UK Home Office has confirmed significant changes to the Sponsorship Management System (SMS), requiring UK sponsor licence holders to review their existing Level 2 user accounts before March 2027.
From 9 September 2026, sponsors have been unable to appoint new Level 2 users. Existing users can continue accessing the system temporarily, but their accounts must be converted to Level 1 or deactivated by 8 March 2027.
These changes will affect how employers manage their sponsor licences, particularly organisations that rely on Level 2 users for sponsorship administration.
What Is Changing for Level 2 SMS Users?
Under the updated Home Office guidance, sponsors must take action regarding their existing Level 2 users.
The requirements are:
- 9 September 2026: Sponsors can no longer appoint new Level 2 users.
- 8 March 2027: Deadline to convert eligible Level 2 users to Level 1 or deactivate their accounts.
- After 8 March 2027: The Home Office will automatically deactivate any remaining Level 2 accounts.
Sponsors should review their existing accounts before the deadline to prevent unnecessary disruption to sponsorship administration.
What Is the Difference Between Level 1 and Level 2 SMS Users?
Level 1 and Level 2 users have different responsibilities within the Sponsorship Management System.
Level 2 users have limited permissions. They can create and assign Certificates of Sponsorship (CoS) and report worker activity relating to certificates they have assigned or received through a transfer.
Level 1 users have wider responsibilities, including:
- Assigning Certificates of Sponsorship.
- Requesting additional CoS allocations.
- Reporting changes to sponsored workers’ circumstances.
- Updating sponsor licence information.
- Managing and deactivating SMS user accounts.
Converting a Level 2 user to Level 1 therefore provides access to additional functions.
Employers should consider whether individuals require these permissions before approving their conversion.
Who Can Be Converted to a Level 1 SMS User?
Not every existing Level 2 user will qualify for conversion.
The Home Office requires individuals to meet the eligibility requirements applicable to Level 1 users.
Importantly, temporary workers supplied by an employment business who are not directly employed by the sponsor cannot be converted to Level 1 users.
Sponsors should assess each user’s eligibility before making changes to their accounts.
The Home Office also recommends keeping the number of Level 1 users to the minimum necessary for effective sponsor licence management.
How Does Mandatory MFA Affect SMS Users?
The Level 2 changes coincide with the introduction of mandatory multi-factor authentication (MFA) for SMS accounts. UK Home Office began introducing MFA on 3 September 2026, with the rollout expected to cover all sponsors by November 2026.
MFA requires users to enter a one-time passcode alongside their username and password.
For Level 1 users, the passcode is sent:
- By text message where a valid mobile number is registered.
- By email where no valid mobile number is recorded.
Level 1 users must also ensure their date of birth and contact information are correctly recorded.
Sponsors should check these details before converting existing Level 2 accounts.
UK Home Office warns that sharing SMS passwords or MFA passcodes may result in sponsor licence revocation.
Could Inactive SMS Accounts Put Sponsor Licences at Risk?
UK Home Office has also introduced measures addressing inactive SMS accounts.
An account is considered inactive when its user has not accessed the system for 12 months or more.
Where the Home Office identifies inactive accounts, sponsors must take the required action within the specified period.
If account deactivation leaves an organisation without an active Level 1 user, the Home Office will suspend its sponsor licence.
The organisation will then have 28 days to nominate an eligible Level 1 user. Failure to do so will normally result in licence revocation.
Employers should therefore review inactive accounts alongside the upcoming Level 2 transition.
For further information, read our article on inactive SMS user accounts and sponsor licence risks.
How Can Morgan Smith Immigration Help?
The removal of Level 2 SMS access requires sponsors to review their existing users and make the necessary changes before 8 March 2027.
Morgan Smith Immigration can assist employers with sponsor licence compliance, SMS user management and understanding their responsibilities under the updated Home Office requirements.
For professional immigration advice, contact Morgan Smith Immigration on 0203 959 3335 or email [email protected].
