Scale-up Visa Route Unveiled

Back in April 2022, we outlined the new Global Business Mobility routes; our summary can be accessed here. Yesterday (22 August 2022) saw the introduction of the new Scale-up visa route.

UKVI has confirmed that the Scale-up route is “…for talented individuals recruited by a UK Scale-up Sponsor, who have the skills needed to enable the Scale-up business to continue growing.” It is a sponsored route, which essentially means that a UK organisation will need to secure a Scale-up sponsor licence before being able to sponsor any Scale-up migrants. However, this category of the Immigration Rules is different to other sponsored work routes because sponsorship is temporary.

Who can qualify for a Scale-up sponsor licence?

In addition to meeting the general requirements for a sponsor licence (proving that you have a genuine business case for a licence and can meet the duties imposed on you as a sponsor licence holder), organisations must meet a very specific definition to be a qualifying Scale-up sponsor.

This means that only high-growth UK-registered businesses in existence for at least 3 years and which already employ 10 staff will be able to consider this route.

The definition is confirmed in Home Office guidance:

“You must meet both of the following criteria: 

• you must have an annualised growth of at least 20% for the previous 3-year period based on either employment (your staff count) or your turnover
• you must have had a minimum of 10 employees at the start of the relevant 3-year period”

Businesses will need to pay a fee of £536 to apply for a sponsor licence and will need to provide UKVI with various reference numbers, so that UKVI can verify staff count and/or turnover with other government departments.

If a sponsor licence is granted, a Scale-up business can potentially sponsor a Scale-up Worker.

Who can qualify for a Scale-up visa?

An individual who is offered a high-skilled job with a qualifying Scale-up business will be able to apply for a Scale-up visa, although to succeed, certain criteria must be met.

The visa application can either be pursued from outside of the UK or from within the UK, if the worker holds permission to remain enabling them to switch into another immigration category. For their first application, the worker will need to score 70 points for:

• Sponsorship; job at an appropriate skill level; appropriate salary – 50 points
• English language – 10 points
• Financial – 10 points

The Scale-up worker will need to hold a valid Certificate of Sponsorship, which will be issued to them by the qualifying Scale-up business. This must confirm that the worker is expected to work for the sponsor for at least the next 6 months. The job must also be eligible for sponsorship under the Scale-up route; jobs suitable for sponsorship are outlined in Appendix Skilled Occupations. Note that not all roles are suitable for sponsorship under the Scale-up route; various director roles are, as are various scientist and legal roles, but many roles, including management and technician roles, are not suitable for sponsorship. Latitude Law can help organisations to match a proposed role to the roles suitable for sponsorship under the Immigration Rules.

The Scale-up worker must be paid an appropriate salary, which must be at least £33,000 per year and £10.10 per hour, unless the going rate for the role is higher, in which case the going rate for the proposed role must be paid.

Scale-up workers must provide specified evidence that they can communicate in English to at least Level B1 CEFR, and must also comply with a financial requirement, unless this is certified by their sponsor.

If successful, the worker will receive permission to stay in the UK for 2 years. Their permission to remain will contain a requirement that they work for their sponsor in the role specified on the Certificate of Sponsorship for at least 6 months.

What next?

The Scale-up worker will be able to pursue an unsponsored application. This means they won’t need a Certificate of Sponsorship from a Scale-up sponsor to proceed with their application to extend their permission to remain. However, they will need to prove that their PAYE earnings in the UK have exceeded at least £33,000 per year throughout half of their permission as a Scale-up Worker. Whilst a Scale-up worker can undertake self-employment in the UK, the worker cannot rely on self-employment income or earnings from outside the UK. This requirement perhaps exists due to the issues that arose for self-employed workers under the Tier 1 (General) category many years ago.

If the above criteria are met, the worker should qualify for an extension of stay for a period of 3 years. They can qualify for settlement after 5 years continuous residence in the UK. Their earnings will again be assessed for the purpose of their settlement application; UKVI will expect the worker to have received at least £33,000 per year during at least 2 years of the preceding 3 years.

Can family members relocate to the UK with the Scale-up worker?

Yes, the worker’s partner and children can apply for permission to join the Scale-up worker in the UK.

Who will likely benefit from the route?

The Scale-up route will only benefit organisations who can prove annualised growth of at least 20% for the 3-year period before applying for a sponsor licence (based on either employment or turnover), and who had a minimum of 10 employees at the start of the relevant 3-year period. If this definition is met (and it only needs to be met at the date of the sponsor licence application), the route may be useful for high-growth businesses looking to recruit overseas talent.

Assessing high growth seems straightforward when assessing staff numbers; for turnover, government guidance confirms this will be based on VAT returns.  This may be an inappropriate measure, as some businesses turn over a significant amount of non-VATable business.  Latitude Law is a case in point, with a high number of our clients being based outside the UK.

Importantly, organisations will only be responsible for their Scale-up workers for the first 6 months of the worker’s residence in the UK. Sponsorship duties for the worker – which include retaining specified documents, information, and reporting certain information about the worker/the role to UKVI - will therefore only last for 6 months.

The obvious downside is that the worker could leave the organisation after 6 months and this wouldn’t affect their visa. Contrast this with the Skilled Worker, Global Business Mobility Senior or Specialist Worker routes, which require continuous sponsorship throughout the worker’s presence in the UK.

In addition to organisations (regardless of size) benefiting from the lower sponsor licence application fee of £536, organisations also won’t need to pay the immigration skills charge when assigning a Certificate of Sponsorship. The ISC is calculated at either £364 or £1000 per year of sponsorship (depending on the size of the sponsoring organisation), so can make sponsorship expensive.

Only time will tell if the introduction of this route will “entice the world’s top talent” to the UK, which is what the government are hoping. Our initial view is that the Scale-up visa will form a very small piece of the economic visa jigsaw the government seems intent on creating, with take-up likely to be low.

Latitude Law’s specialist team helps many businesses and organisations with the sponsorship of workers. If you would like to speak to one of our experts concerning your workers travelling to the UK, call us now on 0300 131 6767 or complete our online enquiry form.