Updated March 2024
The UK’s flexible new immigration route launched on 22 August 2022. Rishi Sunak insisted that the Scale-up visa is at the centre of a “plan to make our visa system for international talent the most competitive in the world.”
So what do we know about this much hyped option for fast-growing businesses who need to recruit talent from around the world?
Why has the Scale-up visa been launched?
The UK Government is embarking on a raft of measures as part of its plan to make the UK a global innovation hub by 2035 and for many firms they can’t come soon enough. As Britain’s record amount of job vacancies make headlines, so do the record amount of people in employment, partly fuelled by a record number of work visas – as you would expect following the end of free movement with the EU.
Scale-ups rely heavily on international talent. For 21% of scale-ups surveyed in the Scaleup Institute 2021 annual review, a quarter or more of staff had come from outside the UK, so it’s no surprise that 45% of scale-ups employing staff from overseas insist it would be “very important or vital” to have access to a fast track visa for hiring overseas.
This new route has been set up to facilitate “employers who are in a sustained period of high growth to recruit people to work in the UK in highly skilled roles.”
How can firms qualify to sponsor staff on a Scale-up visa?
To be eligible for a Scale-up sponsor licence an employer will need to show annualised growth in either turnover or staffing of at least 20% for the previous three-year period and that they had a minimum of 10 employees at the start of the period.
The Home Office will use an employer’s PAYE data from the HMRC to determine if they meet these requirements. Potential sponsors should have a minimum of 37 months’ worth of unbroken history with HMRC. If you do not meet the employment growth criteria, the Home Office will check whether you meet the turnover growth criteria. If there are gaps in an applicant’s HMRC records, the check is likely to fail.
Successful organisations will then be able to apply for a Scale-up sponsor licence and the valid Certificate of Sponsorship that a migrant staff member would need to work for them in the UK on a Scale-up visa.
If a company does not have a long enough history with the HMRC it may apply to one of the UK Government approved endorsing bodies to endorse its qualification as a scale-up – see below.
Companies may choose to use a Scale-up sponsor licence at the same time as a Skilled Worker sponsor licence and other work immigration options.
For a quick break-down of the sponsor licence process for employers click here.
Contact us on 0207 033 9527 or enquiries@vanessaganguin.com if you may benefit from advice on eligibility or require assistance with the sponsorship process for this or other work visas. We are highly rated in guides such as the Times Best Law Firms for our work with companies of all sizes.
What is the new endorsing body pathway to qualify for a Scale-up Sponsor Licence?
The endorsing body pathway is for organisations who are unable to qualify under the standard pathway because their HMRC history is not long enough.
Instead, they can first obtain an endorsement – which will involve an additional fee – from a Home Office-approved endorsing body and if they fulfil the criteria, then apply for a sponsor licence.
To qualify for an endorsement, applicants must satisfy the endorsing body that they meet each of the following requirements:
- a minimum of 10 employees who pay income tax and national insurance through a PAYE scheme operated by the organisation applying
- registered for VAT
- solvent and trading in the UK
- an HMRC footprint of under four years
- demonstrate a potential growth rate consistent with the requirements of the Scale-up route and reasonably expected to meet the Home Office definition of a qualifying Scale-up sponsor under the standard pathway within the next four years
- sufficient finance to offer appropriate salaries to individuals working in roles that meet the skill level of this route
- a UK-registered corporate bank account
In addition to the requirements above, organisations must also meet at least three out of the following five criteria:
- applicants can show over 20% growth in turnover or employment per year over a two-year period
- participation in a relevant Government programme or receipt of relevant Government funding EG: Innovate UK EDGE, DCMS Creative Scale-up, an Innovate UK loan or grant; or participation in the Small Business Research Initiative
- applicants have raised a minimum of £1 million in equity finance in a single round in the 12 months immediately before the date of application to the endorsing body
- applicants have an international presence evidenced with global offices or operations and generating a minimum threshold of 10% of turnover from exports
- expenditure on research, development or innovation must be either 10% of overall operating costs per year for three years or 15% in one of the last three years.
NB: applicants must apply for their Scale-up licence within three months of being endorsed.
Who are the approved endorsing bodies for the Scale-up sponsor licence?
The following organisations can issue endorsements for Scale-up licenses for companies which cannot use the HMRC route as well as for Innovator Founder Visa applications.
The Global Entrepreneurs Programme (GEP)
NB: The Global Entrepreneurs Programme (GEP) is a government programme run by the Department for Business and Trade for internationally mobile, tech-based entrepreneurs and helps them scale and internationalise their innovation rich companies from a UK global HQ. GEP only provide visa endorsements for founders that have already been invited to participate on their programme.
For further information about the eligibility criteria for GEP, contact global.entrepreneurs@trade.gov.uk
How long does a Scale-up sponsor licence take?
