Geocare Services Limited, R (on the application of) v Secretary of State for Home Department

1. MRS JUSTICE LANG: The claimant seeks permission to apply for judicial review of the defendant's decision, dated 23 October 2025, to revoke its sponsor licence with immediate effect.

2. The claimant also seeks interim relief in the following terms which Mr Dingley clarified for me earlier this week: (1) The defendant shall forthwith substitute, in place of the decision dated 23 October 2025 revoking the claimant's sponsor licence, a decision suspending the claimant's sponsor licence. (2) The substituted suspension shall remain in force until the final determination of this claim or further order of the court; (3 The defendant shall take all necessary administrative steps to give effect to paragraph (1) above with immediate effect; (4) The substantive claim is to be listed on an expedited basis within four weeks.

3. The claim was filed and issued on 1 December 2025 with an application for urgent consideration. On 3 December 2025, Chamberlain J gave directions and listed an oral hearing to determine permission and interim relief on 11 December 2025 Facts

4. The claimant is a domiciliary care provider. It employs 81 staff, including 71 sponsored migrant workers, under the skilled worker route. They are mainly working as domiciliary carers under contracts with local authorities. The claimant has held a sponsor licence since 21 May 2021.

5. The defendant received information from HMRC to suggest that the claimant was paying some of its migrant workers less than the amount was stated on their certificate of sponsorship ("CoS").

6. On 23 October 2025, the defendant's sponsor licensing unit sent a letter (starting at page 56 in the hearing bundle) to the claimant which stated: “Removal from the Register of Licensed Sponsors: I am writing to inform you that we have revoked your sponsor licence with immediate effect, as we are satisfied on the balance of probabilities that you are failing to comply with your sponsor duties: General Sponsor Duties

1. You applied for a sponsor licence on 30/3/2021, and this was granted on 21/05/2021.

2. Our records show that you are currently sponsoring migrant staff.

3. Paragraph L3.11 of the Workers and Temporary Workers: guidance for sponsors part 1 states: We will continually monitor your ability and willingness to comply with your duties. We will make regular checks with HMRC to ensure you are paying your sponsored workers appropriate and we may also conduct a compliance check.

4. HMRC data shows that you have sponsored workers that are being paid less than what is stated on their Certificate of Sponsorship (CoS).

5. To verify this data, we emailed you on 10/09/2025 and 06/10/2025 to request the following information: -Contracts of employment for ALL of your sponsored staff. These should be signed and dated. -Corporate/business bank statement(s) for ALL business accounts used by your organisation covering the last 6 months. These must include the bank account in which you pay your employee’s salary into, must include the logo, statement date, the holder’s name/address, sort code, account number and balances. -If you are paying your sponsored workers via an external payroll system, where wages appear in bulk payments. Please provide a monthly breakdown of each sponsored workers salary payment, covering the last 6 months. -Payslips for ALL of your sponsored workers for the last 6 months. -National insurance numbers for ALL of your sponsored workers. -Full Pay Run Report/Payroll Summary or Real Time Information (RTI), confirming Gross & Net pay and NI & Tax deductions for ALL your sponsored workers in the last 6 months. -If you are using a prepaid card such as FOREX, evidence that you have made payments onto each of the sponsored workers’ cards for the last 6 months. -If you are paying a sponsored worker by cheque, evidence that this has been paid into the worker’s own bank account for the last 6 months.

6. You responded on 13/10/2025 and 14/10/2025 with the following: • List of staff members and NI numbers • Staff availability rota for 09/2025 • April 2025 payment structure and transportation cost deduction • Car rental invoices • Transportation deduction • Bank statements for the following periods: 01/03/2025 to 01/04/2025, 02/05/2025 to 30/05/2025,31/05/2025 to 01/07/2025, 02/07/2025 to 01/08/2025, 02/08/2025 to 01/09/2025, 02/09/2025 to 01/10/2025 • Payslips for March, April, May, June, August, September 2025 • Shell invoices • Payroll activities for period April-September 2025 • Contracts of employment

7. Our records show that you are sponsoring the following migrants, and their Certificates of Sponsorship show the following salaries: Pamilerin Sunday Babatope , £22000 per annum, based on 39h per week (equivalent to £1833 per month) Sophia Benjamin Allison , £20962 per annum, based on 37.5h per week (equivalent to £1747 per month)

8. According to the payslip information that you have provided, Pamilerin Sunday Babatope was paid the following amount for the months of March, April, May, June, August and September 2025: March – £1,275.56 April – £1,037.25 May – £1,504.88 June – £894.38 August – £1,276.93 September – £1,077.53

9. Moreover, Sophia Benjamin Allison was paid the following amount for the months of March, April, August and September 2025: March – £1,570.14 April – £1,715.50 August – £1,098.90 September – £1,559.83

10. It is clear from the payslip information listed above, that the migrant workers have been paid a reduced salary than as specified on their CoS.”

