Can The Home Office Revoke a Sponsor Licence Without Alleging Dishonesty?

Last reviewed: 3rd July 2026

The Home Office can revoke a sponsor licence on mandatory grounds, but doing so without putting a serious allegation of dishonesty to the sponsor first may render the decision unlawful. In Blue Inn Limited v Secretary of State for the Home Department [2026] EWHC 1649 (Admin), Tom Little KC sitting as a Deputy High Court Judge allowed all three grounds of judicial review, quashed the revocation decision of 15th April 2025, and ordered the Home Secretary to remake it lawfully. The case applies to sponsor licence holders across England and Wales.

Key Points

• The High Court quashed a decision to revoke Blue Inn Limited’s sponsor licence after finding the Home Office failed to put allegations of dishonesty to the company before acting on them.
• Where a revocation relies on Annex C1(z) of the sponsorship guidance and the facts in substance amount to an allegation of dishonesty or reprehensible conduct, the stricter procedural fairness requirements from Prestwick and Balajigari
• The Home Office’s failure to seek a labour agency agreement and further details about the Forgemasters project was procedurally unfair, even though sponsors must maintain records with assiduity.
• On the salary ground (Annex C1(aa)), the court held that the Home Office could not fairly reach its conclusion without making further enquiries, particularly where a third party had provided clarifying evidence that was then disregarded.
• Section 31(2A) of the Senior Courts Act 1981 did not apply: given the scale of procedural failings across all three grounds, it was not highly likely the decision would have been the same.

On 30th September 2024 and 1st October 2024, the Home Office compliance team conducted an unannounced visit to Blue Inn Limited, a construction industry labour and project company incorporated on 22nd July 2014. The company held a sponsor licence granted on 20th January 2022 permitting it to sponsor 32 skilled workers under the Immigration Act 1971.

During the visit, inspectors interviewed two sponsored civil engineers and a support service technician. One engineer, was assigned a Certificate of Sponsorship (CoS) for 45 hours a week at £35,000 per year. His timesheets showed repeated weeks of 50 to 55 hours. The technician, described duties at interview that the Home Office later said were inconsistent with the civil engineering role stated on his two successive CoS documents. The managing director of their client, a third party, told the Home Office that Blue Inn was a labour agency rather than a subcontractor. On 27th February 2025, the Home Office issued a 91-paragraph sponsor licence suspension letter setting out those concerns. Blue Inn responded in writing. On 15th April 2025, the Home Office revoked the licence.

What grounds did the Home Office rely on?

The Home Office revoked Blue Inn Limited’s sponsor licence on three mandatory grounds under Annex C1 of Part 3 of the Workers and Temporary Workers guidance: Annex C1(x) (supplying sponsored workers to a third party as labour), Annex C1(z) (reasonable grounds to believe a role was not genuine), and Annex C1(aa) (paying a sponsored worker less than the salary stated on the CoS). The decision letter stated that the C1(x) and C1(z) concerns remained unalleviated and that either ground alone was sufficient to revoke.

Annex C1(x) applies where the sponsor is acting as an employment agency or employment business and has supplied a sponsored worker to a third party as labour. Annex C1(z) covers cases where the Home Office has reasonable grounds to believe that a role for which a CoS was assigned is not genuine, including because the role does not exist, is a sham, or was created mainly to enable a worker to obtain leave. Annex C1(aa) applies where a sponsored worker is paid less than the salary stated on the CoS without notification or other permitted justification.

On the genuine vacancy ground, the Home Office concluded that the technician’s interview answers did not match the civil engineering duties on his CoS. On the salary ground, the Home Office was not satisfied that the engineer had consistently received the hourly rate of pay the CoS implied, given his timesheets showed weeks of up to 55 hours against a contracted 45 hours.

When must the Home Office allege dishonesty before revoking under Annex C1(z)?

Where the facts of a case mean that the only rational basis for the Annex C1(z) revocation conclusion is dishonesty or other reprehensible conduct by the sponsor, the Home Office must say so and give the sponsor a fair opportunity to respond before acting. That obligation flows from R (Balajigari) v Secretary of State for the Home Department [2019] 1 WLR 4647 and was applied to sponsor licence revocations in Rex (Prestwick Care Ltd) v Secretary of State for the Home Department [2025] EWCA Civ 184; [2025] 1 WLR 4761. Where the facts do not in substance amount to dishonesty, ordinary public law procedural fairness applies.

As Baker LJ held in Prestwick at paragraph 132:

“a discrepancy between the job description on a worker’s CoS and the role she is actually performing may justifiably give rise to a suspicion that the sponsor has deliberately (i.e. dishonestly) exaggerated her role in order to facilitate her stay in this country, but it does not by itself justify a conclusion to that effect.”

This principle requires the Home Office:

• to bear the burden of establishing dishonesty on the balance of probabilities;
• to indicate clearly to the sponsor that it has a suspicion of dishonesty so that the sponsor has a fair opportunity to respond;
• to consider all the circumstances before drawing the inference; and
• to set out its reasons for that inference in the revocation letter.

Sitting as Deputy High Court Judge, Tom Little KC in Blue Inn followed the analysis of HHJ Tindall in R (Prestige Social Care Services Ltd) v Secretary of State for the Home Department [2025] EWHC 2860 (Admin), which concluded that where a role simply lacks one of the three characteristics of a genuine vacancy in paragraph C1.44 of the guidance, revocation may follow without any dishonesty allegation. In this case, however, the Home Office had rejected letters from the Claimant’s clients, submitted on headed notepaper and capable of addressing the central concern. Rejecting those letters while declining to allege dishonesty left the revocation conclusion without a coherent rational basis. A decision-maker who disavows dishonesty in pre-action correspondence but fails to articulate any alternative coherent basis for the decision cannot cure that gap at the hearing.

