Can a UK Sponsor Licence Be Transferred During a Merger or Acquisition?

Do sponsored workers have to be assigned new Certificates of Sponsorship?

Not usually where workers transfer under TUPE or similar protection and their duties remain unchanged.

The Home Office guidance provides that a new CoS and visa application are not normally required where:

• the receiving sponsor holds a valid licence in the relevant route;

• it accepts full sponsorship responsibility; and

• the worker’s duties remain unchanged.

  
  

The receiving sponsor may not initially have an SMS record for each transferred worker. It must therefore follow the Home Office’s prescribed reporting process, which can include providing worker details through the relevant Worker and Temporary Worker reporting mailbox.

A new CoS or immigration application may be necessary if the worker’s job changes materially—for example, because the worker moves into a different occupation code.

What happens to the previous sponsor’s licence?

The outcome depends on what remains after the transaction.

Complete transfer

If all sponsored workers move to the buyer and the seller no longer needs its licence, the seller may need to surrender its licence. The Home Office may make the previous licence dormant to facilitate reporting in relation to the transferred workers. 

A dormant licence can provide the receiving sponsor with limited access to report activity relating to transferred workers.

Partial transfer

If only some workers move and the seller continues sponsoring others, the seller can normally retain its licence. It must continue reporting on the workers it still employs and may need to amend its CoS allocation.

Change in direct ownership

Where the sponsor itself has a new direct owner, the original licence will normally be revoked or made dormant. A new application will generally be required.

M&A sponsor licence action plan

Immigration due diligence should begin before completion—not after the corporate team has finalised the transaction.

1. Map every relevant legal entity

Identify:

• each employing entity;

• each licensed sponsor;

• every sponsor licence number;

• the immigration routes on each licence;

• the direct and ultimate owners before and after completion; and

• all branches and linked entities covered by each licence.

  
  

2. Identify all sponsored workers

Create a schedule showing:

• worker name;

• visa route;

• job title and occupation code;

• employing entity;

• work location;

• visa expiry date;

• current sponsor;

• proposed employer after completion; and

• whether their duties will change.

  
  

3. Confirm the transaction structure

Establish whether the transaction is a:

• share sale;

• asset purchase;

• statutory merger;

• business transfer;

• demerger;

• internal group restructuring; or

• partial carve-out.

  
  

Do not rely solely on the commercial description of the deal. The Home Office outcome depends on the legal ownership and employment arrangements.

4. Obtain employment advice on TUPE

TUPE does not apply to every acquisition or restructuring. Whether it applies is an employment-law question that should be confirmed separately.

Government guidance explains that TUPE can protect employees where a business or part of a business moves from one employer to another. The identity of the employer normally needs to change for a business transfer to fall within TUPE. See the government’s business transfers and TUPE guidance.

5. Prepare the sponsor licence application early

Where a new licence is likely to be required, prepare the application before completion where possible.

This may include:

• corporate and ownership documents;

• organisational charts;

• Companies House records;

• evidence of UK trading;

• HR systems and compliance procedures;

• details of key personnel;

• transaction documents; and

• information about the transferring workers.

  
  

An application cannot always be submitted before the relevant legal change occurs, but the supporting work can usually be completed in advance.

6. Protect access to the SMS

Confirm who will remain the Authorising Officer, Key Contact and Level 1 User following completion.

The business should avoid losing all effective SMS access during a change in management. Changes to key personnel may require separate reporting and approval.

7. Make all reports within 20 working days

The seller, buyer and licensed entities may each have separate reporting duties.

Do not assume that a report made by one organisation satisfies the obligations of every other sponsor involved.

Note: The 20-working-day period above relates to the merger, acquisition, takeover or transfer itself. Where an individual sponsored worker leaves employment and sponsorship ends outside the transfer arrangements, the usual sponsored-worker reporting requirements generally apply, including reporting the cessation of sponsorship within 10 working days 

8. Review post-completion employment changes

Check whether any sponsored worker will experience a change to:

• employer;

• job title;

• duties;

• occupation code;

• salary;

• work location;

• working hours; or

• reporting line.

  
  

A TUPE transfer does not remove the need to assess other reportable or immigration-relevant changes.

M&A immigration due-diligence checklist

Before completion:

• Identify every sponsor licence in the transaction.

• Map the pre- and post-completion ownership structure.

• Confirm whether direct ownership will change.

• Identify all sponsored workers.

• Confirm which legal entity employs each worker.

• Assess whether TUPE or similar protection applies.

• Check whether the buyer has the correct sponsor licence.

• Prepare any required new licence application.

• Review proposed key personnel.

• Prepare the supporting evidence and SMS reports.

• Add the 20-working-day deadline to the completion plan.

• Assign responsibility for post-completion reporting.

• Review whether any worker’s duties or occupation code will change.

  
  

Frequently asked questions

Can a sponsor licence number be transferred to a buyer?

No. A sponsor licence is granted to a particular organisation and cannot be transferred or sold. The buyer must use its own licence or apply for a new one where required.

Does a share sale affect a sponsor licence?

It can. If a share sale changes the sponsor’s direct owner by transferring the controlling number of shares, a new sponsor licence will normally be required—even if the company remains the same legal employer.

What if only the sponsor’s ultimate parent company changes?

A new licence may not be required if the sponsor’s direct owner remains unchanged. However, the complete ownership structure and any reportable organisational changes should be checked carefully.

What is the deadline for reporting a merger or acquisition?

Relevant changes must normally be reported through the SMS within 20 working days of the change taking place.

When must the buyer apply for a sponsor licence?

If sponsored workers move to a buyer that does not hold the relevant sponsor licence, the buyer must normally make a valid application within 20 working days of the workers moving to it.

Do workers transferring under TUPE need new visas?

Usually not, provided the receiving sponsor holds or successfully obtains the appropriate licence, accepts sponsorship responsibility and the workers’ duties remain unchanged.

Do transferred workers need new Certificates of Sponsorship?

Usually not in a qualifying TUPE or similar transfer. A new CoS may be required if there is a material change to the worker’s employment, such as a move into a different occupation code.

What happens if the 20-working-day deadline is missed?

The Home Office may downgrade or revoke the sponsor licence and may cancel affected workers’ permission. The organisation should obtain advice and take corrective action immediately rather than waiting for the Home Office to contact it.

Are sponsored workers always given 60 days if the licence is revoked?

No outcome should be presented as automatic. Government guidance states that a worker’s permission may be limited to 60 days—or the time remaining on their visa if shorter—in certain licence-loss situations. However, the exact action depends on the worker’s circumstances and the Home Office’s decision.

Final thoughts

Sponsor-licence issues can be overlooked in an M&A transaction because they do not always appear in the main corporate due-diligence checklist. By the time HR becomes involved, the 20-working-day clock may already be running.

The safest approach is to map the sponsor licences, ownership structure and sponsored workforce before completion. This allows the buyer and seller to establish who must report the transaction, whether a new licence is required and how sponsorship responsibility will continue without unnecessary disruption to the workforce.

If your organisation is planning a merger, acquisition, share sale or restructuring, WBBI can review the proposed structure and help you prepare the required sponsor-licence applications and Home Office notifications.