7. For ease, I refer to the two workers as "A" (Ms Allison) and "B" (Mr Babatope). In the case of B, he received pay which was 36 per cent less than the CoS figure and, in the case of A, she received pay that was 15 per cent less than the CoS figure.

8. The letter continued as follows: “11. Paragraph L3.12 of the Workers and Temporary Workers: guidance for sponsors part 1 states: If you fail to comply with your duties, or become no longer eligible or suitable to hold a sponsor licence, we may take action against you, including: • downgrading your licence rating – see Sponsor ratings for further information • reducing the number of CoS you can assign (or setting your limit to zero) • suspending your licence while we investigate further • revoking your licence • in serious cases, reporting you to the police or other relevant authorities.

12. We note that you stated the following in your response to our compliance check: “We have been having a lot of dialogs with certain staff members due to their early disruption of shift, and this has been going on for a considerable number of times, these set of individuals will call the office line and send messages stating that they can only work Tuesdays and Thursday, as we can’t force them to work it is against their human right, when we say it is contractual agreement set. When they care called to work, they will refuse to pick up their phone or and accept the care calls on their Rota app. We have already informed staff that we will be updating the Home Office of this trend. Starting reporting these changes immediately.” “We had several meetings with staff who are not driving on how to go about this constant lateness to work there by raising numerous safeguarding issues for Geocare Services Limited with Staffordshire County Council and the only solution was to get vehicle from Enterprise. With regards to deduction, it was an agreement for transportation, because staff only pay 5% -6% while Geocare pay the remaining 94% of the cost which is about £5158.00 per month. There are also staff who took out loans from Geocare Services Limited, sometimes is even more for the company.”

13. We refer you to paragraph S4.30 of the Workers and Temporary Workers: guidance for sponsors part 2, which states: S4.30. You must stop sponsoring the worker if their revised salary no longer meets any salary, hourly or going rate requirement for the job or the route on which they are being sponsored, or the change is otherwise not permitted by the Immigration Rules or sponsor guidance. You must tell us you have stopped sponsoring the worker via your SMS account (or Sponsor UK account if you are a PB1 sponsor).

14. The exceptions for paragraph S4.30 are listed under paragraph S4.31: S4.31. You do not have to stop sponsoring a worker if you reduce their salary and any of the following exceptions apply (although you must tell us via your SMS account or Sponsor UK account that you have reduced the worker’s salary): • the reduction coincides with a temporary reduction in the worker’s hours, or a phased return to work, for individual health reasons, provided: • this is supported by an occupational health assessment; and • the reduction does not result in the hourly rate falling below any hourly rate requirement which applied when the person obtained their most recent grant of permission

15. We acknowledge the reasons you have provided for the reduced hours and salary deductions however these reasons do not meet the requirements of S4.31.

16. In view of the above, as confirmed by HMRC checks and by the information by yourself, you have failed to comply with your sponsor duties.

17. As per Annex C1.aa of the sponsor guidance where it states such circumstances where we will revoke your licence: You pay a sponsored worker less than you said you would on the worker’s CoS, and; • you have not notified us of the change in salary; • or the reduction is not otherwise permitted by the Immigration Rules or the Workers and Temporary Workers: guidance for sponsors. Decision

18. Sponsorship is a privilege not a right. The sponsorship system reflects that those who benefit directly from migration (employers, education providers or other organisations who bring in overseas nationals) should play their part in ensuring the immigration system is not abused. Significant trust is placed in sponsors, and they must ensure they comply with immigration law and wider UK law, and not behave in a manner that is not conducive to the wider public good.

19. Migrants on a Skilled Worker visa have no recourse to public funds and are consequently reliant on their salary, as determined by the immigration rules. It is therefore crucial that a sponsor ensures the welfare of the workers they choose to sponsor by paying the agreed salary.

20. We always take into consideration the potential impact revocation may have on a sponsor and consideration is always given to re-rating a sponsor licence to allow a sponsor to demonstrate full compliance with their sponsor duties if appropriate. We have considered the possibility of downgrading your licence and issuing you with an action plan. However, as already stated, you have acted in contravention of Annex C1 aa) of the Workers and Temporary Workers: guidance for sponsors part 3. Downgrading your licence is not appropriate due to the seriousness of your non-compliance with your sponsor duties.

