Home Office Civil Penalties for Illegal Working After Akbars: Employer and Sponsor Licence Guide

Reviewed by: Paul Gulbenkian , Senior Consultant & Former Tribunal Judge

Last updated: August 4, 2026

Reviewed by: Oshin Shahiean , Managing Partner

Last updated: August 4, 2026

In Brief

The Supreme Court’s judgment in Akbars Restaurant (Middlesborough) Limited v Secretary of State for the Home Department [2026] UKSC 26 is important for any employer reviewing an illegal-working Civil Penalty Notice. The Court held that a notice must identify the particular limb of section 15(1) of the Immigration, Asylum and Nationality Act 2006 on which the Home Office relies. The notice in Akbars listed the statutory alternatives without identifying the applicable limb and was invalid.

Akbars does not automatically cancel every existing penalty. Employers must examine the complete notice and accompanying Statement of Case, protect the objection or appeal deadline, assess whether they have a statutory excuse and check the penalty calculation. A sponsor licence holder should also treat the incident as a wider sponsor licence audit and compliance matter. The civil-penalty response, employment decisions and sponsor-compliance work should be coordinated so that evidence and explanations remain accurate and consistent.

What Did the Supreme Court Decide in Akbars?

The Supreme Court judgment in Akbars was delivered on 27 July 2026. Immigration officers had inspected the appellant company’s restaurant on 15 January 2023 and identified a worker whose leave to remain had expired. An Information Request was sent on 9 February 2023, but no response was received. The Home Office issued a £15,000 Civil Penalty Notice on 13 March 2023.

The notice reproduced the alternative circumstances covered by section 15(1) and described the penalty reason as “no right to work”. It did not identify whether the Home Office alleged that the worker had never been granted leave, that their leave was invalid, that it had ceased to have effect or that a condition prevented the employment. The attached Statement of Case addressed employment and the absence of a statutory excuse, but it also failed to identify the particular section 15(1) limb.

That omission became especially significant as the proceedings developed. The Home Office referred at different stages to a condition preventing the employment and to the worker’s leave having expired. Those are distinct statutory grounds. The employer argued that it had not been told the case it was required to answer when the penalty was imposed.

The Supreme Court unanimously allowed the employer’s appeal. Section 15(6)(a) requires a penalty notice to state why the Secretary of State considers the employer liable. Reading that requirement within the statutory scheme, the Court held that the notice must explain which particular limb of section 15(1) is relied upon. Identifying the limb enables an employer to understand the allegation, decide whether to object or appeal and determine what evidence is needed.

A court appeal under section 17 is a rehearing of the decision the Home Office actually made. Relevant new evidence may be considered if it bears on that decision, including evidence concerning whether the individual worked for the employer. However, the Home Office cannot defend the appeal by substituting a different statutory limb that was not specified in the notice. The failure to identify the relied-upon limb rendered the notice in Akbars invalid.

What Akbars Did Not Decide

The central issue was the validity and required content of the Civil Penalty Notice. The Supreme Court did not decide that the employer had established a statutory excuse, that the underlying concern about the worker’s immigration position was unfounded or that every notice containing standard wording is invalid. It did not determine sponsor licence action, criminal liability or the appropriate penalty in other cases.

Nor did the Court prescribe a compulsory form of words for every notice. A notice must be read as a whole, but the complete document must still disclose the particular section 15(1) limb on which liability is based. An employer should not assume that one isolated phrase is decisive, or that later correspondence necessarily cures a failure to particularise the Home Office’s case when the notice was issued.

Does Akbars Make Your Civil Penalty Notice Invalid?

The starting point is to identify why the worker was allegedly disqualified from the employment. Section 15(1) covers circumstances in which the person had not been granted leave to enter or remain, their leave was invalid, their leave had ceased to have effect, or a condition attached to their leave prevented them from accepting the employment. The distinction may determine which immigration records, work restrictions and dates matter.

A possible Akbars defect may arise if the notice simply reproduces all statutory alternatives, states only that the worker had “no right to work”, or leaves the employer to discover the actual case through later correspondence. Review the Civil Penalty Notice, Statement of Case and any material expressly incorporated into them. Record precisely where the relevant statutory limb is said to be identified and whether the Home Office later changed its position.

