Costs of UK’s new ‘scale-up’ visa to employers might outweigh benefits

Out-Law News | 23 Aug 2022 | 12:53 pm | 1 min. read

The UK’s new ‘scale-up’ visa for international workers does not offer a strong enough incentive to the employers required to sponsor them, according to one legal expert.

The new regime, which opened for applications this week, is intended to allow fast-growing employers to attract top international talent through a light-touch sponsorship route to a UK work visa. Scale-up visas require international workers to be sponsored for an initial six-month period, after which they can continue working for their sponsor, change jobs or become self-employed without notifying the Home Office.

But Maria Gravelle of Pinsent Masons warned that, while the visa’s added flexibility would appeal to many workers, it was “hard to find an incentive for the company who needs to sponsor them in the first place”. According to the Home Office, businesses that do not hold a UK Visas and Immigration (UKVI) sponsor licence must apply for one, while existing sponsors will need to add the scale-up route to their current licence.

Maria Gravelle

Pinsent Masons

For most businesses, the cost of potentially losing a talented employee after only six months on the job will far outweigh the saving on the Immigration Skills Charge.

In all cases, the sponsor’s HMRC records must show that it meets the definition of a ‘scale-up business’ by increasing its staff count or turnover by 20% in the last three years; and had at least 10 employees at the start of the three-year assessment period. The cost of a scale-up visa application is £715 and is exempt from the Immigration Skills Charge, making it cheaper than a ‘skilled worker’ visa.

Gravelle said: “The assessment will examine sponsors’ VAT and PAYE records, which must span a 37-month period before the application date, be free of gaps or late-entries and be up-to-date. These criteria could be an administrative headache for some employers and rules out most new start-ups and small businesses due to the 10-employee minimum rule.”

“What’s more, the route will only suit a very small number of vacancies. Not all roles on the skilled occupations list are eligible for the scale-up visa. The minimum salary is also higher than for skilled workers, being the higher of £33,000 per annum, £10.10 per hour or the going rate for the occupation code. English language requirements still apply,” Gravelle added.

“The flexibility of the scale-up route will be supremely helpful for future employers of a scale-up worker – but not for the initial sponsor. While scale-up workers will be granted permission valid for two years initially, sponsorship will end after six months and they will be free to seek employment elsewhere without impacting the terms of their visa,” Gravelle said.

She added: “For most businesses, the cost of potentially losing a talented employee after only six months on the job will far outweigh the saving on the Immigration Skills Charge. The additional hoops employers have to jump through on this route raises the question of whether the scale-up visa is worth pursuing over existing routes like the skilled worker visa. In most cases the answer will simply be no.”

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