21. Annex C2 of the Workers and Temporary Workers: guidance for sponsors part 3 states: We may downgrade or suspend your licence first while we consider the matter, but we reserve the right to revoke your licence immediately without downgrading or suspending it . For further information, see sections C8, C9 and C10 of this document.

22. As a result, your sponsor licence has been revoked . There is no right of appeal against this decision .

23. Please note that from the date of this letter you are no longer licensed to continue to sponsor employees or issue further CoS . Paragraphs C10.10 to C10.15 of the Workers and Temporary Workers: guidance for sponsors part 3 provide information relating to your existing sponsored employee(s).

24. Whilst you can no longer recruit sponsored workers under the Work routes of the Points Based System, you can continue to recruit UK nationals, as well as EEA and non-EEA nationals that have the right to work in the UK. The revocation of the licence does not stop a business from trading. ….

26. As per C10.16 of the sponsor guidance: Once your licence has been revoked, you cannot make a further application for a sponsor licence until at least 12 months have passed since the date we notified you of the revocation. This is known as a ‘cooling-off’ period and may be longer than 12 months in some circumstances (for example, where the revocation was due to certain civil penalties or criminal convictions). If you do make an application before the cooling-off period has passed, it will be refused. The only exception to this is if your licence was revoked in error. If this happens, we will contact you to arrange for it to be reinstated.”

9. The claimant sent a pre-action letter supported by a witness statement from Mr Yahere, the owner of the business, dated 8 November 2025. This stated that the underpayments to A and B were a consequence of them electing to work fewer hours than those stated on the CoS, for reasons relating to family emergencies and childcare, in the case of B, and A's mental health. It also referred to deductions made for agreed transport costs and loans.

10. In the pre-action letter, the claimant admitted that it did not formally report the changes filed on its sponsorship management system (SMS) due to an honest oversight. They were unaware of the precise requirements under paragraph S4.30 of the guidance.

11. On 24 November 2025, the defendant sent her pre-action response maintaining her decision . Legal framework Permission and interim relief

12. The court will refuse permission to apply for judicial review unless it is satisfied that there is an arguable ground for judicial review which has a realistic prospect of success.

13. Principles governing the grant of interim relief proceedings are those contained in American Cyanamid Company v, Ethicon Limited (1975) AC 396 , modified as appropriate to public law cases. First, the claimant must demonstrate there is a serious question to be tried in public law claims. This involves considering whether there is a real, not a fanciful, prospect of a claim succeeding at the substantive hearing (see R (Medical Justice) v Secretary of State for the Home Department [2010] EWHC 1425 (Admin) per Cranston J at [6] and the Administrative Court Judicial Review Guide 2025. If a mandatory order is sought, a strong prima facie case needs to be shown.

14. Secondly, the court should consider whether the balance of convenience lies in favour or granting or refusing the interlocutory relief that is sought. This involves balancing the harm to the claimant that would be caused if interim relief is not granted and the claim later succeeds against the harm that would be caused to the defendant, any third party and the public interest if interim relief is granted and the claim subsequently fails. Case law on the sponsorship scheme

15. The purpose of the tier 2 sponsorship scheme and its legislative basis were summarised by the Court of Appeal in R (Prestwick Care Limited) and R (Supporting Care Limited) v Secretary of State for the Home Department [2025] EWCA Civ 184 , as follows: "4. Under the Immigration Rules, made under powers vested in the SSHD by s.3(2) of the Immigration Act 1971 , foreign nationals may enter the United Kingdom as workers if sponsored by an employer. The SSHD is responsible for awarding licences to employers who may then grant certificates of sponsorship to workers as permitted by the licence. The scheme provides a way of addressing skill shortages in the labour market and a fast track for entry into the country for those individuals who are sponsored. It plays an important role in the national economy – we were told that there are currently over 115,000 sponsors in the UK including just under 9,000 in the social care sector alone. The scheme is heavily dependent on trust and there is plainly the potential for abuse. The SSHD has to ensure and enforce compliance with the scheme as part of her overall management of immigration.

5. The provisions governing the sponsorship scheme are set out in non-statutory guidance, the legal basis for which was described by Lord Sumption in R (New London College) v SSHD , [2013] UKSC 51 at paragraph 28-29 in these terms: [2013] 1 WLR 2358 "28. …. the statutory power of the Secretary of State to administer the system of immigration control must necessarily extend to a range of ancillary and incidental administrative powers not expressly spelt out in the Act , including the vetting of sponsors.

