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In recent guidance issued by the Home Office, new reforms are being introduced for sponsor licence holders.
While ‘guidance’ sounds optional or administrative, failing to comply with the new rules can lead to licences being suspended or revoked, even if this is a first-time breach of duties.
The principal changes outlined by the Home Office include mandatory multi-factor authentication, the phasing out of the Level 2 User role, email notifications to Authorising Officers and new procedures for removing inactive Sponsorship Management System (SMS) accounts.
Understanding these changes can help sponsor licence holders remain compliant, avoiding any sanctions issued by the Home Office.
As of 3 September 2026, the Home Office began the phased rollout of mandatory multi-factor authentication (MFA) for all SMS users, adding an extra layer of security.
These changes are expected to be implemented by November 2026, with any organisations granted a sponsor licence after 9 September requiring it immediately.
Each time a Level 1 User accesses their SMS account, a one-time password will be sent to a registered phone number.
Not only will Level 1 Users require a one-time password, but they will also need to confirm their date of birth when logging into an MFA account for the first time.
For Level 1 Users without a valid phone number, or for each Level 2 User, codes are delivered to a registered email address.
The main implication of this change is that sponsor licence holders must maintain accurate records for every user, otherwise users may be locked out of their account.
If a Level 1 User’s phone number is outdated, or their date of birth is entered incorrectly, they will be unable to log on and manage daily sponsorship duties.
From 9 September 2026, the Level 2 User is being phased out.
Sponsors are no longer able to appoint new Level 2 Users and existing personnel in this role must be either converted to a Level 1 User or deactivated, by 8 March 2027.
Some organisations will be hit harder than others by this change, particularly those who use agency staff, outsourced HR or external legal advisers.
Deactivating these accounts transfers the administrative responsibility to a smaller pool of Level 1 Users, leading to a significantly larger workload.
Temporary staff, supplied by an employment business who are not employed by the sponsor, cannot become Level 1 Users or be appointed to Key Personnel roles, which may warrant a complete restructure of licence management.
As UK Visas and Immigration sometimes require sponsors to report certain information within strict timelines, overwhelmed Level 1 Users may miss legal reporting deadlines.
As of 9 September, Authorising Officers will receive automated emails regarding key updates on their sponsor licence.
Emails may include changes to Level 1 User details, the addition of Level 1 Users and changes to an Authorising Officer’s email address.
Where an organisation has fewer than 1,000 Certificates of Sponsorship, the Authorising Officer will also be notified when one is assigned. Larger sponsors, on the other hand, will receive daily summaries later this year.
As Authorising Officers are responsible for every action on the SMS, the new alerts provide a clear view of what is happening.
Simultaneously, it also makes it harder for Authorising Officers to claim they were unaware of what was happening.
Sponsors should double check Authorising Officer’s email addresses are accurate and up to date, ensuring notices are read and responded to.
If an SMS account is not accessed for 12 months or more, it is now deemed to be inactive by the Home Office.
Where an account has been identified as being inactive, the Home Office will contact the Authorising Officer and Level 1 Users to log in and check or update their details.
However, it is important to understand that Level 2 Users won’t be contacted directly. The responsibility for identifying an inactive Level 2 account and encouraging a user to log in falls to the sponsor.
As there is a three-month timescale for logging back in, failure to take action will result in accounts being deactivated.
The multi-factor authentication is an added risk factor for inactivity, as incorrect details may mean the Home Office flags and deactivates an account that is inaccessible.
Issues can arise where a sponsor currently does not have an active Level 1 user, as the Home Office will now flag and remove old accounts.
Without a Level 1 user, a licence is suspended and the sponsor has 28 days to nominate an active and eligible replacement.
If this can’t be achieved in the timeframe provided, the licence is typically revoked.
While licence revocation for inactive accounts can be considered a strict sanction, there is one concession in this scenario.
The cooling off period, which would apply for licences revoked under different circumstances, does not apply and the sponsor can reapply immediately.
However, the application fee must be paid for again and an organisation will need to meet the sponsor requirements active at that time.
This lifeline offered by the Home Office is narrow, as any workers sponsored under the licence will still be impacted.
The 60-day curtailment deadline for sponsored workers, will still apply and they will usually see their visas curtailed to 60 days or until visa expiry, whichever is sooner, unless they find a new sponsor or switch route in that time.
Application delays may lead to employees having to leave the country to avoid becoming overstayers.
Our immigration specialists can help review your current SMS, flagging any potential compliance risks that may put you in breach of your sponsor duties.
In preparation for the removal of Level 2 Users, we can help transfer personnel to Level 1 status and ensure they meet the Home Office requirements.
If there is no Level 1 user and a sponsor licence is at risk of revocation, we can review account activity and advise on the appointment of a replacement, while meeting the 28-day deadline.
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