Not every lack of detail will produce the same result. The decisive question is whether, read as a whole, the notice states why the Home Office considers the employer liable by identifying the section 15(1) limb relied upon. The objection should explain the legal and practical effect of the alleged defect rather than merely describing the wording as vague.

Even a strong validity argument does not justify ignoring a deadline. The Supreme Court observed that the Secretary of State can issue a new notice that complies with the statutory requirement. Cancellation of the existing notice may not prevent further lawful action. Employers should protect their procedural position while preserving evidence about the worker, the checks carried out and the organisation’s wider compliance systems.

Five Issues Employers Must Keep Separate

An illegal-working investigation can create several connected but legally distinct risks. Treating the matter as one undifferentiated problem may result in a technically focused objection while leaving the organisation exposed to sponsor, employment or regulatory action. The response should separate the following questions:

Notice validity: does the Civil Penalty Notice comply with section 15(6), including the specificity required by Akbars?
Substantive liability: was the individual employed under a contract of service or apprenticeship, and were they disqualified from that particular employment?
Statutory excuse: were the prescribed right-to-work checks completed correctly before employment and, where required, repeated in time?
Penalty calculation: did the Home Office apply the correct first or repeat-breach level and account for any established mitigating factors?
Wider enforcement: could the facts lead to sponsor licence action, criminal investigation, publication of the penalty or another regulatory consequence?

These questions can produce different answers. A notice may be invalid even though the employer’s right-to-work controls require urgent remediation. Conversely, a notice may comply with Akbars but remain open to objection because the organisation was not the employer, the individual had permission to perform the work, a statutory excuse was established or the penalty was calculated incorrectly.

The Civil Penalty Process and Key Deadlines

An investigation may begin with an announced or unannounced visit, a remote compliance check or information obtained through another Home Office process. If a possible breach is identified, the employer may receive a Civil Penalty Referral Notice and an Information Request. The Home Office then considers the evidence and may issue a No Action Notice, Warning Notice or Civil Penalty Notice.

The operative code describes three calculation stages: determining liability, deciding whether the matter is a first or repeat breach within the relevant three-year period, and calculating the penalty. This three-stage calculation should not be confused with the wider procedural sequence from investigation through to payment, objection, appeal and enforcement.

Dates in the employer’s own documents take priority over a general guide. Record the date and method of service, preserve the envelope and covering email, and calculate each deadline independently. Responsibility should be allocated to a named senior person so that evidence gathering, legal review and approval of the response do not drift between HR, payroll, directors and external advisers.

Stage or option	Timescale to check	Practical consequence
Information Request	The current code requests a response within 10 days	A complete and timely response may count as active cooperation. Supply contemporaneous evidence and keep a copy of everything submitted.
Faster payment option	Payment in full within 21 days	A 30% reduction is available only for a qualifying first penalty. It cannot be combined with instalments.
Objection	Use the deadline stated in the notice; the code provides for a written objection within the applicable 28-day period	Identify the permitted objection grounds, any Akbars validity issue and the supporting evidence. Do not rely on informal correspondence as a substitute.
Appeal following an objection	Normally within 28 days of the relevant date specified in the outcome or new notice	Proceedings must be started in the correct civil court. Continuing correspondence does not itself extend the statutory deadline.
Instalment request	An agreed period, usually up to 24 months	Explain why the penalty cannot be paid in one amount. The faster payment reduction is unavailable where instalments are used.

An in-time objection does not necessarily remove eligibility for faster payment. If a penalty remains payable following a timely objection, the employer normally has a further 21 days from the date specified in the Objection Outcome Notice to pay in full at the reduced rate. Nevertheless, the precise notice, applicable code, figures and dates must be checked before a payment or litigation decision is made.

How to Review a Notice After Akbars

Begin with the notice rather than an assumption about why the business was investigated. For each worker, map the Home Office’s allegation to the statutory wording and identify the documents said to support it. A disciplined review should cover:

whether the relevant section 15(1) limb is expressly identified;
what the notice, Statement of Case and incorporated material say about the alleged employment;
whether later correspondence introduces a different limb or materially changes the Home Office’s case;
whether the organisation was legally the employer of the individual;
the person’s immigration permission and work conditions on the relevant date;
whether any application, appeal or administrative review affected their continuing permission; and
whether the penalty was correctly classified as a first or repeat breach.