29. The Immigration Act does not prescribe the method of immigration control to be adopted. It leaves the Secretary of State to do that, subject to her laying before Parliament any rules that she prescribes as to the practice to be followed for regulating entry into and stay in the United Kingdom. Different methods of immigration control may call for more or less elaborate administrative infrastructure. It cannot have been Parliament's intention that the Secretary of State should be limited to those methods of immigration control which required no other administrative measures apart from the regulation of entry into or stay in the United Kingdom. If the Secretary of State is entitled (as she plainly is) to prescribe and lay before Parliament rules for the grant of leave to enter or remain in the United Kingdom which depend upon the migrant having a suitable sponsor, then she must also be entitled to take administrative measures for identifying sponsors who are and remain suitable, even if these measures do not themselves fall within section 3(2) of the Act '."

16. The applicable legal principles governing the system of sponsorship and its review by the court have been established in a series of cases which were endorsed by the Court of Appeal in Prestwick at [21]-[24] as follows: "(1) The essence of the system is that the Secretary of State imposes 'a high degree of trust' in sponsors granted … licences in implementing and policing immigration policy … (2) The authority to assign a (CoS …)is a privilege which carries great responsibility: the sponsor is expected to carry out its responsibilities 'with all the rigour and vigilance of the immigration control authorities'. … (3) The Sponsor 'must maintain its own records assiduously'. ... (4) The emphasis is on 'certainty in place of discretion, on detail rather than broad guidance' … (5) The grant of the CoS by a sponsor is a very significant step… (6) The SSHD does not need to wait until there has been breach of immigration control caused by the acts or omission of a sponsor before suspending or revoking the sponsorship, but it can, and … should, take such steps if [she] has reasonable grounds for suspecting that a breach of immigration control might occur …. (7) The primary judgment about the appropriate response to breaches by licence holders is that of the Secretary of State for the Home Department. The role of the Court is simply supervisory. The Secretary of State for the Home Department is entitled to maintain 'a fairly high index of suspicion' and a 'light trigger' in deciding when and with what level of firmness she should act …. (8) The courts should respect the experience and expertise of the Secretary of State for the Home Department when reaching conclusions as to a sponsor's compliance with the Guidance, which is vitally necessary to ensure that there is effective immigration control …. (9) The Secretary of State for the Home Department has stringent powers to suspend or revoke a sponsor's licence if she becomes concerned that a sponsor is not complying with its obligations … (10) There is a clear need in some circumstances for the Secretary of State for the Home Department to invoke their powers where there is a risk that the sponsor might not be complying with its duties provided of course that the Secretary of State for the Home Department complies with its public law duties…. (11) The expertise and experience of the Secretary of State for the Home Department in being able to detect the possibility that a sponsor might not be or be at risk of not complying with its duties is something that the court must and does respect because, unlike the Secretary of State for the Home Department, courts do not have this critically important experience or expertise…. (12) An entity which holds a sponsor licence has substantial duties to ensure that the rules relating to immigration control are adhered to strictly and properly, such that if the Secretary of State for the Home Department were concerned that a sponsor is not complying with those duties, it would entitle, if not oblige the Home Office to prevent that sponsor from either granting more CoSs or revoking its licence …."

17. At [29], the court in Prestwick cited with approval the following dictum of Lord Sumption in New London College : "…there are substantial advantages for sponsors in participating… but they are not obliged to do so. The rules contained in the … guidance for determining whether applicants are suitable to be sponsoring institutions, are in reality conditions of participation, and sponsors seeking the advantages of a licence cannot complain if they are required to adhere to them."

18. In Prestwick , the Court of Appeal held that the Secretary of State for the Home Department was not under a duty to carry out an assessment of the impact of revocation on the sponsor, its employees, service users and the wider community, sometimes referred to as a "global assessment" (see [1]- [2]; [101]- [105]). While the Secretary of State for the Home Department has a residual discretion to consider the impact of revocation, this was a "factor to which the decision maker may have regard if in his judgment and discretion, he thinks it right to do so” (at [102]). Where the Secretary of State for the Home Department did not avert to this consideration at all, then it was not unlawful “unless the consideration is obviously material' according to the Wednesbury irrationality test". Where it is taken into account but given no weight, it is not open to the court to interfere, save where a decision maker has acted irrationally (at [102]). Guidance

19. The guidance in force when the decision was made was version 07/25.

20. Part 1 sets out the guiding principles of the scheme. Paragraphs L3.11 and L3.12 provide: “[L3.11] We will continually monitor your ability and willingness to comply with your duties. We will make regular checks with HMRC to ensure you are paying your sponsored workers appropriately… [L3.12] If you fail to comply with your duties, or become no longer eligible or suitable to hold a sponsor licence, we may take action against you, including:  downgrading your licence rating – see Sponsor ratings for further information  reducing the number of CoS you can assign (or setting your limit to zero)  suspending your licence while we investigate further  revoking your licence  in serious cases, reporting you to the police or other relevant authorities.”

