- What is a “scale-up” anyway?
- What can you do on a Scale-up visa?
- How do you apply?
- What about sponsor obligations?
- How to apply
- How much does it cost?
- And finally, settlement applications
The Scale-up visa is a new immigration route for workers from abroad that opened on 22 August 2022. The Home Office bills this as a visa route for high-growth businesses to attract top talent to the UK. Supposedly, the route offers sponsors the flexibility that fast-growing organisations need, and that highly talented migrants want.
The Scale-up route has two stages, after which the migrant potentially qualifies for settlement:
- Sponsored stage of 2 years
- Unsponsored stage of 3 years
Applicants entering the route first of all make a sponsored application with a valid Certificate of Sponsorship (CoS) from a qualifying Scale-up sponsor. The initial visa lasts for two years, but the applicant must work for the specified sponsor for only the first six months. After that, the worker applies to extend their visa, provided their previous earnings met the necessary income threshold.
The key advantages of the scale up visa route are:
- Scale-up sponsors are only required to sponsor workers for six months.
- After six months, a sponsor’s administrative duties fall away (see below).
- There is no Immigration Skills Charge, saving sponsors up to £5,000 on visa fees.
- Flexibility for workers – after the initial period, workers have the option to either stay with the sponsor or leave to work elsewhere. This introduces a relatively mobile group of workers to the UK labour market who have the option to work at organisations that may not necessarily have a sponsor licence.
In this blog post we outline the process of applying at each stage of the process.
What is a “scale-up” anyway?
A “scale-up” is basically a high-growth company; a start-up in its adolescent phase, if you will. In line with the definition adopted by the Organisation for Economic Co-operation and Development, the Home Office defines scale-up sponsors as organisations that meet both of the following criteria:
- Annualised growth of at least 20% for the previous 3-year period based on either employment count or turnover
- A minimum of 10 employees at the start of the relevant 3-year period.
At the last count, there were around 33,000 scaleups in the UK, generating around £1.1 trillion in turnover between them. They seem to rely heavily on overseas talent: 47% of those surveyed by the Scale-up Institute in 2021 employ staff from overseas and insist it is vital they can continue to do so. It is perhaps these figures that led former chancellor, Rishi Sunak, to gush that: “Scaleup businesses are key to driving growth, creating jobs and critical to our future success”.
What can you do on a Scale-up visa?
Successful applicants will be granted permission and can:
- Work in the sponsored employment for at least the first six months and may also take on additional work during this period.
- Leave the sponsor after six months to work anywhere, including for organisations that do not have a sponsor licence.
- Take on self-employed work or voluntary work.
- Study (subject to Academic Technology Approval Scheme requirements).
Applicants can sponsor dependent family members.
Applicants cannot access to public funds, and the professional sports restriction remains in place. Although the rules still mention the police registration requirements for some nationalities, this requirement is on its way out.
How do you apply?
First, get a Scale-up licence in place
Sponsors must hold a valid sponsor licence for the Scale-up route. Those who hold a general sponsor licence already will need to add the Scale-up limb to their licence. Sponsors can apply using the portal to add the Scale-up limb but do not need to submit supporting documentation as the Home Office will instead check HMRC data directly. Sponsors should ensure their HMRC filings are up to date, there aren’t gaps in their HMRC records, and all PAYE references in use are on their sponsor licence before applying.
The Home Office will check the sponsor is solvent, has at least 37 months’ worth of HMRC history, and a minimum of 10 employees at the start of the 3-year period. The Scale-up test can be passed by one of the following:
- Employee growth: average employment count in the most recent 12-month period must show a growth rate of at least 20% per year since the start of the 3 years.
- Turnover growth: meets or exceeds the 20% growth in turnover in the most recent 12-month period.
Unusually, and unlike other limbs, the Scale-up licence cannot be renewed beyond the four years. The Home Office classifies this as a temporary work route so once the Scale-up limb is added, this is valid for four years. To continue sponsoring workers, the Home Office expects sponsors to apply to be licenced under one of the other sponsored routes. Presumably, the Home Office envisages sponsors only needing this limb in place for a high growth period.
Next, apply as a Sponsored Scale-up Worker
To qualify for the sponsored stage, an applicant must score 50 points, which they can get by meeting the following requirements:
- Certificate of Sponsorship issued by an A-rated Scale-up sponsor – this must confirm the details of the employment and that they will be employed for at least 6 months.
- Role at an appropriate skill level in Appendix Skilled Occupations – note that this is at RQF Level 6 vs RQF 3 for Skilled Workers.
- Being paid the appropriate salary – this must be the higher of the general salary threshold of £33,000, the going rate for the applicant’s occupation code, and £10.10 an hour.
If the applicant meets the requirements for the sponsored application, the Home Office will grant entry clearance or permission to stay for two years. The applicant must work for the sponsor for the first six months. If the worker wishes to change employer, sponsor or job during this initial six-month period, they may need a new certificate of sponsorship and to apply for permission as a sponsored worker all over again.
