(3 min read)
With effect from April 2026, the Home Office will have access to payroll data from HMRC. This will have a particular impact on immigration sponsors, as the Home Office will be able to use the data for compliance checks and to support enforcement action. This could include, for example, checking that the pay that sponsored workers receive is consistent with their certificate of sponsorship, and that immigration sponsors are complying with their reporting obligations. Keeping track of such changes can be challenging for sponsors, but with the potential for a failure to comply leading to the suspension or revocation of a sponsor licence, these changes make effective systems to ensure compliance even more critical.
What data will the Home Office have access to?
In April 2026, the Home Office will receive access to payroll data from HMRC for all immigration sponsors. It is anticipated that the data will be used to carry out online compliance checks against the Sponsorship Management System (SMS), which will highlight instances when immigration sponsors have not complied with their reporting duties or other sponsorship requirements. This could include, for example, updating the SMS for periods of unpaid leave and checking that pay for sponsored workers matches their certificate of sponsorship.
The context: increase in Home Office enforcement
Home Office enforcement activity has increased significantly in recent months, with the number of sponsor licence revocations increasing from 1100 in 2024 to 3000 in 2025. Enforcement activity is increasingly being carried out using electronic systems and processes to check for non-compliance and interact with sponsors, rather than site visits which are costly and time-consuming for the Home Office. These trends are expected to continue in 2026, and the data transfer from HMRC will support that enforcement activity.
The Home Office’s focus on enforcement, combined with the increase in available data for monitoring employers, means that employers need to be more vigilant than ever in ensuring compliance with their sponsorship duties including keeping the Sponsorship Management System up to date.
What might the Home Office be looking for?
It is expected that the Home Office will be checking for anything in the HMRC payroll data which suggests that an immigration sponsor is not meeting their duties. This could include:
- Paying a sponsored worker less than the salary on their certificate of sponsorship, both for each pay period and on an annual basis.
- Non-compliance with new rules in respect of pay periods, introduced in the recent Statement of Changes, which create obligations on sponsors in relation to regularity of pay for sponsored workers. This is a particular area of risk for sponsors of workers who work irregular hours. Sponsors must confirm the working pattern to the Home Office and ensure that the worker’s salary over any 17-week period must be at least equal to 17/52 of the annual salary on the certificate of sponsorship.
- Potential issues in respect of National Minimum Wage compliance.
- Not reporting via the SMS when a sponsored worker is absent without leave for more than 10 consecutive working days.
- Not reporting via the SMS when a sponsored worker is absent from work without pay, or on reduced pay, for more than 4 weeks in total in any calendar year.
- The immigration sponsor has stopped sponsoring or employing the sponsored worker.
What are the risks for employers?
In the first instance, it is likely that any discrepancy identified by the Home Office would lead to a request for further information and supporting documentation, and/or a more detailed compliance check. These requests and checks can be wide-ranging and onerous to respond to, and failure to respond adequately can lead to the suspension or revocation of the employer’s sponsor licence.
The Home Office could also choose to move straight to enforcement action, including suspension of a sponsor licence while investigation is carried out, or revocation of a sponsor licence. The impact of what may seem to be relatively minor non-compliance with reporting requirements can therefore be significant for an employer’s wider business.
What should employers do now?
It is now more important than ever for employers who hold sponsor licences to ensure that they have appropriate and effective systems in place to ensure compliance with their sponsor duties. It may also be worthwhile to carry out an audit of your SMS to ensure that the details for each employee are accurate and up to date. If any details need to be updated or reported on, those steps should be taken proactively to reduce the risk of Home Office enforcement action.