21. The sponsorship requirements include in paragraph SK1.10: “If you wish to sponsor a Skilled Worker, you must: ….. Only sponsor workers in genuine employment which meet the skill level and salary requirements of this route.”

22. Section SK5 provides detailed guidance on the salary requirements for skilled workers. This includes the following: “[SK5.1] You must ensure any worker you sponsor on the Skilled Worker route is paid in line with the salary rates set out in the Immigration Rules and in this guidance. The relevant Immigration Rules are contained in paragraphs SW 4.2 to SW 4.4 and SW 14.1 to SW 14.5 of Appendix Skilled Worker. The going rates, where applicable, are set out in Tables 1 to 5 of Appendix Skilled Occupations. [SK5.2] These rates have been set to make sure the resident labour market is not undercut. They are reviewed and updated regularly to reflect the latest available salary data. … [SK5.5] In addition to compliance visits, we will undertake regular checks with HMRC to ensure you are paying at least the salary you stated on the sponsored worker’s Certificate of Sponsorship (CoS), in any sponsor note you have added to the CoS, or in any other notification of a change in salary.”

23. SK5.7 provides that (other than in circumstances that do not apply here), the salary a sponsor must pay a sponsored worker “must meet or exceed both of the following: the applicable general salary threshold and the applicable going rate for the occupation”.

24. The point is reiterated in SK5.8: “If the going rate for the occupation is higher than the general salary threshold, you must pay the worker at least the going rate. If the going rate is lower than the general salary threshold, you must pay the worker at least the general salary threshold.”

25. The general salary threshold is a figure set by the Guidance, which depends on the occupation of the sponsored worker. It is calculated based on actual gross earnings, up to a maximum of 48 hours per week. The going rate, which is also occupation-specific, is calculated on a pro-rata basis based on the number of hours the worker will actually work: see SK5.10 to SK5.14.

26. Paragraph SK11.19 provides that a CoS must confirm, among other things, details of the worker’s salary. Further requirements are contained at S4.14 of Part 2 of the Guidance, which provides that the CoS must contain: “The gross salary figure, which must represent the total amount paid to the worker, gross of any tax paid.” S4.16 provides that the gross salary period can (in most cases) be stated per hour, day, week, month, or year.

27. Paragraph SK11.26 states that, once a CoS has been assigned to a worker, the sponsor must inform the Home Office if there are “any significant changes to the nature of their work or salary.” Paragraph SK11.28 states that if the sponsor fails to meet this duty (among others), “we may revoke your sponsor licence.” The sponsor is referred to Part 3 of the Guidance for more information.

28. Paragraph S4.29 of Part 2 of the Guidance provides that: “You must tell us via your SMS account if a worker’s salary is reduced for a reason not related to absence after you have assigned a CoS (including after they have been granted entry clearance or permission). If you are sponsoring a Skilled Worker or Tier 2 (General) Migrant, you must check if you will need to assign a new CoS (and if the worker will need to apply for new permission) before you can reduce their salary.”

29. Paragraph S4.30 states that: “You must stop sponsoring the worker if their revised salary no longer meets any salary, hourly or going rate requirement for the job or the route on which they are being sponsored, or the change is otherwise not permitted by the Immigration Rules or sponsor guidance.”

30. Paragraph S4.31 sets out exceptions where a sponsor does not have to stop sponsoring a worker despite a reduced salary. It is stated that even where an exception applies, “you must tell us via your SMS account or any Sponsor UK account that you have reduced the worker’s salary.” The exceptions include the following: “the reduction coincides with a temporary reduction in the worker’s hours, or a phased return to work, for individual health reasons, provided: • this is supported by an occupational health assessment; and • the reduction does not result in the hourly rate falling below any hourly rate requirement which applied when the person obtained their most recent grant of permission … The worker otherwise continues to meet the salary requirements on the route on which they are being sponsored.”

