{"id":4396,"date":"2026-11-09T21:15:06","date_gmt":"2026-11-09T21:15:06","guid":{"rendered":"https:\/\/visavisuk.com\/?p=4396"},"modified":"2026-11-09T21:16:29","modified_gmt":"2026-11-09T21:16:29","slug":"sponsor-licence-revocation-court-of-appeal-rulings","status":"publish","type":"post","link":"https:\/\/visavisuk.com\/en\/blog-en\/sponsor-licence-revocation-court-of-appeal-rulings\/","title":{"rendered":"UK Sponsor Licence Revocation: The Court of Appeal on Salary Compliance and Close Relatives"},"content":{"rendered":"\n

Summary:<\/strong> In two judgments handed down a week apart, the Court of Appeal has drawn the limits of the Home Office’s revocation powers from two different directions. In Treal Care, the court held that salary compliance is measured by a rounded assessment rather than a month-by-month calculation; in TJ Trading Express, it held that assigning a Certificate of Sponsorship to a close relative is, on its own, sufficient to support revocation. This article considers both decisions and what they mean for sponsors.<\/p>\n\n\n\n

A sponsor licence is not simply a permission to employ overseas workers in the United Kingdom; it is a continuing set of duties subject to Home Office oversight. Revocation prevents the employer from sponsoring new workers and directly affects the permission of those already sponsored.<\/p>\n\n\n\n

A common assumption is that every revocation decision follows an opportunity to make representations, and that a minor shortfall will not of itself lead to revocation. The Court of Appeal’s decisions of October and November 2026 show that neither assumption holds in every case.<\/p>\n\n\n\n

When Can a Sponsor Licence Be Revoked?<\/h2>\n\n\n\n

The Home Office’s sponsor guidance (Workers and Temporary Workers: guidance for sponsors, Part 3, version 08\/26 of 28 August 2026) sets out the grounds for revocation in three annexes. Annex C1 lists the mandatory grounds, while Annexes C2 and C3 list discretionary grounds.<\/p>\n\n\n\n

Under the guidance, where a ground in Annex C1 applies the Home Office can revoke a licence immediately and without warning; otherwise the licence will normally be suspended first and the sponsor given 20 working days to respond in writing. There is no right of appeal against revocation, and a sponsor will generally be unable to reapply for at least 12 months.<\/p>\n\n\n\n

For this reason, revocation decisions usually reach the courts by way of judicial review, as both of the decisions below did. Judicial review falls outside the scope of IAA Level 1, and the decisions are summarised here for information only.<\/p>\n\n\n\n

Treal Care: Is Salary Compliance Measured Month by Month?<\/h2>\n\n\n\n

Treal Care (UK) Ltd supplied health and care staff and held an A-rated sponsor licence. In October 2024 the Home Office revoked the licence under Annex C1(aa), on the basis that three workers had been paid less than the annual salary stated on their Certificates of Sponsorship (CoS). The High Court quashed that decision in July 2025.<\/p>\n\n\n\n

On appeal, the Home Office argued that the guidance requires at least one-twelfth of the annual salary to be paid every month. In its judgment of 5 November 2026, the Court of Appeal rejected that reading, holding that the guidance does not say so and that it is not an inevitable consequence of the sponsorship scheme.<\/p>\n\n\n\n

The court held that, particularly for workers on irregular hours, salary compliance should be assessed over a period proportionate to the CoS and on the basis of all the available information, by way of a rounded assessment. Monthly figures are one part of the payment history as a whole; they are not decisive on their own.<\/p>\n\n\n\n

The court also emphasised that the Secretary of State retains a residual discretion even under the mandatory grounds, and that a sponsor should normally be given an opportunity to explain or remedy a shortfall. The appeal was dismissed and the quashing of the revocation stands.<\/p>\n\n\n\n

It does not follow that the salary duty has been relaxed. Sponsors must still pay the salary stated on the CoS and report changes, and a rounded assessment can only work on the basis of complete and consistent records.<\/p>\n\n\n\n

TJ Trading Express: Is Assigning a CoS to a Close Relative Enough on Its Own?<\/h2>\n\n\n\n

TJ Trading Express Ltd operated a petrol station and convenience store and was granted a sponsor licence in September 2022. In November 2023 its director, who was also the Level 1 user of the Sponsor Management System, assigned a CoS for a “Petrol Station Manager” role to his wife’s brother, without noting the relationship on the CoS.<\/p>\n\n\n\n