What does procedural fairness require in sponsor licence investigations?

Procedural fairness in sponsor licence investigations is highly fact-sensitive: the Home Office is the primary fact-finder and bears a high degree of judgement in applying its own guidance, but that judgement does not extend to reaching a conclusion on incomplete material where the circumstances of a particular case required one further specific step.

“Once procedural fairness required her to make the additional enquiries then the specific other matters in relation to timesheets and the agreements, and which are relevant to this aspect of the claim, themselves became necessary. The reality is that these other issues largely arose as a result of the iterative process that occurred in this particular investigation. Once procedural fairness required specific necessary steps then there was also no good reason not to request the additional documentation.” Para 72

After the suspension letter, Blue Inn provided letters from third party clients that addressed a previous inconsistency and were capable of answering the Home Office’s concern. The Home Office was entitled to reject those letters, but only, the court held, after seeking the labour agency agreement and further detail about the ongoing projects. The Home Office sought neither. That failure was procedurally unfair on ground 1.

Tom Little KC was careful to confine the ruling to its facts. As he observed at paragraph 61:

“Inevitably in some cases the investigation may require something of an iterative process but it must also be one upon which the Defendant can impose finality relatively swiftly.”

In the majority of sponsor licence cases, the Home Office will be in a position following the sponsor’s written response to make a decision without further inquiry. The point in Blue Inn is narrow: where the sponsor provides third-party material capable of resolving the central factual dispute, and the only rational basis for rejecting that material would be dishonesty, fairness requires either a clear dishonesty allegation or one further request for specific documentation before a final decision is imposed.

On ground 2, the same analysis applied to the technician. His interview had not put to him any specific allegation of dishonesty or deliberate wrongdoing. He subsequently provided a letter dated 18th March 2025 confirming his duties matched his CoS. The Home Office discounted that letter without follow-up. As Tom Little KC held at paragraph 76:

“Either the letter was correct and there was a genuine role or there was no role and the letter was false or at best misleading.”

Discounting the letter while not alleging dishonesty was again the fatal analytical gap.

What is the legal test for the salary ground under Annex C1(aa)?

Annex C1(aa) of Part 3 of the sponsorship guidance requires the Home Office to have reasonable grounds to believe that the sponsor paid a worker less than the salary stated on the CoS, without notification or other permitted justification. In Treal Care v Secretary of State for the Home Department [2025] EWHC 1797 (Admin); [2025] 4 WLR 89, the High Court addressed the assessment of annual salary compliance. The court held that the CoS imposes an obligation to pay the required annual rate but neither the guidance nor the CoS requires that annualised rate to be met on each individual day, week, or month of employment.

In Blue Inn, the engineer’s CoS stated an annual salary of £35,000 for 45 hours a week. His timesheets showed repeated weeks of between 50 and 55 hours. Blue Inn provided three months of payslips and bank transaction records confirming the payments had been made. 4D Structures wrote on 7th March 2025 confirming that the engineer’s timesheets included a one-hour break, which would have reduced the actual working hours and undermined the Annex C1(aa) ground. The Home Office instead placed weight on a certification on the timesheets that it regarded as ambiguously inconsistent with 4D Structure’s statement.

Tom Little KC found ground 3 the most finely balanced. Taken in isolation, the failure to make a further inquiry on the overtime issue would not have been irrational. Ground 3 could not, however, be considered in isolation from grounds 1 and 2: those grounds had already required further inquiries to be made, and once those were necessary the salary ground could not fairly be disentangled from the wider procedural failure. As the judgment states at paragraph 83:

“The constellation of overall procedural unfairness vitiates the fairness of the approach taken to this aspect of the claim.”

The court then considered section 31(2A) of the Senior Courts Act 1981, under which relief must be refused if it appears highly likely that the outcome would not have been substantially different had the unlawful conduct not occurred. Applying the approach in R (Bradbury) v Brecon Beacons National Park Authority [2025] EWCA Civ 489; [2025] 4 WLR 58, which requires the court to focus on the statutory test rather than shorthand formulations from earlier cases, Tom Little KC held that multiple compounding procedural failings across all three grounds made it impossible to conclude the outcome would have been the same. The section 31(2A) argument failed accordingly.

Getting Legal Advice

If your sponsor licence has been suspended or revoked, or if you have received a compliance visit from the Home Office, our Immigration Law Solicitors can advise you on your options and your rights. Early, expert legal advice is essential in these types of matters.

Author – Sikandar Ali Jatoi

Sikandar Ali Jatoi is a Director and Solicitor-Advocate at Law Lane Solicitors, one of London’s leading full-service law firms with offices in Stratford, High Holborn, and Croydon. He is regulated by the Solicitors Regulation Authority (SRA number: 520945) and was admitted as a solicitor on 1 April 2011, bringing over 15 years of experience to his practice. Sikandar speaks fluent English, Urdu, and Sindhi.

Sikandar leads the firm’s litigation practice, with extensive expertise spanning civil and commercial disputes, contract claims, property litigation, professional negligence, clinical negligence, housing, corporate and commercial matters, and finance. As a qualified Solicitor-Advocate, he is authorised to represent clients at all levels of the civil courts in England and Wales, working alongside the firm’s in-house barrister to provide seamless, cost-effective advocacy from initial advice through to trial.

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