Changes to UK Company Size Thresholds

On 6 April 2025, the rules on defining small and large companies changed. This change in company law will affect your business's employment and overseas recruitment aspects.

Our UK Immigration Lawyers examine how changes in company law impact sponsor licence fees.

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For specialist immigration and sponsorship compliance legal advice, call Legal 500 featured OTS Solicitors on 0203 959 9123 or contact us online.

Changes to the definition of the size of a company

The Companies Act 2006 defines whether a business is classified as large or small. Your views or those of your accountant, bank, competitors or customers are irrelevant.

A recent change in company law is relevant to sponsor licence applicants and licence holders and their key personnel because some sponsor licence fees are based on the company's size.

Under the changes to Section 382(3) of the Companies Act 2006, a company is now defined as a small company if it falls within at least two of these three criteria:

1. Its annual turnover is not more than £15 million (up from 10.2 million).
2. Its balance sheet total is not more than £7.5 million (up from 5.1 million).
3. It has no more than 50 employees.

The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 introduced the changes.

The 2024 regulations affect companies and limited liability partnerships.

Assessing if your company is classed as small for sponsor licence fee purposes

Assessing whether your company is now classed as small for calculating sponsor licence fees is not always as simple as quickly looking at the turnover and balance sheet figures.

The detailed rules say:

1. If your company or limited liability partnership is part of a group, the parent company or LLP will need to meet the definition of ‘small company’ to qualify as small under the rule changes. Turnover and balance sheet figures are assessed globally rather than restricted to UK figures.
2. A company ceases to be considered small if it does not meet the statutory small company definition for two consecutive financial years.
3. Transitional provisions in the 2024 rules say that when a company’s size is considered by reference to a previous financial year, the amended thresholds are treated as applying in the earlier years.

Duty on sponsor licence holders to report a change in company size

Sponsor licence holders have a duty to report to the Home Office within 20 working days if their company size changes to a new category. Failure to comply with reporting and recording duties can result in Home Office action.

Impact on sponsoring employers of moving from small to large company size

A company with a sponsor licence that is defined as small under the rules pays a lower fee for:

1. Skilled Worker and Senior or Specialist Worker licence applications.
2. The immigration skills charge fees for sponsored workers on the Skilled Worker Visa and Specialist Worker routes.

Sponsor licence fees for small and large companies

The two fees changed by your company falling within the definition of small are the licence application fee and immigration skills charge

From 9 April 2025, the Home Office sponsor licence application fee is:

• £1,579 for large companies or
• £574 for small companies.

The immigration skills charge fees on the allocation of a certificate of sponsorship are:

• £1,000 for the first 12 months and £500 for each additional six months for large companies.
• £364 for the first 12 months and £182 for each additional six months for small companies.

Check if your company has changed size under sponsor licence rules.

It is estimated that several thousand companies will change size from medium/large to small under the new rules. If you can prove to the Home Office that your company now falls within the company law definition of a small company, your business benefits from a significant reduction in immigration skills charge fees. These fees can mount up if your business relies heavily on Skilled Worker Visa holders from overseas.

Contact OTS Solicitors for sponsorship legal advice

At OTS Solicitors, our specialist team of Immigration Lawyers provide expert sponsor licence advice on:

• Sponsor licence rule changes.
• Immigration Law Training tailored to your business needs.
• Sponsor Licence Management Services.
• Compliance troubleshooting.
• New licence applications.
• Sponsor licence suspensions and revocation.

To discuss how Immigration Lawyers in London can help ease the pressures of sponsor licence compliance and management and potentially help you reduce fees, contact Legal 500 featured OTS Solicitors on 0203 959 9123 or contact us online.

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