Will the Scale-up visa stand-up to the hype?

19 January 2022

As we look ahead to the immigration changes on the horizon for 2022, one big expectation is an expansion of the visa routes available to those looking to work in the UK. Such changes are very welcome given the UK’s on-going demand for top talent. Among those hotly anticipated additions, the Scale-up visa stands out. Here we look at it a little closer and consider what we might expect from this visa option.

Will the Scale-up visa stand-up to the hype?

Plans for a new Scale-up visa have been hyped up in the press as “the biggest visa improvement in a generation.” Post-Brexit ‘Global Britain’ is clawing away at any and all ways to attract the best talent to the UK and rightly so as the Department of Business, Energy and Industrial Strategy’s UK Innovation Strategy of July 2021 points out that 49% of the UK’s fastest-growing businesses have at least one foreign-born co-founder and approximately 40% of staff in UK fintechs are from overseas. 

The quicker and easier the immigration process is for UK businesses to start working with talented highly skilled people from overseas the better. The Scale-up visa route planned for launch in Spring 2022 is currently on the immigration policymakers’ workbench and being crafted into an immigration category to support fast-growth UK enterprises in recruiting the people they need most.

The Scale-up visa is one of a number of new visas on the drawing board, including the High potential individual visa (aka an MBA visa – which our recent blog explains) and the Elite visa - an unsponsored route for highly skilled workers.

What is the Scale-up visa and for what problem(s) is it a solution? Are the existing routes better than what the Scale-up visa appears to be? To answer those questions it is worth quickly reflecting on the immigration categories which already exist for a business seeking to scale-up in the UK.

Existing options for a fast-growing business

The UK’s flagship Skilled Worker category allows a UK business to offer a skilled job to an overseas worker. Since 1 December 2020 the qualifying criteria have been relaxed – with a lower job skill level, lower salary, no resident labour market test (prior advertisement to the resident population) and a suspension of the quota. The headline minimum salary requirement is normally £25,600 or the going rate for the job, whichever is higher. Depending on the job and candidate, quite often the required salary will be less than £25,600. The English language requirement must be met. After 5 years in the UK it may be possible to qualify for settlement (indefinite leave to remain).

The downside is the UK business must already be trading and apply for a Skilled Worker sponsor licence as well as contend with the raft of compliance responsibilities. The priority service isn’t always available and so applications for a sponsor licence can these days often take up to 8 weeks. Skilled Worker visas and a sponsor licence also do not come cheap – see our new Skilled Worker visas and sponsor licences: A guide for employers at question 11 for a breakdown of the cost of a Skilled Worker visa, not including the UKVI fee for the licence itself.

For those who have an endorsement confirming they meet the high-flying threshold of having exceptional talent or promise they may qualify for a Global Talent visa. If you want to start a new business you might be able to get a Start-up visa or an Innovator visa if the business idea is innovative, viable and scalable.

 

What is the Scale-up visa?

Details are thin on the ground as we await more detail which will presumably need to be published very soon before the planned Spring 2022 launch.

From a mixture of comments made in the Spring 2021 budget, the July 2021 UK Innovation Strategy, the Autumn 2021 budget and updates from the Home Office we have gleaned the following on the Scale-up visa:

  • Applicants will need to have a high-skilled job offer from an eligible business (see below for details of what an eligible business might look like). 

  • Scaleups will be able to apply through a fast-track verification process to use the route. There is a suggestion scale-ups must though meet a sponsor licence requirement, presumably with compliance duties.

  • The salary for the UK role will need to be at least £33,000.

  • Applicants will need to meet the English language requirement.

  • The route will allow successful applicants to work, switch jobs or employers. There is a suggestion that Scale-up visa holders will have to work for the sponsoring scale-up for at least 6 months and can then work outside the sponsored role.

  • Individuals will be able to extend their visa and apply for settlement, subject to meeting specific requirements. It is possible the Scale-up visa will provide a quicker route to settlement than a Skilled Worker visa, say after 3 years.

 

What is an eligible business?

