What is the purpose of the Scale-up scheme, and do we still need it?
The UK’s Scale-up Visa, launched in 2022, aims to attract talent to fast-growing businesses by offering a two or three year visa’s to those in qualifying roles who meet specific requirements including the minimum salary threshold, English language and financial requirements. After five years, it would open a pathway to settlement.
The recent announcement about the increase in the minimum salary threshold for a Skilled Worker visa raises questions about the need for potential adjustments to the Scale-up scheme and its continued advantage for individuals and businesses. This article introduces the Scale-up visa scheme and explores its future.
What is Scale-up scheme?
This visa route offers two visa options: a sponsored and an unsponsored. The sponsored visa is available for up to two years, while the unsponsored visa can last up to three years. Applicants must apply for a sponsored visa, which is the starting point for this program.
To qualify for the Scale-up visa, individuals must obtain a valid Certificate of Sponsorship from an approved, UK-based Scale-up sponsor for a role that meets the required skill level with a minimum annual salary of £34,600. In addition, applicants must prove their English proficiency to at least the CEFR Level B1 (equivalent to IELTS 4.0) and meet the financial requirement. After six months of employment for the sponsor, Scale-up visa holders can switch to a different employer without needing another sponsorship or having to notify the Home Office.
The unsponsored scale-up visa route requirements are identical to the initial sponsored visa. Still, the only difference is that the applicant must have completed a minimum six-month period with their sponsored employer, provided they continue to earn a minimum yearly salary of £34,600 or £33,000 for those whose Certificate of Sponsorship was issued before 11 April 2023. This setup offers a straightforward and adaptable path for skilled individuals pursuing work opportunities in the UK.
Partners and children can accompany the applicant on the visa by meeting specific criteria such as the relationship, age, and financial requirements. This flexibility benefit is advantageous for employees relocating with their families. The visa scheme’s primary advantage is keeping families together, allowing dependent partners to work except as professional sportspersons and there is no specific minimum salary threshold for them to fulfil. When lead applicants switch or extend their visa, their partner or their child’s status remains unchanged. However, the partner or child must apply for an extension or visa switch simultaneously with or before the lead applicant’s visa expiration.
Those aiming to settle must accumulate a continuous five-year period in the UK, adhering to the pathway toward indefinite leave to remain. During this period, they must fulfil the earnings requirement to be eligible for settlement.
A Scale-up Sponsorship License and the burdens
To be eligible to become a Scale-up sponsor, a company can apply through either of the two available pathways: standard or endorsement. To qualify under the standard path, the employer must have grown by an average of 20% over three years in either employment or total sales and have at least ten employees at the start of the three-year period. The endorsing pathway is for companies with an HMRC history of fewer than three years that cannot provide the evidence required in the standard path. To qualify, the company must pay an additional fee to obtain an endorsement from the Home Office-approved endorsing body, which must be obtained within three months from the date of application. There are seven requirements to be satisfied, including demonstrating the potential growth rate required for the Scale-up standard and being expected to meet the definition of a Scale-up in the next four years. In addition to these seven mandatory requirements, employers must also satisfy at least three out of five additional requirements to receive the Sponsorship License.
Does the scheme work so far?
Despite the seemingly straightforward way of obtaining the Sponsorship License, the Scale-up visa scheme presents significant challenges to businesses, including the financial and administrative burden, compounded by the need for more assurance that employees will remain in their posts beyond the initial six-month period. Given that this scheme’s principal benefit is attracting highly skilled workers, as of 22nd February 2024 there were only 52 out of over 103,000 Sponsors who were successfully licensed under the Scale-up Scheme since its launch in 2022. This raises the most obvious concern over the attractiveness of this visa route. Or, perhaps, this visa route has been overlooked?
Those businesses that are aware of this sponsorship option undoubtedly will weigh up whether it is worth investing their time and resources, especially when there are other ways to hire a foreign workforce. Another important aspect is that unlike other sponsored work routes, the Scale-up License cannot be renewed beyond the initial four-year period. This aspect further underscores the potential limitations of the Scale-up scheme as a long-term solution for businesses aiming to attract and retain skilled talent. This situation prompts a broader reflection on the necessity of this scheme.
Do we need a Scale-up scheme?
Since its introduction, the Scale-up visa scheme has received minimal attention. According to Sponsored work visas by occupation and industry data, from Q1 to Q3 2023, there were 237,284 applicants for sponsored worker visas. However, only 26 applied for the Scale-up visa, with 20 receiving approvals. In comparison, 174,646 applied for the skilled worker visa and 163,386 were granted.
Before the Home Office introduced the increase in the minimum salary threshold, the Skilled Worker visa route was more appealing due to the lower salary requirement than the Scale-up visa. With the increase, the salary requirement for both visa routes are similar, potentially enhancing the Scale-up visa’s appeal due to its added flexibility. However, the future of the Scale-up visa remains to be determined, depending on whether the Home Office decides to revise the threshold further. If the Home Office opts for another increase, it could significantly impact the scheme’s demand, casting doubt on the advantages the Scale-up visa offers to attract more applicants, especially considering the already low figures for individual and business applications.
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