The Home Office revoked the licence in March 2024 on two grounds: Annex C1(o), where an SMS user assigns a CoS to themselves or to a close relative or partner, and Annex C1(z), where there are reasonable grounds to believe the role is not genuine. The guidance’s definition of a close relative includes a brother-in-law.<\/p>\n\n\n\n

In its judgment of 29 October 2026, the Court of Appeal allowed the Home Office’s appeal. The court held that C1(o) is a hard-edged rule that does not require dishonesty, and that where the breach is indisputable there is no automatic requirement to invite representations before revocation; ignorance of the guidance was not treated as meaningful mitigation.<\/p>\n\n\n\n

Notably, the Home Office’s “not a genuine role” reasoning was found to be inadequate. As C1(o) independently supported revocation, this did not change the outcome, and the court substituted a declaration that the decision was unlawful only insofar as it relied on C1(z).<\/p>\n\n\n\n

How Should the Two Decisions Be Read Together?<\/h2>\n\n\n\n

Although the decisions may appear to point in different directions, both rest on the same distinction: between a breach that calls for evaluation and one that is indisputable. Where a duty is measured over time and through records, such as salary compliance, the court expects a rounded assessment and an opportunity to explain; where a ground rests on a clear fact, such as the close relative rule, the Home Office is given more latitude.<\/p>\n\n\n\n

This distinction is particularly relevant to family-owned businesses and to entrepreneurs planning sponsorship through their own company. The employment of a relative of the owner or director should be considered in advance in light of the exception and reporting rules in the guidance.<\/p>\n\n\n\n

What Happens to Sponsored Workers if a Licence Is Revoked?<\/h2>\n\n\n\n

Under paragraph C10.10 of the guidance, where a licence is revoked, the permission of workers who were not involved in the breach will normally be cancelled so that 60 calendar days remain. Within that period the worker would need to find a new sponsor or apply on another route for which they qualify; where a worker was actively and knowingly involved, all remaining permission will normally be cancelled.<\/p>\n\n\n\n

Revocation can therefore affect not only the employer but also sponsored workers’ plans for settlement (ILR). A shortened period of permission and the search for a new sponsor should be considered separately in terms of the worker’s continuous residence in the United Kingdom.<\/p>\n\n\n\n

Common Mistakes in Sponsor Licence Compliance<\/h2>\n\n\n\n
    \n
  1. Not regularly comparing the CoS salary with actual pay:<\/strong> Treal Care calls for a rounded assessment, but that assessment depends on complete and consistent records.<\/li>\n\n\n\n
  2. Treating a family relationship as a minor detail:<\/strong> TJ Trading Express shows that assigning a CoS to a close relative can, on its own, support revocation.<\/li>\n\n\n\n
  3. Assuming representations will always be invited:<\/strong> Under the mandatory grounds in Annex C1, a licence can be revoked without prior warning.<\/li>\n\n\n\n
  4. Leaving SMS user roles and responsibilities unclear:<\/strong> C1(o) looks at the relationship between the worker and the SMS user who assigns the CoS.<\/li>\n\n\n\n
  5. Reading court decisions as changes to the guidance:<\/strong> Neither decision amends the sponsor guidance; both define the limits of Home Office practice.<\/li>\n<\/ol>\n\n\n\n

    Sponsor Compliance Is Best Considered Before a Breach Arises<\/h2>\n\n\n\n

    Read together, the two decisions suggest that protecting a sponsor licence depends less on challenging a decision once a breach has been identified than on understanding the duties correctly from the outset. The court expects an opportunity to explain where a matter calls for evaluation, but does not extend the same protection to breaches of clear rules.<\/p>\n\n\n\n

    The sponsor guidance is updated several times a year. We will revisit this article if these decisions are reflected in the guidance or in Home Office practice.<\/p>\n\n\n\n

    Would You Like Your Sponsor Licence Duties Reviewed?<\/h2>\n\n\n\n

    To review your company’s sponsor licence application or the duties attached to an existing licence, you are welcome to contact Visavis. For a final assessment, please speak to our adviser. Further information is available on our Sponsor Licence for Companies<\/a> and Self-Sponsorship<\/a> pages.<\/p>\n\n\n\n

    Email:<\/strong> team@visavisuk.com<\/a><\/p>\n\n\n\n

    London:<\/strong> +44 7936 910 888<\/p>\n\n\n\n

    Web:<\/strong> www.visavisuk.com<\/a><\/p>\n\n\n\n

    Sources:<\/strong><\/p>\n\n\n\n