The July 2021 UK Innovation Strategy included that the business must:

  • Demonstrate an annual average revenue or employment growth rate over a 3-year period greater than 20%; and

  • have a minimum of 10 employees at the start of the 3-year period.

Questions arise from whether it needs to be the last 3 years or could be any historic 3-year period and whether there is a minimum revenue threshold. If a business has 10 employees at the start of the 3-year period and only 12 at the end, presumably it would still qualify. The eligibility criteria stems from the definition of a high growth business in ONS statistics.  

Apparently it will also be explored whether scale-ups which can demonstrate an expectation of strong growth in future years may also qualify (and so wouldn’t need to meet the above criteria – which would presumably include those businesses who have been trading for less than 3 years and/or not had at least 10 employees at the start of the 3-year period).

 

How useful is the Scale-up visa likely to be?

Sponsor licence or fast-track eligibility process – you decide

It is unfair to judge the Scale-up visa option without knowing the application process. But if (as might be the case from the above eligible business criteria) it is unclear whether a business would qualify for a Scale-up visa and it is necessary to apply for a Scale-up sponsor licence, applying for a Skilled Worker sponsor licence may be a quicker and easier process. Fast-paced agile start-ups without HR teams and support services to hand may decide to go the Skilled Worker sponsor licence route instead. Anyone who ever had to evidence the employment of two settled workers for Tier 1 (Entrepreneur) applications will despair at meeting the Scale-up criteria if it is as painful as that! If on the other hand there is already a government held list of qualifying high-growth businesses perhaps it would be very light touch and an appealing process. 

Although there is the prospect of a business showing it has an expectation of strong growth in future years, some will not qualify as they haven’t been trading for 3 years and so will have to apply for a Skilled Worker sponsor licence. Where the stars are aligned and the super-talented candidate has the support of an eligible high-growth business, the business might proceed with the Scale-up visa application. But if you’re growing a business you may well need to apply for a Skilled Worker sponsor licence anyway – you’ll likely be employing EU and non-EU workers in various roles and on differing salary levels, not all of which will meet the high-skilled Scale-up requirements.

As highlighted, applying for a Skilled Worker sponsor licence can take a while to get up and running and comes with compliance responsibilities as well as high fees including the Immigration Skills Charge. However, the Home Office is about to launch its sponsorship transformation project which aims to streamline the Skilled Worker sponsor licence application process. Some improvements are due by the end of this year but the project as a whole will rumble on for a few years. It will also have a focus on SMEs – providing them with a special hotline for support to get a Skilled Worker sponsor licence – which will cover off some high-growth businesses.

Is the £33,000 salary threshold too high?

The Scale-up visa is designed for highly skilled workers and so that might partly explain why the £33,000 minimum salary level is higher than the Skilled Worker level. But it could price out some applications. When you look at the going-rate expectations for some Skilled Worker roles the Skilled Worker option may be more appealing. Some tech-focused roles on the Skilled Worker Occupation List are classed as shortage occupations and for example Programmers and software development professionals, IT business analysts, architects and systems designers and Web design and development professionals all need to be paid less than £33,000.

There are strong arguments to suggest the government should be focusing more on so-called lower skilled migration issues – see Katie Newbury’s comments quoted in Personnel Today. The Skilled Worker sponsor licence process can be tricky to navigate and in an ultra-competitive global marketplace for the brightest talent around the world the UK needs to ensure it has the visa tools to get people here as quickly and easily as possible. We only have basic details of the Scale-up visa so far and we eagerly await more details in due course.

FURTHER INFORMATION

If you have any queries on the issues raised above or any other immigration matter, please contact a member of our immigration team

ABOUT THE AUTHORs 

Tim joined the immigration team as a professional support lawyer in June 2019. He has extensive experience in corporate and private client immigration matters and is responsible for the immigration team’s knowledge management and development.

Katie is a Partner in the immigration team and has over 10 years' experience across a wide spectrum of UK immigration matters, with particular expertise in applications made under Tier 1 of the Points Based System and complex personal immigration matters.  

 

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