How does the Home Office find out we underpaid a sponsored worker?

The Home Office can identify underpayment by comparing the salary stated on the Certificate of Sponsorship with HMRC information and the employer's own records. During a compliance check it may inspect payslips, payment evidence, contracts and systems, interview staff or workers, and investigate any difference between what was sponsored and what was paid.

Does the Home Office receive information from HMRC?

Skilled Worker sponsor guidance, paragraph SK7.19 says the Home Office will regularly check that a worker is being paid at least the salary stated on the CoS or in a later change of circumstances notification. It expressly says this may be done through compliance checks, HMRC checks, or both.

That means a sponsor should not treat the CoS, payroll and HMRC reporting as separate records. They form parts of the same audit trail. A discrepancy may be visible before anyone asks the sponsor to explain it.

What can a compliance officer inspect?

Sponsor Guidance Part 3, paragraphs C7.14 to C7.17 say a check may take place on-site or digitally, include interviews, inspect records or systems, request evidence remotely and involve checks with other government departments.

For salary compliance, the core records are set out in Appendix D, section 3:

section 3(a): payslips showing the worker's identity, tax information, allowances and deductions;
section 3(b): evidence showing each salary payment reaching the named worker's account; and
section 3(c): the contract or written particulars showing the job, hours and pay.

The Home Office can then compare those records with the CoS and the salary rules in paragraphs SK7.19 to SK7.25.

Which differences usually need an explanation?

A reviewer is likely to ask questions where:

the CoS salary does not match the contract;
the contracted hours do not match the working records;
gross pay is below the amount expected for the pay period;
deductions reduce the amount in a way that engages the salary rules;
payment evidence does not match the payslip;
the worker describes hours, duties or pay differently from the records; or
payroll changed but no corresponding sponsor record or SMS report can be found.

The task is not simply to produce each document. It is to show that the documents tell the same accurate story.

How should we check our records before the Home Office does?

Choose one sponsored worker and follow the evidence from start to finish:

1. read the salary, hours, occupation code and work location on the CoS;
2. compare them with the signed contract and any later variation;
3. calculate the salary required for the actual pay period under SK7.20 to SK7.24;
4. compare that figure with gross pay and relevant deductions on the payslip;
5. match the net payment to the named worker's bank evidence;
6. compare paid hours with rotas or timesheets where hours affect the calculation;
7. check whether any reduction or change required an SMS report under C1.13 and C1.15; and
8. retain the calculation and the evidence used.

Repeat the same test for every sponsored worker and every relevant pay period. If one discrepancy results from a shared payroll or rota process, check everyone affected by that process.

What happens when the Home Office finds a discrepancy?

Part 3, paragraph C7.20 says the Home Office will investigate discrepancies found after a decision and may take action where appropriate. Paragraph C9.1 says it may suspend a licence while making further enquiries if it believes sponsor duties are being breached or immigration control is at risk.

A discrepancy is not the same as automatic revocation. The sponsor's position will depend on the rule, evidence, explanation, reporting and wider systems. The safest response is a complete chronology supported by original records.

This article provides general information and is not legal advice. Check the current guidance and the facts of the individual case before acting.

Related questions

Can the Home Office check pay without visiting us?

Yes. SK7.19 refers to HMRC checks as well as compliance checks. Part 3, C7.16 also allows evidence requests by telephone, video conference or letter.

Will organised personnel files protect us if the figures are wrong?

No. Organisation helps an audit, but it does not cure a discrepancy. The CoS, contract, payslip, payment evidence and working records must be accurate and consistent.

What if the payroll provider made the error?

The sponsor remains responsible for its sponsor duties. Part 3, C1.11 places reporting, record-keeping and compliance duties on the licensed sponsor.

Should we correct records before replying to the Home Office?

Correct genuine errors, but keep the originals and a dated explanation. Do not replace the audit trail. Show what happened, what was corrected and how recurrence will be prevented.

Can the Home Office speak directly to sponsored workers?

Yes. Part 3, C7.14 and C7.15 allow interviews with sponsored workers and other staff during a compliance check.