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Goodbye Entrepreneurs, Hello Innovators!

The last week has been somewhat turbulent for the Tier 1 categories, with a shock announcement that the Tier 1 (Investor) category was being suspended with almost immediate effect, followed by a hasty subsequent announcement, which came via the Immigration Law Practitioners’ Association (ILPA), to state that the suspension was not in fact going ahead now, but may or may not come into effect at some indeterminate future date.

At the same time, we have a statement that there will be a substantial overhaul to the Tier 1 (Entrepreneur) category, which is due to come into force in Spring 2019. So far, this statement has not been withdrawn. Yet.

In this article we will look at what the changes are likely to be and who will be affected by them.

What is Changing for Entrepreneurs?

The major take-away from the statement is that the Tier 1 (Entrepreneur) category is to be replaced by a new Innovator category.

The announcement is lacking in critical detail about how the new Innovator category might look. There is a reference in the statement that this category will sit alongside the new Start-up visa route, which was announced in June this year and about which we also do not yet know substantial details.

A feature of both the Innovator and Start-up visas is that the assessment of the business will be undertaken by a ‘business sponsor’. This will seem like a positive step for anyone who has dealt with the Home Office’s internal assessments of the genuineness of a business which are undertaken by individuals who often appear not to have any business knowledge themselves which leads to some absurd misunderstandings of businesses. However, there isn’t any information about who will actually be responsible for making this assessment, so while we can hope for a more competent assessment, we don’t yet know that this is what we will get.

A second change which seems likely, is that the name suggests that there will be more emphasis on innovative businesses. The statement says they will  assess applicants’ business ideas for their innovation, viability and scalability.’ There is no requirement for a Tier 1 (Entrepreneur) applicant to demonstrate that their business is innovative and it seems that this would be subjective test which would be difficult to implement fairly.

It is worth noting that some of the most successful Entrepreneur businesses in the UK, which have created substantial numbers of jobs and high turnovers are not necessarily innovative; they are just good. When the MAC reviewed the Entrepreneur category back in 2015, they considered the benefits of the Entrepreneur category which included the creation of employment, payment of taxes, use of UK suppliers and services, investing in established UK businesses, deepening trade relations and facilitating innovation. Innovation is clearly one factor that Entrepreneurship can bring to the UK, so it will be interesting to see how other requirements are balanced.

The statement makes no mention of investment funds, so we don’t know if the Innovator category will carry the same £200,000 requirement of the Tier 1 (Entrepreneur) route, or if this will be increased or decreased.

When will the changes to the Entrepreneur category come into force?

The statement, only refers to ‘Spring 2019’. Usually, spring changes apply to applications made after 6 April, but we will need to wait to see what the statement of changes states for an implementation date. The Start-up visa is also due at the same time. Caroline Nokes statement says ‘The formal date of implementation for this pilot will be announced in due course.’ In terms of when we will know more about the changes, she states ‘We will shortly be publishing a Statement of Intent setting out the details of how the reformed routes will work and I will place a copy in the House Library.’

It is hoped that the Statement of Intent will come with sufficient detail and sufficient notice to enable would-be applicants to make an informed decision about their applications.

What about people in the Entrepreneur category already?

Usually when a category closes, there is a period of time in which although no new applicants can enter the category, people who have already entered are able to extend their stay or apply for Indefinite Leave to Remain. For example the Tier 1 (General) route closed to New Applicants in 2011, closed to extensions in 2015 and did not close for ILR applicants until 2018. People already in the category or who had made applications to enter the category were given a period of 7 years in order to complete the required five year period necessary to obtain ILR. It is anticipated that similar provisions will be in place for the Entrepreneur route, but we will need to wait for further details to be released to know for sure.

What should people thinking about making an application do?

At the moment when we have so little information about the new category it is difficult to advise which route will be ultimately better for Applicants. Anyone who is able to meet the Entrepreneur requirements and who is keen to enter this category specifically, the best advice is to prepare your application as soon as possible to ensure that you can make the application before the category closes. Entrepreneurs are reminded that it can take some time to prepare the application as you will be reliant on third parties to get documents that are needed and therefore this is not an application which can be left to the last minute.

Contact Our Entrepreneur and Innovator Immigration Lawyers In London

For further advice or for assistance with any aspect of preparing a Tier 1 (Entrepreneur) application or challenging a refusal of a Tier 1 (Entrepreneur) application, call our immigration barristers on 0203 617 9173 or complete our enquiry form below.


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