity of the person who completed it.
For construction businesses, the process should cover employees, agency workers, labour-only subcontractors and other individuals engaged directly. You should also have contractual and audit controls for subcontractor companies.
Read the current Home Office employer’s right to work guidance and the guidance on penalties for employing illegal workers.
What documents should be kept in HR files?
For each sponsored worker, your HR file should normally contain:
- A copy of the passport or online right to work profile
- The date the check was completed
- The name or identity of the person who completed the check
- The worker’s signed employment contract
- The job description and occupation code
- Salary and working-hours information
- The Certificate of Sponsorship details
- Evidence of qualifications, registrations or professional memberships where relevant
- Current residential address and contact details
- Absence and attendance records
- Payslips and payroll records
- Evidence of salary payments
- Work-location and project records
- Records of right to work follow-up checks
- Copies of reports made through the Sponsorship Management System
- Records of recruitment and onboarding
- Relevant communications about changes to duties, salary or employment
The records should be accessible quickly if the Home Office requests them. Construction businesses should also retain information showing where a sponsored worker is normally working, particularly where assignments change between sites.
How to run a construction sponsor compliance audit
A practical audit should examine the whole employment and subcontractor structure.
1. Create a complete worker list
List every sponsored worker, employee, agency worker and directly engaged individual. Record the employing entity, contract type, project, site and payment method.
2. Check every right to work file
Confirm that the check was completed before work began, used the correct method and includes a clear date. Identify upcoming follow-up check dates.
3. Compare documents with reality
Check whether the actual role, salary, duties, hours and work location match the Certificate of Sponsorship and employment contract.
4. Review reporting deadlines
Sponsored worker changes generally need to be reported within 10 working days. Organisational changes normally need to be reported within 20 working days. Create responsibility charts so HR, payroll and site managers know who must report what.
5. Audit subcontractor controls
Check that contracts require right to work checks, record retention and cooperation with Home Office enquiries. Consider sample audits and written compliance confirmations.
6. Test your systems
Ask whether the business would know immediately if a sponsored worker stopped attending, changed sites, reduced their salary or left employment. If the answer is no, the system needs improvement.
The first 48 hours after refusal or revocation
If your application is refused
- Read the decision letter carefully and identify every reason given.
- Check whether the deadline for an error correction request is still open.
- Stop relying on the application to recruit or onboard sponsored workers.
- Preserve the submitted application and supporting documents.
- Review whether a cooling-off period applies.
- Obtain advice before making another application.
- Start correcting HR, right to work and record-keeping weaknesses.
If your licence is revoked
- Notify the directors, HR team, payroll team and site managers immediately.
- Stop assigning work to affected sponsored workers until their position has been properly reviewed.
- Make a list of every sponsored worker and check their current role, site and contact details.
- Explain to workers that the Home Office may contact them and that their permission may be shortened.
- Secure all HR, payroll, attendance, subcontractor and right to work records.
- Review the decision for possible factual errors and obtain urgent legal advice.
- Do not assign new Certificates of Sponsorship or rely on unused Certificates.
- Contact key clients and labour providers where project delivery may be affected.
- Begin a root-and-branch compliance audit.
- Record all steps taken, including dates, decisions and communications.
How ECA Lawyers can help
A sponsor licence refusal or revocation can affect your workforce and business operations well beyond immigration law. Our business immigration team can assist with reviewing the decision, assessing any error correction option, advising on sponsored workers and preparing a compliance recovery plan.
We can also help construction employers in Leeds, Harrogate and throughout West Yorkshire with sponsor licence applications, right to work procedures, HR file audits and supply-chain compliance.
Please contact ECA Lawyers on 0113 457 9835 or email info@ecalawyers.co.uk. We will be very happy to discuss your circumstances and explain the available options.
This article provides general information as at September 2026. Sponsor licence and right to work rules can change, and employers should obtain advice on their specific circumstances.
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