Certificate of Sponsorship (CoS): Complete Employer Requirements Guide

Executive Summary

A Certificate of Sponsorship (CoS) is your digital record that confirms you, as a UK employer, can sponsor a skilled worker for immigration purposes. Think of it as your official “voucher” that enables a potential employee to apply for a Skilled Worker visa.

What this means for you: You cannot hire international talent without first obtaining a sponsor licence and then issuing a CoS. The process involves strict compliance requirements, ongoing obligations, and significant financial investment—but done correctly, it opens access to global talent pools.

Real mistake we’ve seen: Employers rushing to hire without understanding the 6-8 week sponsor licence timeline, then losing qualified candidates to competitors who planned ahead.

The CoS system operates on two tiers: unrestricted CoS (for most skilled roles) and restricted CoS (for roles requiring annual allocation). Both require meticulous record-keeping, ongoing compliance monitoring, and adherence to Home Office reporting requirements.

Sponsor Licence Prerequisites: Your Foundation

Before you can issue any Certificate of Sponsorship, you must hold a valid sponsor licence. This isn’t a formality—it’s a rigorous assessment of your business’s ability to meet ongoing immigration compliance obligations.

The Application Process

Official pathway: Submit your sponsor licence application through the Home Office online system at gov.uk/uk-visa-sponsorship-employers. The current processing time is 8 weeks, though AVID experts have seen applications take up to 12 weeks during peak periods.

What really happens behind the scenes: Your application triggers a comprehensive review of your business operations, financial stability, and HR systems. The Home Office conducts desk-based assessments and may require site visits to verify your compliance infrastructure.

Key Requirements You Must Meet

Business legitimacy: Your organization must be operating lawfully in the UK with a legitimate need for skilled workers. Sole traders and partnerships face additional scrutiny—limited companies generally have smoother applications.

HR systems and processes: You need robust systems to track employee records, maintain contact with sponsored workers, and report changes to the Home Office. Generic HR software rarely meets these specialized requirements.

Key personnel designation: You must appoint specific individuals to manage your sponsor duties:

• Authorising Officer: Senior person with authority to make sponsorship decisions
• Key Contact: Day-to-day management of sponsored workers
• Level 1 User: Administrative access to the sponsorship system

What this means for you: These aren’t honorary titles. Each person requires specific training and carries personal liability for compliance failures.

Financial Investment

Initial costs breakdown:

• Small/charitable sponsors: £536
• Medium/large sponsors: £1,476
• Priority service (4-week processing): Additional £500

If you’re a startup or small business: The Home Office scrutinizes newer businesses more closely. Prepare detailed business plans, financial projections, and evidence of genuine trading activity.

Real mistake we’ve seen: Businesses appointing junior staff as key personnel, then facing compliance issues when these individuals lack authority to make necessary decisions quickly.

CoS Application Process: Restricted vs Unrestricted

Understanding the difference between restricted and unrestricted CoS is crucial for workforce planning and determines how quickly you can hire international talent.

Unrestricted CoS: The Standard Route

What it covers: Most skilled worker roles where you can demonstrate a genuine skills shortage or the role requires specific expertise not readily available in the UK job market.

Application timeline: Once you hold a sponsor licence, you can assign unrestricted CoS immediately through the sponsorship management system. No waiting periods or allocation restrictions apply.

Key requirements for assignment:

• Role must meet minimum salary thresholds (currently £38,700 or going rate for the occupation, whichever is higher)
• Position must be at RQF Level 3 or above
• You must have conducted genuine recruitment efforts (with specific exceptions)

What this means for you: You have immediate access to assign CoS for most skilled roles, but each assignment requires careful documentation to justify the need for international recruitment.

Restricted CoS: The Allocation System

When you need this: For roles that don’t meet unrestricted criteria or when recruiting from specific countries during certain periods. The Home Office releases restricted CoS in monthly allocations.

Application process: Submit requests during monthly allocation windows (typically first week of each month). Applications are prioritized based on:

• Salary offered (higher salaries receive priority)
• Occupation shortage status
• Previous compliance history
• Geographic location and local economic factors

Critical timing considerations: Restricted CoS applications compete nationally. Strong applications often succeed, but there’s no guarantee of allocation.

If you’re planning significant recruitment: Apply for restricted CoS allocation well in advance of your hiring timeline. AVID experts recommend building 3-month buffer periods into recruitment plans.

The Assignment Process

Step-by-step workflow:

1. Access the sponsorship management system
2. Select “Assign a Certificate of Sponsorship”
3. Complete worker details and job specifications
4. Provide salary and benefits breakdown
5. Upload supporting documentation
6. Generate the CoS number for your candidate

Real mistake we’ve seen: Rushing through CoS assignments without proper documentation, leading to visa refusals that could have been avoided with complete applications.

Employer Duties and Compliance: Your Ongoing Obligations

Obtaining a sponsor licence is just the beginning. Your real responsibilities start once you begin sponsoring workers. Non-compliance can result in licence revocation, significant fines, and reputational damage.

Continuous Monitoring Requirements

Contact maintenance: You must maintain contact with all sponsored workers throughout their employment. This means knowing their current address, employment status, and any changes to their circumstances.

What this means for you: Implement systems to track sponsored workers separately from your general workforce. Standard HR systems often lack the specific tracking capabilities required for immigration compliance.

