Tier 4 sponsor guidance: Home Office provides clarification on change of ownership and joint ventures

Posted: 14/11/2013

The Home Office has published new Tier 4 sponsor guidance, which took effect from 1 October 2013. The new guidance introduced several changes which we have previously written about, to read more please click here.

Since the new guidance was issued, the Penningtons Manches immigration team has been liaising with both our clients and the Home Office to seek further clarification on certain points which affect how our clients operate their business models.

We are now able to report back on the following matters:

Change of ownership

The new guidance states that, where an education provider undergoes a change of ownership, the new owner will need to apply for a new sponsor licence unless they already have one. Otherwise, the sponsor licence will be revoked.

We have sought clarification from the Home Office regarding its thinking behind the change and how it has affected some of our key clients. The Home Office has advised us that the current policy has been in existence since sponsorship started although, over time, it has gained more experience of dealing with companies who are restructuring or being sold. Therefore, in the current guidance, all the Home Office has done is added more information.

Through our conversations, the Home Office has advised us that it is not possible to cover every possible scenario in the guidance and that, ideally, sponsors should be seeking advice before such changes to ensure they understand what the possible outcomes would be in respect of their sponsor licence.

In terms of licensing, the Home Office is interested to know when the ownership of the licence holder changes as the control will also change. The Home Office does acknowledge that every case is different and there will be a need to step back and assess what is actually happening within an organisation before the policy can be applied correctly. In broad terms, if a sponsor, i.e. the licence holder comes under new ownership, a new licence will be required.

The Home Office went on to confirm that, where there are multiple layers of ownership, it draws the line wherever ownership/control of the licence holder changes. Ultimately, changes further up the chain of ownership/control may filter down to a licence holder but this would only be of concern to the Home Office if things changed for the worse in terms of their ability or willingness to comply with all of their sponsor duties.

Sponsors should ensure that they seek immediate advice on their licence/ownership structure.

Joint ventures

Joint ventures have been removed from the new guidance as a route to satisfy the branch requirements for Tier 4 purposes. Again, we have been liaising directly with the Home Office on behalf of clients who were directly affected by this.

We are now able to confirm the Home office's current position on joint ventures. We have been advised that the aim of the changes made on 1 October to the Tier 4 sponsor guidance in relation to branches and sites was to clarify their definition for Tier 4 purposes. The references to the ability to demonstrate common ownership or control by means of a joint venture agreement were removed inadvertently and it will reinstate them in the guidance in December. There will be no consequence for joint ventures that were already in place before the October guidance change in respect of compliance with Tier 4 sponsorship requirements.

The Home Office has further confirmed that it will be reviewing whether joint ventures are appropriate in the context of the provision of courses of study to international students through partnerships and will take the views of education providers in due course.

The Penningtons Manches immigration team continues to liaise with our contacts at the Home Office to ensure that education establishments can continue to operate under the current changes. If you have any queries and concerns in relation to complying with the guidance, please contact our immigration team.