Apply as an Unsponsored Scale-up Worker
To qualify for the unsponsored stage, an applicant must:
- Already have permission as a Scale-up Worker
- Have PAYE earnings in the UK equivalent to at least £33,000 per year, during at least 50% of their permission as a Scale-up Worker (e.g. 12 months for someone with two years’ permission previously).
If the applicant meets the requirements for the unsponsored application, the Home Office will grant permission for three years.
It is worth noting here that there are strict rules on the type of income can be counted. In short, the Home Office is looking for basic gross pay as recorded through PAYE. Applicants cannot count self-employed income (although self employment is actually permitted under this route) or overseas income or savings. In addition, you cannot average earnings across the whole 12-month period. Where gross earnings are below £2,750 in a month, this cannot be offset by earning more across other months. And although there is no limit on the number of jobs that applicants can take, if an applicant is claiming earnings from different employments, this must be from different months. There is a bit of leeway so periods of time on statutory parental leave or sick leave are treated as months where the income requirement is met.
The Home Office is moving towards a system of checking PAYE earnings with HMRC directly. Practitioners may therefore want to check PAYE earnings on the HMRC portal and/or provide the payslips that are relied on.
All the other usual rules apply at the application stage here so do check:
- Appendix English language can be met. Applicants must prove they have English language skills at CEFR level B1 or above in all 4 components (speaking, listening, reading, writing).
- Appendix Finance can be met. The applicant will need to show at least £1,270, unless the sponsor is certifying maintenance on the Cos with the sponsored stage OR they are applying for permission to stay, having been in the UK for 12 months or more.
- The grounds of refusal requirements in Immigration Rules part 9: grounds for refusal do not apply.
- Whether criminal record certificates are needed for applicants applying in some SOC codes.
- Whether letters regarding any recent scholarships are needed.
- Whether the ATAS requirement is in play.
- A TB test is taken if applying overseas from an Appendix T country.
What about sponsor obligations?
Given the route was meant to reduce the administrative responsibilities on sponsors, the guidance has been updated to take into account the changes that the Scale-up route introduces. Of note:
- Sponsors need to report the date that the Scale-up worker starts working.
- Sponsors must notify the Home Office if the worker fails to start, is absent from work, or if there are significant changes to the nature of their work or salary.
- Sponsor need not notify the Home Office when the Scale-up migrant leaves. In fact, the sponsor’s responsibility for the Scale-up worker automatically ends six months after the ‘valid from’ date on their visa. The Scale-up worker can stay on with the sponsor or change employment without needing to make a new application for permission.
Although the sponsor doesn’t need to report on individual migrants after the six months, other obligations, such as a change of address or change of ownership, all remain in place.
How to apply
Applicants will need to use Form ‘Scale-up visa’ if applying overseas, or ‘Scale up’ if applying in country. The form itself is straightforward and similar to a Skilled Worker application form. It is worth gathering the usual data like parents’ details, travel/visa details, and employment details before filling this in.
‘Switching’ provisions enabling a change of visa type are similar to other work routes. Under paragraph SCU 1.5, you can switch from within the UK to a Scale-up route provided you are in the UK lawfully and not last granted permission as a Visitor, Short-term Student, Parent of a Child Student, Seasonal Worker, Domestic Worker in a Private Household, or outside the Immigration Rules.
Decisions take three weeks on the standard service, with some priority options available.
How much does it cost?
The fees are as follows:
- Licence fee: £536 (Temporary Worker licence application fee – there is no Government fee to add a Temporary Worker limb to the licence)
- Certificate of Sponsorship: £21 (Temporary Worker fee)
- Application fee: £715
- Immigration Health Surcharge: £624 per year
There is no Immigration Skills Charge.
And finally, settlement applications
This is a route to settlement. After five years of continuous residence in the UK, Scale-up applicants can apply for Indefinite Leave to Remain (ILR) provided they meet all the other requirements. As with other work categories, they can cross-combine time with other work routes such as Skilled Worker – for the full list, see paragraph SCU 15.2.
Crucially, to be eligible for ILR, they must be in employment and earning a gross annual salary of at least £33,000 via PAYE both at the date of application and for at least 24 months out of the three years before applying for ILR. As with an extension application, this must be PAYE employed income. Applicants cannot count self-employment income, savings, or overseas income although they can be unsponsored at the date of application.
Although this route promises significantly less red tape for sponsors, the corollary is that sponsors will find they hold less control over the workers they recruit. The requirement to remain in PAYE employment earning above a particular income for a particular period may involve more work for individual migrants. Employers should consider whether they monitor salary levels, absences, and periods of unpaid leave for any Scale-up workers they employ. Although they are not required to do so, if that worker is not eligible to extend or settle, this could lead to disruption to their work authorisation.
It remains to be seen what impact this group of workers will have on the UK labour force, whether this new route will benefit sponsors or whether workers will stay with sponsors beyond the six-month period.