The chronology is often critical. It should record recruitment, the employment start date, each right-to-work check, the expiry or change of permission, follow-up reminders, communications with the worker, any Employer Checking Service request and the date of the alleged breach. Source documents should be retained alongside the chronology so that every important statement can be verified.

A properly prepared objection should connect any defect with the employer’s ability to understand and answer the case. It should also address every available substantive ground. An Akbars argument should remain distinct from evidence about employment status, immigration permission, prescribed checks, mitigation and calculation, even though those matters may all appear in the same response.

Establishing a Statutory Excuse

The Akbars validity issue does not replace the statutory-excuse analysis. An employer may avoid civil-penalty liability if it establishes that the prescribed right-to-work check was completed correctly before employment and, for a worker with time-limited permission, that any required follow-up check was completed before the existing statutory excuse expired. The applicable requirements depend on the law and code in force at the relevant time.

Depending on the individual’s nationality, status and the date of the check, the prescribed process may involve a Home Office online check, a compliant manual document check, an identity service provider using Identity Document Validation Technology for an eligible British or Irish citizen, or the Employer Checking Service. A Positive Verification Notice may be required where the right to work cannot be established through the normal online or documentary process.

The official Home Office code of practice on preventing illegal working states that the current code came into force on 13 February 2024. Earlier versions continue to matter where a relevant check or breach occurred before that date. Employers should not apply a current process retrospectively without first identifying the code that governed the check when it was required.

Evidence should include the complete online output or document copy, the date of the check, confirmation that the photograph and biographical details were compared with the person presenting for work, any work restrictions and the system used to schedule follow-up checks. Records supporting the statutory excuse should generally be retained securely throughout employment and for two years after the employment ends.

A check is not sufficient merely because a document or share code was collected. The employer must use the prescribed process, verify that the result relates to the individual and confirm that the person is permitted to perform the proposed work. Particular care is required with restricted hours, occupation limitations, students, sponsored roles and cases in which an application or appeal is pending.

Civil Penalties and Sponsor Licence Action Are Separate Tracks

For a licensed sponsor, objecting to a civil penalty is only one part of the response. Sponsor guidance requires appropriate right-to-work checks on sponsored workers and allows compliance officers to examine the wider workforce, records and systems. An illegal-working allegation may therefore prompt questions about recruitment controls, key-personnel oversight, reporting duties, record keeping and whether sponsored workers are performing permitted roles.

Sponsor action is governed by the sponsor guidance rather than by the civil-penalty objection process alone. Depending on the established facts and the guidance applying at the time, the Home Office may investigate, suspend, downgrade or revoke a licence. The result of an objection or appeal can be relevant, but a sponsor investigation may extend to wider evidence about the organisation’s controls and the response of its key personnel.

Businesses concerned about possible sponsor licence revocation should undertake a controlled audit of sponsored and non-sponsored personnel files. The audit should establish whether the problem is isolated or systemic, whether sponsored workers are performing the roles and hours permitted, and whether follow-up checks and reporting responsibilities are allocated effectively.

What a Dual-Track Response Should Cover

The civil-penalty workstream should address notice validity, the identity of the employer, the worker’s immigration position, statutory excuse, mitigation and calculation. The sponsor-compliance workstream should examine key-personnel supervision, reporting and record-keeping duties, sponsored role restrictions, recruitment controls, branch practices and senior oversight. Statements made across the two workstreams must be evidence-based and consistent.

If a record is missing, preserve what remains, document the systems and locations searched and explain any gap honestly. A new note may record the present investigation and remedial steps, but it must not be represented as a document created when the original check occurred. Backdating or disguising reconstructed material could substantially worsen the organisation’s position.

Remediation should be specific rather than cosmetic. Useful measures may include reallocating responsibility for checks, introducing documented escalation points, testing reminder systems, training branch managers and sampling other personnel files. The organisation should retain evidence of what was changed, when it was changed and how senior management will monitor the revised process.

