Scale-up Sponsor Licence Application Guidance
The Scale-up route opened on 22 August 2022. It allows for migrants with job offers at Scale-ups to apply for entry clearance / permission to stay in the UK. Unlike the Skilled Worker route, the Scale-up route offers both a ‘sponsored application’ route and an ‘unsponsored application’ route. Applicants must show, in their first application in this category, that they are being sponsored by an employer who holds a Scale-up sponsor licence.
This post will explore the requirements for employers when they apply for a sponsor licence in the Scale-up route. I explored the requirements for individual Scale-up visa applicants in my previous article which can be accessed here.
What Is a Scale up Sponsor?
A Scale-up is defined as a company which had:
- An annualised growth of at least 20% for the previous 3- year period based on either employment (your staff count) or your turnover; and
- A minimum of 10 employees at the start of the relevant 3-year period.
In assessing whether a company meets this definition, the Home Office will access and check the company’s PAYE information and / or VAT returns submitted to HMRC.
What Documents Are Required for a Scale-up Sponsor Licence Application?
All sponsor licence applicants must provide certain documents in support of their sponsor licence application. The documents required for the application will vary depending on the type of licence applied for and the sectoral focus of the company. These are set out in Appendix A.
However, Appendix A states that if a company is applying for a Scale-up sponsor licence:
“You do not need to send us any documents, unless are required to be registered with, or inspected or monitored by, a regulatory body to operate lawfully in the UK, in which case you must send any evidence or information specified for such organisations in table 2.”
Accordingly, the Home Office only requests documents regarding the business if the business is regulated. Otherwise, no further documentation is required, though if the business is also applying to be licensed in a different route, documentation in respect of that route will be required.
What Information Is Required With the Sponsor Licence Application?
While no specific documentation is required for a Scale-up sponsor licence application, the Home Office does require certain information to allow it to assess whether the business meets the requirements for holding a Scale-up sponsor licence.
The Scale-up business applying for a Scale-up sponsor licence must provide:
- At least one PAYE reference number;
- A VAT registration number; and
- A Companies House reference or UTR number.
The information provided should be enough for the Home Office to check whether the business meets the definition of a Scale-up, as above.
Whilst the definition appears relatively straightforward, calculating annualised growth can be a complex task.
A business seeking to assess whether it is a Scale-up based on employment growth must have access to complete and accurate RTI submissions for the previous 3 year period. If these records are available then a calculation must be undertaken based on the available data in the RTI submissions to ascertain whether there was annualised growth of at least 20% for the previous 3- year period based on the staff count. This may be a particularly complex process if the business has had a high staff turnover.
A business seeking to assess whether it is a Scale-up based on turnover growth must have access to all of its VAT returns for the previous 3 year period. There must be no gaps or overdue submissions during the assessment period. If records are in order, then a calculation must be undertaken based on figures provided to HMRC to ascertain whether there was annualised growth of at least 20% for the previous 3- year period based on turnover.
If you are considering applying for a Scale-up sponsor licence, our business immigration barristers can assess whether your business will qualify as a Scale-up as part of our Scale-up sponsor licence application service.
What if the Business Already Holds a Sponsor Licence?
If the business already holds a valid sponsor licence for another route, it can apply to add the Scale-up route to that licence. The business can do this via the SMS system, but the business will need to meet the requirements for a Scale-up sponsor licence.
What Are the Scale-up Sponsor Duties and How Can We Show Compliance?
To obtain a sponsor licence, companies must prove to the Home Office that they are reliable, organised and dependable, and capable of managing a sponsor licence.
Many applications are refused on the basis that a company has not demonstrated, in its sponsor licence application, that it fully understands the duties and responsibilities that come with having a licence and how they propose to manage them. More details on the sponsor licence duties can be found here.
Businesses should ensure that they fully understand the duties of sponsorship before making their application for a sponsor licence. The Home Office has the power to conduct compliance visits on an announced or unannounced basis as part of the sponsor licence application process. If the applying business cannot show that it has adequate procedures and systems in place for complying with licence duties, the application may be refused.
Whilst providing evidence of how the business proposes to comply with these duties is not strictly required by Appendix A, when applying for a sponsor licence, including a Scale-up sponsor licence, it is sensible to include evidence of how the sponsor duties will be complied with.
Can the Home Office Take a Scale-up Sponsor Licence Away?
Yes, as with all sponsor licences, the Home Office has the power to downgrade a Scale-up sponsor licence rating, suspend the licence, revoke the licence, or report the business to the police or any other relevant authority. The Home Office can do this where it considers that the business has not been adequately complying with its sponsor duties. If the Home Office does one of the above, the business should seek legal advice at the earliest opportunity.
How Long Will the Scale-up Sponsor Licence Be Valid?
As with most sponsor licences, a Scale-up sponsor licence will be held for 4 years from the date it was granted unless the licence is surrendered or revoked. Unlike most other routes, it is not possible to renew the Scale-up sponsor licence beyond 4 years. The expectation is that the business will apply for a sponsor licence in another route, e.g. the Skilled Worker route.
The Scale-up sponsor licence holder must comply with its duties for the duration of the licence.
How Much Does a Scale-up Sponsor Licence Cost?
The Scale-up route is classified as a ‘Temporary Worker’ route for sponsor licensing purposes. A business applying for a Scale-up sponsor licence will need to pay the fee for the sponsor licence application (£536 for small businesses and £1,476 for large businesses – though Scale-ups will likely be small businesses). The fee for assigning a CoS is £21 (at the time of writing).
Unlike other routes, there is no Immigration Skills Charge for the Scale-up route.
How Long Must We Sponsor a Scale-up Migrant For?
Scale-up visa applicants must initially make a sponsored application. They will need to be sponsored for at least six months. The migrants can continue to work for their employer beyond 6 months, but they are no longer ‘sponsored’ by the business.
The business’ responsibilities for the migrant continue for the first 6 months of the migrant’s permission (unless the business ceases to sponsor the migrant).
Contact our Immigration Barristers
For expert advice and assistance in relation to applying for or managing a Scale-up sponsor licence, contact our immigration barristers in London on 0203 617 9173 or via the enquiry form below.