31. Part 3 of the Guidance is entitled “Sponsor duties and compliance.” It provides information on “how to meet your sponsor duties and the action we will take if you breach, or are suspected of breaching, these duties” (p.5).

32. Part 3 states under the heading “Reporting Duties”: “C1.11 You must report certain changes that affect your sponsored workers or your organisation within the time limits set out below: • changes to a sponsored worker’s circumstances – unless otherwise stated, you must report these changes within 10 working days of the relevant event occurring…” “C1.13 You must report the following changes to a sponsored worker’ circumstances by no later than 10 working days after the relevant change or event has occurred, or as otherwise specified below … • a sponsored worker is absent from work without pay, or on reduced pay, for more than 4 weeks in total in any calendar year … and a valid exception applies • a sponsored worker’s salary or pay is otherwise reduced from the level stated on their CoS – see section S4 of Part 2: Sponsor a worker for more information on salary reductions.”

33. C1.10 provides that: “If you fail to comply with your sponsor duties, we may take action against you. This can include any of the following sanctions: • reducing your CoS allocation or setting it to zero • downgrading your licence rating • suspending your licence while we investigate further • revoking your licence • reporting you to the police or other relevant authorities.”

34. Annex C1 is one of three annexes to Part 3 of the Guidance that set out the circumstances in which a decision may be taken to revoke a sponsor licence. These are explained in Section 10 of Part 3 of the Guidance: “C10.4. Annex C1 of this document sets out the circumstances in which we will revoke your licence – these are known as ‘mandatory’ grounds of revocation. If any of these circumstances arise, we may revoke your licence immediately and without warning. If we do not revoke your licence immediately, we will suspend your licence pending further investigation. C10.5. Annex C2 of this document sets out the circumstances in which we will normally revoke your licence, unless there are exceptional circumstances… C10.7. Annex C3 of this document sets out the circumstances in which we may revoke your licence...”

35. Annex C1, circumstances in which the Home Office will revoke a sponsor licence, includes the following under Annex C1(aa), which states that the Home Office will revoke a sponsor’s licence if: “You pay a sponsored worker less than you said you would on the worker’s CoS, and:  you have not notified us of the change in salary; or  the reduction is not otherwise permitted by the Immigration Rules or the Workers and Temporary Workers: guidance for sponsors.”

36. If a sponsor’s licence is revoked, it cannot make a further application for a sponsor licence until at least 12 months have passed since the date on which it was notified of the revocation.

37. Where a sponsor licence is revoked, the approach that the Home Office will usually take to those sponsored under the licence is set out at C10.10. Where the worker was not actively or knowingly involved (complicit) in the reasons for revocation, the Home Office will normally shorten their permission to remain to 60 calendar days. During that time the worker have to find another sponsor, (or another qualifying route to remain in the UK) or face enforced removal if they seek to remain in the country beyond that period. Grounds of challenge Ground one Claimant's submissions

38. The claimant submitted that the revocation decision failed to follow the guidance and the defendant unlawfully fettered her discretion.

39. A policy statement should be interpreted objectively in accordance with the language used, read as always, in its proper context. It is for the court to interpret the guidance.

40. The following provisions of the guidance provide for the defendant to downgrade or to suspend the licence: "C8.1. We may downgrade your licence from an A rating to a B rating; for example, if we believe you do not have the necessary processes in place to comply with your sponsor duties or have not provided the information you held when we asked you to provide it." "C8.5 We will consider downgrading your licence if any of the issues listed in annex C2 or annex C3 arise. We reserve the right to suspend or revoke your licence without first downgrading it."

41. The revocation decision expressly framed the revocation as justified under "Annex C1" quoting C10.4, to the effect that, in “mandatory” cases, "we may revoke your licence immediately and without warning".

42. The words within the policy guidance reinforce that there is a residual discretion and that fairness obligations remain even in serious cases. A mechanistic application of “mandatory” language is unlawful, particularly where the cumulative impact on the lawful business and on the sponsored workers is profound.

43. The Court of Appeal in Prestwick and the High Court in R (Prestige Social Care Limited) v Secretary of State for the Home Department [2025] EWHC 2869 (Admin) and R (J's Supermarket Limited) v Secretary of State for the Home Department [2025] EWHC 1933 (Admin) have accepted that the defendant retains a residual discretion not to follow her own policy even when an Annex C1 ground is made out. That discretion must be exercised lawfully and rationally, particularly in borderline cases where conduct could alternatively fall under Annex C2. In J's Supermarket , the court found that the issue of proportionality could arise in a C2 case.