Current Penalty Levels, Mitigation and Payment

For breaches to which the code in force from 13 February 2024 applies, the starting penalty is £45,000 per worker for a first breach within the relevant three-year period and £60,000 per worker for a repeat breach. The amount is calculated for each worker, so an investigation involving several individuals can create substantial aggregate exposure.

Calculation issue	First breach within three years	Repeat breach within three years
Starting penalty	£45,000 per worker	£60,000 per worker
Qualifying self-reporting	£5,000 reduction per worker	£5,000 reduction per worker
Active cooperation	£5,000 reduction per worker	£5,000 reduction per worker
Warning Notice	May be available where all specified first-breach mitigating requirements are established	Not available
30% faster payment reduction	Potentially available if the qualifying first penalty is paid in full within the applicable 21-day period	Not available

For a first breach, qualifying self-reporting and active cooperation can each reduce the penalty by £5,000 per worker. Where both factors are established and the employer also demonstrates effective right-to-work checking practices, the code provides for a Warning Notice rather than a financial penalty. A Warning Notice is unavailable for a repeat breach, although the specified monetary reductions may still apply.

Mitigation must be proved with evidence. A general assertion that the business cooperated is unlikely to be as persuasive as a record of timely responses, access provided to officers, documents supplied and responsible personnel made available. Similarly, effective checking practices should be demonstrated through procedures, training records, audit results, retained checks and evidence that identified weaknesses were addressed.

The faster payment option can reduce a qualifying first penalty by 30% if the amount is paid in full within the applicable 21-day period. Instalments may be requested, usually for up to 24 months, but cannot be combined with that reduction. Before choosing between payment, objection and appeal, the organisation should consider the merits, cash flow, sponsor consequences, publication risk and possible court costs.

Objecting to and Appealing a Civil Penalty

An employer may object on one or more permitted grounds: that it is not liable, that it has a statutory excuse or that the penalty is too high. A properly prepared objection can combine those statutory grounds with a challenge to the notice’s validity under Akbars. The Home Office may cancel, reduce or maintain the penalty. If it increases the amount, a new Civil Penalty Notice should be issued.

Following an unsuccessful objection, an appeal may be brought in the County Court in England, Wales and Northern Ireland or the Sheriff Court in Scotland. The appeal is a rehearing, and the court may consider relevant new evidence. Akbars confirms that this does not permit the Home Office to replace an unspecified or previously relied-upon section 15(1) limb with a different basic case on appeal.

Court proceedings may involve an issue fee, documentary and witness evidence, legal submissions and an adverse costs order if the appeal fails. An early merits assessment should examine both the legal grounds and the available evidence. Employers should not assume that continued discussions with the Home Office suspend or extend an appeal deadline unless a legally effective extension has been confirmed.

Common Mistakes After Receiving a Notice

The most damaging mistakes often arise when a notice is treated as a routine invoice or a response is submitted before relevant evidence has been secured. Employers should avoid:

paying immediately without assessing whether Akbars or another objection ground applies;
relying solely on a notice defect while ignoring weaknesses in right-to-work or sponsor systems;
missing a deadline because responsibility was divided between HR, payroll, directors and advisers;
altering, backdating or reconstructing records without identifying when and why they were created;
assuming immediate dismissal automatically resolves the civil-penalty or sponsor issue;
making inconsistent statements in civil-penalty, sponsor-compliance and employment processes; and
failing to investigate whether the same control weakness affects other workers, branches or group companies.

Employment action also requires care. A right-to-work concern does not remove the need to establish the facts, consider available immigration evidence and follow an appropriate employment process. The organisation should not knowingly permit unlawful working to continue, but a rushed decision based on incomplete information may create avoidable employment, discrimination and operational risks.

