From 3 September 2026, the Home Office began introducing important changes to the Sponsorship Management System (SMS), including mandatory multi-factor authentication for SMS users. The changes place renewed emphasis on secure SMS access and effective management of sponsor licence responsibilities.
These changes come against a wider backdrop of increased scrutiny of sponsor compliance and recent judicial review challenges concerning sponsor licence revocation. Recent decisions, including R (Southcroft Healthcare Lodge Limited) v Secretary of State for the Home Department [2026] EWHC 350 (Admin) and R (Blue Inn Ltd) v Secretary of State for the Home Department [2026] EWHC 1649 (Admin), demonstrate both the serious consequences of sponsor compliance failures and the importance of procedural fairness in Home Office decision-making.
This blog explains the recent SMS changes, the key compliance risks for sponsors, and what recent sponsor licence revocation cases mean for employers.
Multi-Factor Authentication for SMS Users
From 3 September 2026, the Home Office began introducing mandatory multi-factor authentication (MFA) for SMS users. Once MFA is activated, users will be required to provide additional verification when accessing the SMS, including a one-time passcode.
Sponsors should ensure that all SMS users:
– Have access to their own login credentials
– Understand the new MFA requirements
– Do not share passwords or one-time passcodes
– Maintain secure access to the SMS
Sharing SMS login credentials has long presented a compliance risk. The updated requirements make individual and secure access increasingly important.
Changes to SMS User Management
The Home Office is also changing the way sponsors manage users within the SMS, including the phasing out of Level 2 Users and new provisions relating to inactive SMS user accounts.
Sponsors should review existing Level 2 User arrangements and ensure that responsibility for SMS activity is allocated appropriately as the changes are implemented.
Sponsors should therefore regularly review:
– Who currently has access to the SMS
– Whether Level 1 Users remain eligible and active
– Whether former employees retain access
– Whether Key Personnel details remain accurate
– Whether appropriate arrangements exist for day-to-day sponsorship activity
A sponsor should not rely on a single individual without considering how SMS responsibilities will continue during absence, departure, or changes in personnel.
Inactive SMS Accounts and Sponsor Licence Risk
The updated sponsor guidance places greater emphasis on inactive SMS user accounts. Maintaining an operational Level 1 User is particularly important. Where a sponsor does not have an appropriate Level 1 User who is able to carry out day-to-day sponsorship activities and meet the relevant requirements, the sponsor licence may be at risk of revocation.
Sponsors should therefore treat SMS user management as an ongoing compliance responsibility rather than simply an administrative task.
Sponsor Licence Revocation
Sponsor licence revocation continues to be a significant compliance risk, with a number of recent judicial review cases considering Home Office revocation decisions.
In R (Southcroft Healthcare Lodge Limited) v Secretary of State for the Home Department [2026] EWHC 350 (Admin), the Court upheld the revocation of a sponsor licence.
The Home Office relied on several compliance failures, including:
– 97 Certificates of Sponsorship being assigned under an incorrect occupation code
– Sponsored workers being paid below the required salary
– A Level 1 User sharing their SMS password
– Inadequate systems for monitoring right to work
– Failure to provide requested documents
The case involved multiple compliance failures, including grounds which were sufficient in themselves to justify revocation. It also demonstrates how the security and proper use of the SMS can form part of the Home Office’s wider assessment of sponsor compliance.
Procedural Fairness in Revocation Decisions
Not every sponsor licence revocation will necessarily be lawful.
In R (Blue Inn Ltd) v Secretary of State for the Home Department [2026] EWHC 1649 (Admin), the Court found that the Home Office’s decision to revoke the sponsor licence was unlawful on procedural fairness grounds.
The case concerned allegations relating to labour supply, whether sponsored roles were genuine, and compliance with salary requirements. The Court identified procedural fairness failures in the Home Office’s approach and allowed the judicial review claim.
The decision is important because it demonstrates that, although the Home Office has significant powers to take compliance action, revocation decisions must still be reached through a lawful and procedurally fair process.
Common Sponsor Licence Revocation Risks
The recent changes and case law highlight a number of areas sponsors should monitor carefully:
– Incorrect occupation codes
– Salary underpayments
– Sharing SMS passwords or MFA passcodes
– Inadequate right-to-work systems
– Failure to respond to Home Office requests
– Sponsored roles that do not correspond with the role described on the Certificate of Sponsorship
– Inadequate oversight of SMS users and Key Personnel
Even administrative failures can become significant where they indicate wider weaknesses in sponsor compliance.
Steps Sponsors Should Take
Sponsors should review their compliance arrangements following the recent SMS changes.
This should include:
– Reviewing all current SMS users
– Preparing users for MFA requirements
– Ensuring passwords and passcodes are never shared
– Reviewing Level 1 and Level 2 User arrangements
– Checking sponsored workers’ roles, occupation codes, and salaries
– Maintaining accurate right-to-work and sponsorship records
– Ensuring Home Office requests are dealt with promptly
Regular internal compliance reviews can help identify issues before they result in Home Office enforcement action.
Final Considerations
The September 2026 SMS changes demonstrate the Home Office’s increasing focus on security, accountability, and effective management of sponsor licences.
Recent judicial review decisions also demonstrate the potentially serious consequences of compliance failures. While the Home Office can revoke a licence where mandatory or other revocation grounds apply, its decision-making remains subject to public law requirements, including procedural fairness.
Sponsors should ensure that SMS access, Key Personnel arrangements, sponsored roles, salary payments, and compliance systems are reviewed regularly rather than waiting for a Home Office compliance visit or enforcement action.
This blog is for general informational purposes and does not amount to regulated immigration advice. Any immigration advice is provided exclusively by an authorised adviser at NFTech Legal.