44. Here the defendant's decision only relied substantively on Annex C1(aa) and did not identify or rely on annex C2(a) or (b) as alternative grounds; nor did it address whether there were "exceptional circumstances" which should have precluded revocation. It treated the presence of an Annex C1 ground as dispositive of the question whether downgrading was appropriate.

45. On any sensible view, the facts here were much closer to Annex C2(a) or (b) than to the type of serious exploitation or deception which Annex C1(aa) is aimed at. The alleged breach was extremely limited in scope affecting only two of 71 sponsored workers. Both workers’ hourly rates remained compliant and there was no suggestion of exploitation. The core failing was a technical reporting omission, an issue of process which is the paradigm of concern of Annex C2(b). The claimant has otherwise demonstrated a strong commitment to compliance including investing in training and internal audits.

46. The defendant mischaracterised the case as one of "serious non-compliance" squarely triggering annex C1(aa) and failed even to turn her mind to the question whether, if annex C1(aa) was technically triggered, the case, nonetheless, fell into the “exceptional” space where revocation would be inappropriate and a downgrading or action plan should be adopted in line with Annex C2. The defendant thereby fettered her discretion, treating the mandatory language of the guidance as if it removed the need for an evaluative judgment. Conclusions

47. I accept the defendant's submissions on Ground 1.

48. The claimant's conduct fell squarely within Annex C1(aa)) not C2. The claimant had not paid A and B the required salaries. The salary reductions were not permitted under the Guidance; this was not a technical breach; it was an actual breach. The claimant failed to notify the defendant of the reductions. Annex C1 is not comprised solely of examples of "serious exploitation or deception". It is also directed at the important purpose of ensuring that migrant workers are paid in accordance with the requirements of the Guidance.

49. For breaches of Annex C2, where the defendant will normally revoke a licence or Annex C3, where the defendant will consider revoking a licence, the decision to downgrade as an alternative will form part of the reasoning of the decision, though the licence may still be revoked. That is not inevitably so for breaches of Annex C1, which set out circumstances in which the defendant will revoke a licence.

50. In this case, the defendant did consider her residual discretion to take action other than revocation. This was expressly stated at paragraph 20 of her decision where she said, "We have considered the possibility of downgrading your licence and issuing you with an action plan. However, as already started, you have acted in contravention of Annex C1(aa) of the Workers and Temporary Workers: Guidance for Sponsors part 3. Downgrading your licence is not appropriate due to the seriousness of your non-compliance with your sponsor duties".

51. The claimant referred to or relied upon the reference to downgrading at paragraph C8.1 of the Guidance, but omitted to refer to paragraph C8.2, which states: "In general, we will only downgrade your licence for relatively minor breaches … that we believe can be resolved by issuing an action plan. In more serious cases we will suspend or revoke your licence." This was a serious case, as the defendant said in her decision letter.

52. The examples from the cases cited by the claimant do not assist the claimant's case, as they are both breaches of Annex C2. The passage cited from Prestige , at [80], concerned a breach of Annex C2(a)(b) (see [76]-[77]). The passage cited from J's Supermarket , at [82], concerned a breach of Annex C2(a). Breaches of C2 provide a greater discretion as to whether a breach should lead to revocation. They are not authority for what should be done where there is a breach of Annex C1, where the Guidance expressly states that the Home Office will revoke a sponsor licence and where the breach is not a “minor” one.

53. For these reasons, I consider that ground one is unarguable and has no realistic prospect of success. Ground 2 Claimant's submissions

54. The claimant submitted that the defendant failed to take into account relevant considerations, namely, (1) the limited scope of the issue: two workers out of 71; (2) the fact that all workers were paid in accordance with contract and above national minimum, wage with no allegation of destitution or exploitation; (3) the sector context of domiciliary care and the inherent variability of hours; (4) the claimant's overall compliance record and investment in compliance systems; (5) the presence of strong mitigating factors, including the claimant's attempts to accommodate childcare and mental health issues; (6) the drastic impact on 71 sponsored workers (who will face curtailment); (7) vulnerable clients whose care packages depend on continuity of service.

55. The defendant also failed to consider the claimant's statutory and ethical obligations under UK employment and equality Law, including time off for childcare emergencies, reasonable adjustments for mental health conditions, and safeguarding responsibilities under the Health and Social Care Act 2008 . Conclusions

56. I accept the defendant's submissions on Ground 2. The public law requirement to take into account material considerations was considered by the Supreme Court in R (Friends of the Earth Limited and Others) v Heathrow Airport Limited [2020] UKSC 52 , per Lord Hodge and Lord Sales at [116-122]. A decision maker is required to take into account those considerations which are expressly or impliedly identified by statute or considerations which are "so obviously material" to a particular decision that a failure to take them into account would not be in accordance with the intention of the legislation, notwithstanding the silence of the statute. The test whether a consideration is "so obviously material that it would be unlawful not to take it into account is the Wednesbury irrationality test.

