The Government’s crackdown on illegal working gained momentum over the summer of 2025, with employers and advisers experiencing an increase in compliance requests and enforcement action from the Home Office.
We look at three key areas where we have seen an increase in enforcement activity and how employers can prepare themselves and mitigate risk. These areas are: civil penalty information requests and notices; requests for an allocation of Undefined Certificates of Sponsorship (UCoS); and changes in company ownership for sponsor licence holders.
Civil penalties
There is an ongoing surge in the Home Office’s illegal working enforcement activity, with an increase in arrests of 51% in the year to June 2025. Where the penalty for illegal working is a fine of up to £60,000 per illegal worker; possible reputational damage; and criminal sanctions in the most serious cases, there is a heavy price for employers to pay if they do not get their compliance systems right.
Whereas historically these fines were normally enforced only in high-risk sectors such as carwashes or takeaway restaurants, we have been seeing an increase in enforcement across all sectors, from charity and healthcare to finance and architecture.
The Home Office is increasingly sharing data with DWP and HMRC to issue civil penalties, for example if they see on PAYE records that a worker is exceeding the hours permitted on a Student visa, or that the person is working in a job which their visa does not allow.
There has been an increase in the Home Office requesting right to work check records from employers. Historically, these records would normally only be requested where intelligence of illegal working was received, for example through immigration checks at the border. Now they are being requested regularly as part of the sponsor application process or sponsored work visa process for example.
The right to work check guidance changes frequently and the requirements are complex. For these reasons it is extremely common that employers misunderstand or misapply the guidance, leaving themselves open to an inadvertent breach and to the risk of a significant civil penalty.
| Top tip Employers should check that their right to work check processes and records fully meet the requirements of the illegal working guidance to avoid any unpleasant surprises. We can provide bespoke Right to Work training to the relevant team. |
Requests for additional allocation of Undefined CoS for sponsored workers
Historically, the Home Office have only tended to request additional documents following a request for additional CoS where a job is considered high risk, such as for chefs, and this would be a request for recruitment records to show a genuine vacancy.
Now it is common for the Home Office to request documents normally required in a full compliance check, in response to a request for additional UCoS. For example, the Home Office are often now requesting from the employer justification of the need to recruit; a full staff hierarchy chart; business bank statements; signed and dated employment contracts for all sponsored workers within the same occupation code for which the UCoS is being requested; and evidence of client contracts or of the service provided, all of which must be provided within 5 working days.
| Top tip Employers should ensure that they keep adequate records of recruitment in line with Appendix D and have genuine business needs for UCoS requests. We can provide a mock audit of your systems tailored to your business, to minimise the disruption and risk of such a request to your sponsored workforce. |
Changes of ownership for sponsor licence holders
Many sponsors are not aware that if there is a majority change in direct ownership of the sponsoring organisation, this has to be reported to the Home Office within 20 working days and in many cases a new sponsor licence application will be needed. There may be other compliance implications, such as the need for new right to work checks to minimise the risk that the buyer will be open to civil penalties for previous instances of illegal working.
The Home Office have increased compliance enforcement in this area, with caseworkers routinely checking Companies House records to identify changes in ownership. This may be checked for example following a request for an allocation of CoS or an unrelated change of circumstances request. In many cases the change of ownership may have taken place several years prior, but a new licence may still be required. In such cases the Home Office will normally write to the sponsor, advising that they must submit a new sponsor licence application within 20 working days. In the current climate, it is possible that this could trigger a full compliance check.
| Top tip Sponsors who are unaware of the guidance in relation to changes of ownership should familiarise themselves with this and seek legal advice where necessary. They should identify whether any such change in ownership has taken place throughout the life of the sponsor licence to date and implement systems to ensure that the Authorising Officer and senior management will flag these duties before any such changes proceed. If you suspect that there has been a change in ownership structure please reach out to us. |
Please do get in touch with Chetal Patel if you wish to discuss any of the points in this article.
The material in this article is provided for guidance and general information only and is not intended to constitute legal or other professional advice upon which you should rely. In particular, the information should not be used as a substitute for a full and proper consultation with a suitably qualified professional. Please do contact the Bates Wells team if you require further information.