How to get a UK Scale-up Visa sponsor license
Jul 24, 2023
Although the current number of scale-up businesses may have dropped due to adverse trading conditions from the pandemic and current global economic crisis – there were 33,445 scale-up businesses in the UK in 2019 – there is a significant pool of eligible employers that may choose to become a Scale-up sponsor.
What is a Scale-up Sponsor Licence?
A scale-up sponsor licence is a permission granted from the Home Office for a UK-based business going through a sustained period of high growth to recruit and sponsor overseas nationals to work for them.
This will allow the business to issue a worker with a valid Certificate of Sponsorship CoS for them to be able to apply for a scale-up visa to work in the UK in their sponsored role. This means that they must be working in a job at the required skill and salary level for a minimum period of six months.
The job role on offer must be at the graduate level or above, paying at least £33,000 per annum up to 11 April 2023, or £34,600 from 12 April 2023, or the going rate for that job, whichever is the higher. The migrant worker must also be able to meet an English language requirement, as well as a financial requirement.
For a quick breakdown of the scale-up visa process for overseas workers click here.
Further details of the Scale-up sponsorship process and criteria are made available below. Keep reading:
Advantages of the Scale-up route for sponsors
Some advantages of using the Scale-up route from the sponsor’s perspective include that there is:
- No Immigration Skills Charge (ISC), which represents a saving of £5,000 over a five-year period in comparison to Skilled Workers or Senior or Specialist Workers;
- Fast-tracked processing of applications; and
- Reduced migrant administration after the first six months.
Does your business qualify as Scale-up?
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 HM Revenue & Customs (HMRC) to determine if they meet these requirements. Applicant 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.
If the check is successful, then your firm will be able to apply for a Scale-up sponsor licence and the valid Certificate of Sponsorship CoS that a foreign employee on a Scale-up visa would need to work with.
Scale up 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
Meet the criteria of a Scale-up business
As the Home Office’s guidance explains, there are two pathways to qualify as a ‘Scale-up sponsor’; the standard pathway and the endorsed body pathway.
The standard pathway
The standard pathway requires that businesses applying for a Scale-up sponsor licence:
- Have annualised growth of at least 20% for the 3-year period before applying – this can be based on staff count or turnover.
- Have had a minimum of 10 employees at the start of the 3-year period before applying.
The enhanced pathway
The enhanced pathway is offered as an alternative to the standard pathway and is used if HMRC does not yet have enough history (at least 37 months is needed) on which to assess your application. Using this pathway, Scale-up sponsor licence applicants must be endorsed by an approved endorsing body. For the enhanced pathway endorsement, a qualifying scale-up sponsor will need to demonstrate that their business meets the following requirements:
- 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 4 years
- meet the criteria of a Scale-up business
- demonstrate that you will meet the standard pathway requirements within the next 4 years, and
- be able to pay appropriate salaries to individuals working in roles that meet the skill level for the Scale-up route
In addition, you must meet 3 or more of the following requirements:
- Growth – have more than 20% growth in turnover or employment per year over 2 years.
- Participation in a relevant Government programme or receipt of relevant Government funding – have participated in a recognised scale-up programme, such as Innovate UK EDGE or DCMS Creative Scale-up, received an Innovate UK loan or grant, or participated in the Small Business Research Initiative.
- Finance – have raised £1 million or more in equity finance in a single round in the 12 months before applying for endorsement.
- International presence – have global offices or operations and generate a minimum threshold of 10% of turnover from exports.
- Research and development – have research, development or innovation expenditure of:
- 10% of your overall operating costs per year for 3 years, or
- 15% in one of the last 3 years
How to apply for a Scale-up 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)
Submit any documents requested by UKVI Once you have completed the above steps, you may receive a pre-licence visit from a UKVI compliance officer to check you can meet your sponsor licence obligations. Most applications are processed within 8 weeks. However, if you require a faster decision, you can pay an extra fee of £500 for a decision within 10 working days.
Employing a Scale-up worker? Key considerations for Sponsors.
How could the 6-month rule impact your business?
A key benefit that comes with the Scale-up immigration route is that a Scale-up worker only requires sponsorship from an employer for the first 6 months of their permission. A primary concern for many employers will be how this rule could impact staff retention. Employers may be reluctant to invest time and money into recruiting a highly skilled worker to help grow their business only for that employee to leave for a new job after 6 months.
Will your business need to recruit workers from overseas long-term?
The Scale-up route is classified as a ‘Temporary Worker’ route for sponsor licencing purposes. This means that the Home Office does not intend the route to be used as a long-term solution for sponsoring overseas workers and it has been designed specifically to help employers recruit talented individuals during a critical stage of their company’s growth.
A valid sponsor licence lasts for 4 years unless you give it up or it is revoked before then. Unlike most other sponsored work routes, you cannot renew your Scale-up licence beyond 4 years. If you wish to continue to have the option of sponsoring overseas workers after this period, you must apply to be licensed on another route (for example, the Skilled Worker route)
How can I add the Scale-up route to my existing sponsor licence?
If your UK business already holds a sponsor licence and you wish to make use of the Scale-up route, you will need to apply to add a route to your licence. For example, you may hold a sponsor licence where you are licenced to sponsor Skilled Workers. You would need to apply to add the Temporary Worker Scale-up route to your existing licence. You will need to show that you meet the requirements for a Scale-up sponsor licence. Our team specialise in adding new routes to existing sponsor licences and can advise you on this process.
For a quick breakdown of the sponsor licence process for employers click here.
What if my application for a Scale-up sponsor licence is refused?
It is important to ensure that a sponsor licence application is well-prepared to avoid the risk of refusal. Refusal can have significant adverse consequences such as a 6-12 month cooling off period, during which any further applications will be refused. Our team prepare applications to such a standard that we have not received a refusal on an application we have made. Our immigration experts are skilled in advising on refusals where organisations have submitted applications without representation. We would review your refusal decision and advise on the best course of action going forwards.
Become a Scale-up Sponsor today
If you have carefully considered the above points and wish to proceed with applying for a Scale-up sponsor licence, or if you require more advice on the best sponsorship routes for your business, we can help.
Our immigration team are renowned for their experience in sponsor licences and provides comprehensive support with all aspects of obtaining and maintaining a licence. We provide expert support in securing a Scale-up sponsor licence or adding the Scale-up route to an existing licence.
Start hiring talented individuals under the scale-up route to boost your business by becoming a sponsor licence holder today. If you have any questions, please feel free to contact us at hello@centuroglobal.com