The process largely depends on the Home Office checking applicants’ HMRC records and requires less documentation than other sponsor licence applications, suggesting it should be expedited much quicker. There is no telling by when, but the Home Office is aiming to be able to process Scale-up applications within five working days – much swifter than the current eight-week target for other sponsor licences.
Who can you sponsor on a visa as a Scale-up Worker?
As with sponsoring employees on other work visa routes, it must be a genuine vacancy that someone hired as a Scale-up Worker would be filling.
What is the skill level for a Scale-up visa?
The vacancy must be for someone at an appropriate skill level – a minimum skill level of RQF Level 6. This is the same as most Global Business Mobility visa requirements, but higher than the RQF Level 3 skill level requirement for the most popular work visa route, that of the Skilled Worker visa.
What jobs can employees on a Scale-up visa fill?
A list of occupations with a qualifying Standard Occupational Classification ( or SOC code) for a Scale-up visa can now be found on the UK Home Office’s Appendix Skilled Occupations list. The more highly skilled RQF Level 6 roles are marked “eligible for GBM and SCU” (Global Business Mobility visa and Scale-up).
What is the salary requirement for a Scale-up visa?
Scale-up workers should be paid the highest salary out of a general salary threshold for a Scale-up Worker position of £34,600 per annum based on a maximum 48-hour week (currently higher than that for a Skilled Worker visa which is currently at least £26,200 – but not for long – see below), the going rate for the sponsored occupation as set out in Appendix Skilled Workers of the Immigration Rules and at least £10.10 per hour.
As with Skilled Worker visas, the minimum salary requirements only include guaranteed basic gross pay, not allowances or other benefits.
NB: On 4 April 2024, the salary threshold and going rates to apply for a Skilled Worker visa are set to increase. The government has also increased the threshold salary for the Scale-up route, raising this from £34,600 to £36,300 (while the Skilled Worker threshold has overtaken it, rising to £38,700). The going rate for occupations sponsored on a Scale-up visa will continue to be set at the 25th percentile of all salaries for that job, unlike Skilled Worker visas where salaries will have to match a much higher median going rate.
Contact us on 0207 033 9527 or enquiries@vanessaganguin.com if you have any concerns or want any more details.
What are the financial eligibility requirements for a Scale-up visa?
Unless they have lived in the UK for 12 months, Scale-up Workers will also need to meet the financial requirement: holding funds of at least £1,270 for 28 days or for this requirement being certified by an A-rated sponsor.
What are the English language requirements for a Scale-up visa?
In addition to the financial, earnings and skills thresholds for employees sponsored on a Scale-up visa, they will have an English language requirement of CEFR level B1.
How are Scale-up visas different from other sponsored work visas?
The main difference between the Scale-up visa and other sponsored corporate immigration routes is that it will have sponsored and unsponsored applications. The first sponsored stage will give Scale-up Workers permission to stay in the UK for two years and requires a job offer from a Scale-up sponsor of a minimum of just six months.
In the second unsponsored stage of up to three years, Scale-up Workers no longer require sponsorship, as long as previous UK PAYE earnings were at least £33,000 per annum during at least 50% of their initial permission to stay on a Scale-up visa (or £34,600 if their last certificate of sponsorship was after 11 April 2023).
Qualifying earnings must have been recorded through PAYE and cannot come from other sources, such as self-employment or overseas income. However, if an applicant was on statutory maternity, paternity, parental or shared parental leave, statutory adoption leave or sick leave during the relevant period, this will all count towards meeting the threshold for the duration of that leave. (Though there is no mention of industrial action in the rules.) As with initial applications and the Skilled Worker category, only gross basic pay will be taken into account.
So for example, if applying for the unsponsored stage after two years under the Scale-up visa, a migrant would show that they had sufficient PAYE earnings for at least 12 months during those initial two years. This is in addition to a Scale-up Worker’s English language and finance requirements, which at this stage are likely to be met automatically.
At the end of the initial two-year period, a Scale-up Worker would apply for an extension of permission (as an unsponsored Scale-up Worker). If successful, they will be granted permission for a further three years. There is no limit on the number of times a person can be granted on the Scale-up route.
How long will employers have to sponsor Scale-up Workers for?
Employers will only need be sponsoring a Scale-up Worker for the first six months of their employment. (Unless a scale-up stops sponsoring them for any reason before that period ends). At the end of the six-month period of sponsorship, sponsors need not do anything – their sponsorship responsibility for that worker will automatically end at this point.
The Scale-up Worker can continue working for their employer in the same or different employment, or they can change employer, without needing to make a new application for permission, provided they continue to meet the requirements detailed above.
What are the employer benefits of a Scale-up visa?
