What to do if you receive a civil penalty for illegal working

Previously the issuing of civil penalties was a reasonably infrequent event; however, with the increased digitalisation and exchanging of information, there has been an uptick in the number of employers receiving civil penalties as enforcement action increases. The number of civil penalties increased in Q1 of 2025 by nearly 53% on the previous quarter.

Much like other civil penalties, scenarios whereby a business can become involved in illegal working can come about inadvertently.

What to do if you have received a penalty notice?

Firstly, the business needs to confirm that the penalty notice was correctly issued (e.g. checking the name and employee details). The date by which it must respond must also be noted. If the employer wishes to contest the notice, it must do so in writing within 28 days of receipt.

Accepting the penalty and paying early is incentivised and can reduce the fine. However, given the sums of money involved, it is important to check thoroughly whether the business might possibly be able to avoid liability for the penalty, and by checking whether the penalty might have been issued wrongly or whether there are mitigating circumstances. 

How to challenge a civil penalty for illegal working 

The grounds on which a civil penalty can be challenged are limited and set by the law (namely section 16 of the Immigration, Asylum and Nationality Act 2006). 

There are three grounds for a challenge:

• There is no liability (e.g. the penalty is issued incorrectly, such as to the wrong employer);
• The employer has a valid right to work and statutory excuse; or
• The penalty issued is too high (due to mitigating circumstances that have not been accounted for).

A penalty notice can be substituted with a warning notice if UKVI decides not to pursue the action. However, if the penalty is not removed, the next possible step for the organisation is to challenge this further is by appealing to a county court within 28 days of notice of UKVI’s decision to uphold the penalty.

As with any court proceedings, there are procedural and statutory requirements that must be adhered to, otherwise a claim can run into difficulties.

What else might follow?

Unfortunately for some organisations the troubles with a civil penalty do not end with payment of the fine.

If an organisation holds a sponsor licence, it is very likely that enforcement action will follow a civil penalty, with repeat or multiple civil penalties risking mandatory revocation of an organisation’s sponsor licence.

Reputational risk is a potential issue as UKVI publishes online a list of organisations that have been issued with more than one civil penalty for illegal working or have failed to pay a penalty. There is also potential for criminal allegations if UKVI considers an employer may have knowingly contrived to break immigration laws.

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Robert Houchill has extensive experience assisting individuals and organisations with their UK immigration and nationality matters. His experience covers all kinds of immigration and nationality applications, with a particular emphasis on corporate immigration matters and complex immigration issues faced by individuals.