Reporting obligations: You must report significant changes within 10 working days:

• Worker fails to start employment
• Changes to job role, salary, or working conditions
• Worker stops working (including suspension)
• Criminal convictions or civil penalties
• Changes to worker’s personal circumstances

Document retention: Maintain comprehensive records for all sponsored workers, including:

• Right to work documentation
• Employment contracts and job descriptions
• Salary payment records
• Annual leave records
• Performance management documentation

Record-Keeping Best Practices

Essential documentation systems:

• Digital copies of all sponsor licence documentation
• Individual files for each sponsored worker
• Audit trails for all system changes
• Regular backup procedures for electronic records

If you’re managing multiple locations: Each site requires separate compliance monitoring. You cannot delegate immigration responsibilities to local managers without proper training and oversight.

Real mistake we’ve seen: Businesses treating sponsored workers identically to domestic employees, then facing compliance failures during Home Office audits because they couldn’t demonstrate continuous monitoring.

Salary and Benefits Compliance

Minimum salary requirements: You must pay sponsored workers at least the minimum threshold for their occupation, with regular reviews to ensure continued compliance as thresholds change.

Benefits calculation: Accommodation, meals, and other benefits can contribute to salary calculations, but specific rules apply. Cash payments carry different weightings than benefits-in-kind.

What this means for you: Implement payroll systems that can demonstrate immigration compliance separately from general employment law requirements.

Workplace Compliance Monitoring

Physical presence requirements: Sponsored workers must primarily work at the location specified in their CoS. Remote working arrangements require specific Home Office approval.

Subcontracting restrictions: You cannot place sponsored workers with other businesses without explicit Home Office permission. This includes client sites, partner organizations, and subsidiary companies.

If you’re in consulting or project-based industries: Special rules apply for placing sponsored workers at client sites. Plan these arrangements well in advance and maintain detailed documentation.

CoS Allocation and Management: Strategic Workforce Planning

Managing your CoS allocation effectively requires understanding Home Office priorities and planning your recruitment strategy accordingly.

Annual Allocation Strategy

Unrestricted CoS planning: While technically unlimited, the Home Office monitors usage patterns. Consistent high-volume usage may trigger compliance reviews.

Restricted CoS allocation: The Home Office typically releases 20,000 restricted CoS annually, distributed monthly based on application strength and economic priorities.

Priority criteria for restricted allocations:

• Occupations on the Shortage Occupation List receive priority
• Higher salaries (above £159,600) get fast-track consideration
• PhD-level roles in STEM subjects receive preferential treatment
• Roles supporting government economic priorities

Usage Tracking and Optimization

CoS utilization monitoring: Track your assignment-to-visa success rates. High refusal rates may indicate application quality issues and could affect future allocations.

What this means for you: Maintain detailed records of why candidates succeed or fail at the visa stage. This data helps optimize future recruitment strategies.

Timing considerations: CoS assignments typically expire after 3 months. Plan your recruitment timeline to maximize usage efficiency.

Real mistake we’ve seen: Businesses assigning multiple CoS to the same candidate “just in case,” then facing questions from the Home Office about genuine recruitment needs.

Strategic Allocation Planning

Quarterly planning approach:

• Forecast recruitment needs 6 months in advance
• Identify roles requiring restricted vs unrestricted CoS
• Plan application timing around monthly allocation windows
• Build buffer periods for processing delays

If you’re in seasonal industries: Understand how seasonal employment patterns affect your allocation strategy. The Home Office recognizes legitimate seasonal needs but requires detailed justification.

Common Pitfalls and Solutions: Learning from Experience

Understanding where other employers have struggled helps you avoid costly mistakes that could jeopardize your sponsor licence.

Compliance Failures and Prevention

Most common failure: Inadequate record-keeping during rapid growth periods. As your sponsored workforce expands, manual tracking systems become unreliable.

Solution: Implement automated compliance tracking before you need it. AVID experts recommend treating immigration compliance as a separate function from general HR administration.

Communication breakdowns: Failing to maintain regular contact with sponsored workers, especially during probationary periods or performance management situations.

What this means for you: Establish formal check-in procedures with sponsored workers beyond your standard HR processes. These don’t need to be burdensome, but they must be documented.

Application Quality Issues

CoS assignment errors: Providing inaccurate salary information, incorrect job descriptions, or outdated company details in CoS assignments.

Prevention strategy: Implement approval workflows for CoS assignments, with senior review before submission. One error can result in visa refusal and affect future applications.

Real mistake we’ve seen: Businesses copying previous CoS assignments without updating salary thresholds, resulting in applications below minimum requirements.

Remedial Actions

When compliance issues arise: Act quickly to address problems and implement corrective measures. The Home Office considers your response to issues when assessing overall compliance.

Documentation requirements: Maintain detailed records of any compliance issues and remedial actions taken. This demonstrates good faith efforts to maintain standards.

Cost Analysis: Understanding Your Investment

Sponsoring international workers involves significant upfront and ongoing costs. Understanding these helps you budget effectively and make informed hiring decisions.

Initial Investment Breakdown

Sponsor licence costs:

• Small/charitable organizations: £536
• Medium/large organizations: £1,476
• Priority processing: Additional £500
• Licence renewal (after 4 years): Same fee structure

CoS assignment costs:

• Unrestricted CoS: £239 per assignment
• Restricted CoS: £239 per assignment
• No refunds for unused assignments

Ongoing Operational Costs

Compliance management: Budget for dedicated compliance resources or external specialist support. Many businesses underestimate the time required for proper compliance monitoring.

What this means for you: Factor compliance costs into your hiring budget. The true cost of international recruitment extends well beyond visa fees.

System and training investments: Implementing proper tracking systems and training key personnel represents a significant but necessary investment.