The Scale-up visa is intended to make it easier for eligible UK Scale-up sponsors to recruit talent with the skills to help them to continue scaling up. Announced as a fast-track immigration route, the Scale-up visa complements other work immigration routes such as the Skilled Worker visa and the new Global Business Mobility routes.
Unlike some of these other business immigration routes though, the Scale-up visa has no Immigration Skills Charge – which is payable on every year a staff member is sponsored. The sponsor licence application is cheaper than many of the other categories too.
From 4 April 2024, both the threshold and the going rate that new Scale-up workers will have to be paid will now be set lower than for Skilled Workers, despite the Scale-up visa technically being a more skilled route (RQF Level 6). Combined with the lower licence fee, Certificate of Sponsorship (CoS) fee and lack of Immigration Skills Charge, this will be a very attractive alternative for eligible sponsors going forward.
This Scale-up visa also provides flexibility – attractive for both employers and talent coming to the UK, as for instance, unlike other sponsored work visa routes, a sponsoring employer need only confirm that an applicant is expected to work for them for at least the first six months of their visa.
While it continues to be a niche route with unique growth criteria to qualify for a sponsor licence, a streamlined sponsor licence application process, lower salary requirements than Skilled Worker visas, removing a skills charge and the short period of sponsorship responsibilities, will all help reduce costs and admin for firms.
What are the benefits of a Scale-up visa for applicants?
For migrants, the attractiveness of the Scale-up visa is that although they need to work for a sponsor for at least six months, they can also carry out other work at the same time and after their sponsored role ends, including self-employment.
However, it is important to note that only PAYE income will count towards the qualifying earnings for their next application.
Unique to this flexible five-year immigration route to settlement, Scale-up Workers will be able to switch to different sponsored roles in the first six months, and after at least six months in sponsored work, Scale-up Workers will be free to move jobs without a further visa application. They will be able to undertake any work (including self-employment and voluntary work) except for work as a professional sportsperson or coach.
Can people in the UK on another visa switch to a Scale-up visa?
People in the UK on another immigration route can change to the Scale-up route if they meet all the relevant immigration requirements and were not last granted permission:
- as a Visitor
- as a Short-term student
- as a Parent of a Child Student
- as a Seasonal Worker
- as a Domestic Worker in a Private Household
- outside the Immigration Rules
If a worker you wish to sponsor is in the UK on any of the above routes, they will need to leave the UK and apply for entry clearance as a Scale-up Worker.
How will the Scale-up visa be a route to settlement in the UK?
After five years continuous qualifying residence, Scale-up Workers can apply for indefinite leave to remain in the UK. The continuous residence period can also include time spent in the Skilled Worker, Global Talent, Innovator, T2 Minister of Religion, International Sportsperson, Representative of an Overseas Business or Tier 1 categories (excluding Graduate Entrepreneur).
To be eligible for settlement, the applicant would have to be in employment in the UK on the date of application with a PAYE salary paid of at least £34,600 per year. They would also need to demonstrate monthly PAYE earnings in the UK equivalent to at least £33,000 (or £34,600 if their last certificate of sponsorship was after 11 April 2023) per year during at least 24 months of the three years immediately before the date of application.
If someone on a Start-up visa is in the unsponsored stage of their visa, they can apply for settlement as long as they meet the earning and residence requirements detailed above and any other applicable requirements, such as passing the Life in the UK test.
Contact us on 0207 033 9527 or enquiries@vanessaganguin.com if you may benefit from advice on eligibility or require assistance with the settlement process. We advise on the full range of family immigration options and paths to settlement.
Can family join people on the Scale-up visa and settle too?
Dependent partners and dependent children are able to apply to accompany or join migrants on a Scale-up visa.
Relationship, age and care requirements apply as in similar categories such as Skilled Worker, as does the financial requirement where the dependent applying has not been living in the UK for at least 12 months.
The sponsor of a Scale-up Worker can only certify the financial requirement for dependants if the date of application is at least one month before the end of the minimum six months that the Scale-up Worker must work for the sponsor.
Dependants will be granted the same amount of permission to stay as the Scale-up Worker, or for three years if the Scale-up Worker has been (or is being) granted settlement.
To qualify for settlement, dependent partners must complete a continuous period of five years in the UK with permission as a partner of the Scale-up Worker (or former Scale-up Worker, if applicable).
Dependent children can apply for settlement if both parents have been /are being granted settlement or sole responsibility rules apply.
Contact us to discuss your sponsor licence or visa.
We advise on all types of business and personal immigration applications and issues and will help identify the very best option for your firm and job candidates of choice. We are very experienced in finding speedy and affordable solutions and avoiding the common pitfalls.
For a free initial chat to find out how we can help you please call us on 0207 033 9527 or email enquiries@vanessaganguin.com.
More information on the other UK work visa options can be found here.
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