Let’s explore how fast-growing companies can use the UK scale-up visa sponsor licence scheme to hire the best people worldwide.
Jul 24 2023
The UK is a hub for scale-ups, with 33,445 based in the UK in 2019. When looking for talent to fuel their growth, these firms rarely limit themselves to their home market.
To retain the UK’s competitive edge, the Home Office has tailored a visa sponsorship scheme to suit these companies’ needs.
What is a Scale-up visa sponsor licence?
A Scale-up visa sponsor licence enables UK-based businesses experiencing high growth to recruit and sponsor overseas nationals. This licence allows the company to issue a worker with a valid Certificate of Sponsorship (CoS), which they can use to apply for a Scale-Up visa to work in the UK in their sponsored role.
To qualify for this visa, the worker must have been working at the required skill and salary level for at least six months.
The job role must be at the graduate level or above and pay at least £38,700 or the going rate for that job, whichever is higher. The migrant worker must also meet English language and financial requirements.
How does the Scale-up visa sponsor licence benefit businesses?
From the sponsor’s perspective, utilising the Scale-up route offers several advantages, such as the absence of an Immigration Skills Charge (ISC).
This represents a saving of £5,000 over five years compared to the Skilled Worker, Senior Worker, or Specialist Worker categories.
During processing, applications are fast-tracked, with reduced administration after the first six months.
Does your business qualify as a scale-up?
To obtain a Scale-up visa sponsor licence, an employer must show that it has grown by at least 20% in either turnover or staffing annually over the last three years and must have hired at least ten employees at the start of the period.
The Home Office will assess the employer’s PAYE data from HM Revenue & Customs (HMRC) to see if they meet the requirements. The applicant sponsor must have a minimum of 37 months’ worth of continuous history with HMRC. If you don’t meet these employment growth criteria, the Home Office will then check if you meet the turnover growth criteria. If your HMRC records have gaps, the check will probably fail.
If the check is successful, the firm can apply for a Scale-up sponsor licence and a Certificate of Sponsorship (CoS) for foreign employees who require a Scale-up visa to work.
Scale-up visa sponsor licence requirements
For a successful sponsor licence application, a business must:
- Meet the criteria of a Scale-up business
- Meet the job requirements
- Have the necessary sponsorship HR systems in place
Let’s look at each of these in turn.
Meet the criteria of a Scale-up business
There are two pathways to becoming a ‘Scale-up sponsor’: the standard pathway and the endorsed body pathway.
The standard pathway
The standard pathway requires that businesses have annualised growth of at least 20% for the three years before applying. This can be based on staff count or turnover.
Before applying, a company must have a minimum of ten employees on its payroll at the start of the three years.
The enhanced pathway
HMRC requires a minimum history of 37 months to assess your application for the standard pathway. The enhanced pathway will apply if your company still needs to meet this requirement.
Applicants must be endorsed by an approved endorsing body to apply this way. To qualify for this, your company must:
- Have at least 10 PAYE employees
- Be registered with HMRC for VAT
- Be currently solvent and trading in the UK
- Have an HMRC history of fewer than four years
- Demonstrate that you will meet the standard pathway requirements within the next four years
- Be able to pay appropriate salaries to individuals working in roles that meet the skill level for the Scale-up route
Additionally, applicants must meet three or more of the following requirements:
- More than 20% growth in turnover or employment per year over two years.
- Previous participation in a recognised scale-up programme such as Innovate UK EDGE or DCMS Creative Scale-up, receiving an Innovate UK loan or grant, or being a part of the Small Business Research Initiative.
- £1 million or more in equity finance raised in a single round in the 12 months before applying for endorsement.
- Global offices or operations, generating a minimum threshold of 10% export turnover.
- Spend 10% of your overall operating costs per year for three years on research, development, or innovation, or 15% in one of the last three years.
How to apply for a Scale-up visa sponsor licence
As part of the sponsor licence application process, you will need to complete the following steps:
- Complete and submit the sponsor licence application form online
- Pay the Scale-up sponsor licence application fee (£536 for small and charitable sponsors or £1,476 for medium or large sponsors)
- Provide the submission sheet to the UK Visas and Immigration (UKVI) (you will find this at the end of your application form)
You may need to provide additional documents and undergo a pre-licence visit to obtain a UK skilled worker visa. For an extra fee of £500, expedited processing guarantees a decision within ten working days.
Critical questions for Scale-up sponsors
How could the six-month rule impact your business?
Under the Scale-up immigration route, an employer only needs to sponsor a Scale-up worker for the first six months of their permitted two-year stay. However, this could affect staff retention as employers may hesitate to invest in highly skilled workers who could leave after six months.
Will you need to recruit overseas workers for the long term?
The Scale-up route is a temporary worker route for sponsor licensing purposes. It helps employers recruit talented individuals during a critical stage of their company’s growth. A valid sponsor license lasts four years and is not renewable beyond that period. To continue sponsoring overseas workers, you must apply for a licence on another route, like the Skilled Worker pathway.
How can I add the Scale-up route to my existing sponsor licence?
If your UK business already has a sponsor licence and wants to use the Scale-up route, you must apply to add this route to your existing licence. Our team can assist you with this process. Demonstrate that you meet the requirements for a Scale-up sponsor licence, and we’ll help you add the new route to your current licence.
For a quick breakdown of the sponsor licence process for employers, click here.
What if Scale-up visa sponsor licence application fails?
Preparing your sponsor licence application well is crucial to avoiding refusal. Refusal can result in a cooling-off period of six to twelve months.
Become a Scale-up sponsor today
We can help you apply for a Scale-up visa sponsor licence or advise on the best sponsorship routes for your business. Our expert immigration team is ready to offer comprehensive support in obtaining and maintaining a licence, including specialist assistance in securing a Scale-up sponsor licence, adding the Scale-up route to an existing licence or assembling supporting documents.
Get in touch with us today to start hiring the most talented employees and visa applicants from across the world.