57. In Prestwick , the Court of Appeal held that the defendant was not under a duty to carry out an assessment of the impact of revocation on the sponsor, its employees, service users and the wider community. Where the defendant did not avert to this consideration at all, then it was not unlawful "unless the consideration is obviously material according to the Wednesbury irrationally test". Where it is taken into account but given no weight, it is not open to the court to interfere save where a decision maker has acted irrationally.

58. I referred earlier to the principles derived from the case law, in particular Prestwick , which held that the sponsorship scheme requires strict adherence and a sponsor must act with rigour and be vigilant. The emphasis is on certainty in place of discretion, and detail instead of broad guidance. I observe that the Guidance makes provision for the consequences of breaches on all concerned.

59. The defendant did engage with the material provided by the claimant in response to her requests for information and the representations made by the claimant, in particular the email of 13 October 2025. She held correctly that the matters raised by the claimant did not fall within the exceptions listed in paragraph S4.31 of Part 2 of the Guidance that justified departure from the CoS. In paragraph 20 of the decision, the defendant considered the effect of revocation on the business.

60. The claimant relies substantially on the matters identified in Mr Yahere's witness statement, but that statement postdated the defendant's decision and so could not have been taken into account by her.

61. In my judgment, the defendant's approach does not come close to establishing an arguable irrationality challenge. For these reasons, I consider that Ground 2 is unarguable and has no realistic prospect of success. Ground 3 Claimant's submissions

62. The claimant submitted that, on a proper reading of paragraphs S4.30, S4.31 and Annex C1(aa) in their statutory and policy context, the concept of salary was concerned with whether the workers' pay satisfied the thresholds for skilled workers. It was not designed to treat legitimate variations in the hours worked as underpayment, provided the hourly rate remained at the required level. Annex C1(aa) is about preventing exploitation. It is not intended to penalise employers when workers ask to reduce their hours. Furthermore, the nature of domiciliary care work is that hours are variable and unpredictable.

63. In this case, there were no underpayments: A and B were paid less because they worked fewer hours, for legitimate reasons. The only deductions were for transport and loans. The hourly rate in contractual hours was sufficient to meet the salaries set out in their CoS.

64. The defendant misapplied paragraph S4.31, applying the wording too strictly. Moreover, S4.31 did not exhaust all the circumstances in which a reduction in hours could be lawful.

65. The defendant was required to assess whether the claimant's conduct could have caused a threat to immigration control. This can be inferred from the wording of the Guidance and from HHJ Tindal's description of the guidance at paragraph 51(1) in Prestige. Conclusions

66. I agree with the defendant's submissions on Ground 3. As I have already stated, Annex C1(aa) is not only concerned with whether the workers are being exploited. The salary controls are intended to ensure that the resident labour market is not undercut and employers do not seek to gain an unfair advantage from the scheme.

67. The claimant was required to meet or exceed the salary stated on the CoS, and the specified general salary threshold for the occupation, and the specified going rate for the occupation. Failure to comply with any of these would amount to a breach which engaged Annex C1(aa), subject to any exceptions.

68. The requirements of the scheme include that the sponsored worker is working sufficient hours to meet the salary requirements of the scheme. If the worker is not doing that and if the exceptions do not apply, the claimant should cease to sponsor them.

69. Here, the underpayments were significant and the stated reasons for them did not justify an exception being made under the terms of the Guidance. The exception in paragraph S4.31 was clearly not met.

70. The submission that salary underpayment is only a breach if it gives rise to a threat to immigration control is unsupported by the Guidance or the case law. The claimant has misread the Guidance. It provides that a licence may be revoked (among other reasons) because there is a breach of sponsor duties or because there is a threat to immigration control (see C7.3 and C1.3 to 1.4 and C1.9 to 1.10). In the claimant's case, it was its failure to comply with its sponsor duties that led to the defendant's decision to revoke.

71. For these reasons, I consider that Ground 3 is unarguable and has no realistic prospect of success.

72. As the claimant has not established any arguable grounds, permission to apply for judicial review is refused. It follows that no interim relief can be granted as the claimant cannot demonstrate a real prospect of success at a substantive hearing. _________ Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: [email protected]