Practical Employer Checklist

A coordinated response should protect the immediate legal position and address future compliance. The following steps should normally be considered as soon as the relevant notice or Information Request is received:

Preserve the notice, Statement of Case, referral documents, Information Request, correspondence and proof of service.
Calculate every information, payment, objection and appeal deadline from the relevant document.
Identify the section 15(1) limb relied upon and record any ambiguity or later change in the Home Office’s position.
Prepare a chronology of recruitment, immigration permission, checks, follow-up checks and the alleged work.
Secure online check profiles, Employer Checking Service responses, Positive Verification Notices, document copies and audit logs.
Review employment status, work conditions, role restrictions, permitted hours and any pending immigration process.
Audit comparable personnel files and sponsored-worker records for the same weakness.
Appoint a senior person to coordinate civil-penalty, sponsor, employment and communications workstreams.
Document remedial training, revised controls and responsibility for future checks.
Obtain legal advice early where the notice is unclear, the deadline is close or the sponsor licence may be affected.

OTS Solicitors’ View

Akbars confirms that procedural fairness is an essential part of illegal-working enforcement. A substantial financial penalty should not be imposed through a notice that leaves an employer to guess which statutory case it must answer. Employers should examine the complete notice carefully instead of assuming that standard wording necessarily complies with section 15(6).

The judgment is not a compliance amnesty. A robust response combines a focused validity analysis with evidence about the worker’s position, prescribed checks, mitigation and the employer’s wider systems. For licensed sponsors, credible remediation and consistent evidence may be as important to business continuity as the objection to the financial penalty itself.

Timing matters because payment, objection and appeal choices can interact. The strongest strategy is usually formed before a deadline becomes urgent, when the organisation still has time to secure records, interview relevant personnel, test the Home Office’s case and decide whether wider workforce remediation is required.

Frequently Asked Questions

Does Akbars automatically cancel my Civil Penalty Notice?

No. Akbars establishes that the notice must identify the particular section 15(1) limb relied upon, but each notice must be read as a whole. Your notice may comply if the applicable limb is made clear in the notice and relevant accompanying material. You should preserve the objection or appeal deadline rather than treating the judgment as automatic cancellation.

What wording should a valid notice contain?

The Supreme Court did not prescribe a compulsory phrase or template. The notice must state why the Home Office considers the employer liable and identify the particular statutory limb concerning the worker’s immigration permission or work restriction. A bare statement that the worker had no right to work may be insufficient if it does not disclose the actual section 15(1) case.

Can the Home Office issue a new notice if the original is invalid?

Potentially, yes. The Supreme Court observed that the Secretary of State can issue a new notice that complies with the statutory requirement. Whether a replacement notice is lawful will depend on its wording and procedural circumstances. The original notice should still be challenged where appropriate, but cancellation may not bring the underlying investigation to a permanent end.

Should I use the 21-day faster payment option or object?

The answer depends on the merits of the objection, available statutory-excuse evidence, the calculation and any sponsor licence implications. A qualifying first-penalty payment can reduce the amount by 30%. An in-time objection can preserve eligibility under the operative code, so the options and their separate deadlines should be assessed together before a binding decision is made.

Can one civil penalty lead to sponsor licence revocation?

A civil penalty can lead to separate sponsor-compliance action, but revocation is not an automatic consequence in every case. The Home Office may investigate the penalty, the established facts and the organisation’s wider systems. A sponsor should protect its objection rights while separately demonstrating accurate records, effective oversight, lawful remediation and consistent right-to-work controls.

What if a right-to-work check was completed but the evidence is missing?

The employer is responsible for proving the statutory excuse, so missing records can be serious. Search email systems, recruitment platforms, personnel files and stored Home Office outputs for contemporaneous evidence. Do not backdate or disguise newly created records. Even if a statutory excuse cannot be proved, available evidence may still be relevant to liability, mitigation and sponsor remediation.

Is a civil penalty the same as the criminal offence of employing an illegal worker?

No. Civil liability under section 15 and criminal liability under section 21 are separate. The criminal offence concerns an employer who knew or had reasonable cause to believe that the worker was disqualified from the employment. A statutory excuse can protect against civil-penalty liability, but it does not permit an employer knowingly to continue employment that the worker is not allowed to undertake.

Contact OTS Solicitors

OTS Solicitors advises employers on illegal-working investigations, Civil Penalty Notices, right-to-work compliance and sponsor licence action. For advice on reviewing a notice after Akbars or protecting your sponsor licence, call 0203 959 9123 or contact OTS Solicitors.