A key Sponsor Management System (SMS) change is approaching that many sponsors may have overlooked. While much of the recent attention has focused on the introduction of multi-factor authentication (MFA), employers should not underestimate the operational impact of the Home Office’s decision to abolish the Level 2 User role.
The change will require sponsors to review their current SMS structures, identify affected users and implement alternative governance arrangements before the transition deadline.
From 9 September 2026, sponsors will no longer be able to appoint new Level 2 Users on their sponsor licence. Existing Level 2 Users will remain in place temporarily, but sponsors must either:
Any remaining Level 2 User accounts will be deactivated by the Home Office after 8 March 2027.
This marks the end of a role that many organisations have relied upon to provide limited administrative access to HR teams, business units and external advisers.
Historically, the Level 2 User role provided sponsors with a flexible mechanism for delegating certain day-to-day sponsorship activities without granting access to the wider functionality available to Level 1 Users.
The removal of the role means sponsors will have fewer SMS permission levels available and may need to reconsider who within the organisation should hold licence access going forward. Organisations operating decentralised HR models, those with multiple UK locations, or those relying heavily on external support may be particularly affected.
The Home Office has indicated that not all existing Level 2 Users will be eligible to become Level 1 Users. Certain arrangements previously permitted under the Level 2 framework may therefore no longer be possible once the transition period ends.
The announcement forms part of a broader Home Office initiative to strengthen sponsor licence governance and accountability. Alongside the withdrawal of the Level 2 role, the Home Office is increasing oversight of sponsor licence activity and placing greater emphasis on the responsibilities of Authorising Officers and Level 1 Users.
For many organisations, this will be an opportune moment to ask:
Sponsors that leave these questions unanswered until the March 2027 deadline may find themselves facing unnecessary disruption.
Although there remains a transition period, employers should begin planning now.
Vialto recommends that sponsors:
As a reminder, the Home Office has also begun rolling out mandatory MFA for SMS users. Sponsors should ensure SMS user details, including email addresses and mobile telephone numbers, remain accurate so access is not disrupted when MFA is enabled on their licence.
The removal of Level 2 Users is arguably the most significant SMS governance change in recent years. Whilst the introduction of MFA is largely a technical and security enhancement, the abolition of the Level 2 role may require sponsors to redesign how they manage sponsor licence access internally.
Employers should use the transition period to review governance structures, strengthen oversight arrangements and ensure they have appropriately trained Level 1 Users in place before the Home Office completes the migration process.
Vialto can assist with SMS governance reviews, user audits, Level 1 User training and sponsor licence compliance assessments to help organisations prepare for the withdrawal of the Level 2 User role and maintain effective control of their sponsor licence.
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact.
Lyudmyla Davies
Partner
Sarah Ingles
Partner
Adam Sinfield
Director
Andrea Als
Director
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