New Changes for Sponsor Licence Holders: Home Office Updates
September 4, 2026
The Home Office has published a series of updates that directly affect Sponsor Licence holders. The changes take effect in stages from 3 September 2026.
They cover a broad range of areas, from Sponsor Management System (SMS) access security and user roles to the monitoring of inactive accounts and the scope of the Right to Work scheme. Each change and the key dates for sponsors are set out below.
Effective date: 3 September 2026
From 3 September 2026, Multi-Factor Authentication (MFA) will become mandatory for users of the Sponsor Management System (SMS). This change will introduce an additional security verification step when accessing SMS.
For sponsors: Sponsors will need to ensure that users with access to SMS are able to access the system in accordance with the MFA requirements from 3 September 2026.
From 9 September 2026, sponsors will no longer be able to appoint new Level 2 Users.
Existing Level 2 Users will continue during the transition period; however, according to the guidance, the Level 2 User role will be completely removed after 8 March 2027.
Under the new guidance, SMS Users are required to log into their SMS accounts regularly and keep their personal and contact details up to date.
This is particularly important because the Home Office is also introducing a new process for inactive SMS User accounts.
Sponsors are required to ensure that they have active SMS Users on their Sponsor Licence.
The Home Office has specifically stated that sponsors should take the necessary steps to maintain active SMS Users and that failure to do so may put their Sponsor Licence at risk.
Therefore, it is no longer sufficient for sponsors simply to appoint SMS Users; they will also need to monitor whether those users continue to actively use their accounts.
An important exception is being introduced where a Sponsor Licence is revoked solely due to the new inactive SMS User account procedure.
Under normal circumstances, following the revocation of a Sponsor Licence, a specific cooling-off period may apply before a new Sponsor Licence application can be made.
The Home Office is encouraging sponsors who no longer use their Sponsor Licence or are no longer undertaking sponsorship activities to voluntarily surrender their licence.
Effective date: 1 October 2026
For relevant working relationships commencing on or after 1 October 2026, the Right to Work scheme will be expanded beyond traditional employment relationships.
Therefore, businesses may need to look beyond individuals who are directly employed as employees. In particular, businesses using contractors, subcontractors and other relevant working arrangements will need to take the new Right to Work requirements into consideration.
| Date | Change |
|---|---|
| 3 September 2026 | Multi-Factor Authentication (MFA) becomes mandatory for SMS Users. |
| 9 September 2026 | New Level 2 Users can no longer be appointed. |
| 1 October 2026 | The scope of the Right to Work scheme is expanded to cover relevant new working arrangements. |
| 8 March 2027 | Final day on which the Level 2 User role can be used. |
| 9 March 2027 | The Level 2 User role will be completely removed. |
In light of these updates, it is important for sponsors to review their SMS Users and access arrangements, prepare for the MFA changes coming into effect on 3 September, take into account that new Level 2 Users cannot be appointed from 9 September, and make plans for the transition away from existing Level 2 Users by March 2027.
In addition, SMS Users are required to access their accounts regularly and keep their information up to date. Failure by sponsors to monitor inactive SMS User accounts may now create a direct compliance risk in relation to their Sponsor Licence.
Finally, in light of the Right to Work changes coming into effect on 1 October 2026, businesses should review not only their direct employees but also other working arrangements that may fall within the expanded scope of the scheme.
IAA Immigration Advisor
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Lex Legal Limited is an international legal consultancy firm that located in the heart of London. Our areas of expertise and services include legal advice globally as well as immigration consultancy.
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Meridien House
42 Upper Berkeley Street
W1H 5PW
London, England
+44 7739 699 968
+44 20 3988 0575
contact@lexlegal.com
