Scale Up Sponsor Licence
The Scale Up Sponsor Licence is a mandatory requirement to hire workers under the Scale Up route.
We are specialists in Home Office sponsor licence applications.
Scale Up Sponsor Licence
The Scale Up route allows qualifying employers to hire skilled workers from overseas, with the sponsorship requirement limited to only the first six months of employment.
The route therefore offers enhanced flexibility to both the employer and worker compared with the fully-sponsored Skilled Worker visa.
However, the employer must have been granted a Scale Up Sponsor Licence to be able to recruit workers from overseas under this route.
The scale up route is only open to employers that can evidence sustained high growth, allowing them to to recruit overseas nationals to work in the UK in highly skilled job roles. This makes scale up sponsorship a potentially valuable immigration tool for UK businesses looking to expand even more.
The Sponsor Licence application process demands extensive supporting documentation to be collated and submitted, and the employer must meet ongoing compliance duties while sponsoring workers.
For expert guidance on recruiting and sponsoring Scale Up workers, contact our UK business immigration specialists.
The following guide answers some frequently asked questions when it comes to applying for a scale up sponsor licence, including which organisations are eligible to apply.
What is the Scale Up Sponsor Licence?
The scale up route allows businesses who are going through a sustained period of high growth to recruit overseas nationals to work for them. However, a migrant worker will only be able to apply for a scale up visa if they first have the offer of a highly skilled job role from a qualifying UK scale up sponsor.
A scale up sponsor licence is the permission granted from the Home Office for a UK-based business to recruit and sponsor a migrant worker on this route. This will allow the business to issue a worker with a valid Certificate of Sponsorship (CoS) for them to be able to apply for a scale up visa to work in the UK in their sponsored role, although the worker must have the skills to enable the business to continue to grow. This means that they must be working in a job at the required skill and salary level for a minimum period of six months.
The job role on offer must be at graduate level or above, paying at least £33,000 per annum up tp 11 April 2023, or £34,600 from 12 April 2023, or the going rate for that job, whichever is the higher. The migrant worker must also be able to meet an English language requirement, as well as a financial requirement.
Who can sponsor a scale up worker?
A scale up sponsor is an organisation classed as being in a sustained period of high growth and approved by the UK Home Office to recruit overseas nationals to work in the UK in highly skilled job roles.
When it comes to which organisations are eligible to apply for a scale up sponsor licence to recruit skilled migrant workers under this route, all applicants must meet the definition of a ‘qualifying scale up sponsor’. There are two ways that you can meet this definition:
- the standard pathway, where UKVI will automatically assess your employment growth and/or your turnover growth, based on information previously submitted to HMRC, or
- the endorsing body pathway, where a Home Office approved endorsing body will need to confirm in writing your eligibility to apply for a scale up sponsor licence.
Scale Up Sponsor Licence: General Requirements
To qualify for a scale up visa, an overseas national must have a high-skilled job offer from a qualifying scale up sponsor at the required salary level for a minimum of 6 months, as evidenced by their CoS. However, provided they meet the eligibility requirements, an overseas national can either apply from overseas or switch from another visa route from within the UK. Only those who were last granted permission as either a visitor, short-term student, parent of a child student, as a seasonal worker or as a domestic worker in a private household will need to leave the UK to apply for entry clearance from overseas.
There are various general sponsor licence requirements that must be met. To be granted a scale up sponsor licence, the UK-based business must be:
- a genuine organisation that is operating lawfully in the UK
- honest, dependable and reliable, and not engaging and has not engaged in behaviour or actions not conducive to the public good
- capable of carrying out its sponsor duties and evidencing compliance.
The honesty, dependability and reliability etc of the applicant will be assessed by looking at the history and background of the business, the key personnel named in the application and any people involved in the day-to-day running of the business. The key personnel are those people named on the licence application that will be responsible for managing any migrant workers. Some or all of these people will also have access to what is known as the Home Office sponsorship management system (SMS) after a scale up sponsor licence is granted.
To assess whether an applicant is capable of meeting its sponsor obligations, the business will need to have in place suitable human resources and recruitment practices. A pre-licence compliance check may even first be undertaken before being granted a licence.
Scale Up Sponsor Licence: Specific Requirements
In addition to the general sponsor licence requirements, to be eligible for a scale up sponsor licence, a business must be able to offer a migrant worker genuine employment that meets the minimum skill-level and salary requirements for this route ‘and’ meet the definition of a qualifying scale up sponsor. To qualify, the business must meet the following criteria:
- it must have an annualised growth of 20% or more for the previous three-year period based on either the number of people employed or turnover, and
- it must have had at least 10 employees at the start of the relevant three years.
A scale up sponsor licence application will be refused if:
- the details provided with the licence application cannot be matched to HMRC records and confirmation cannot be obtained that the business is solvent
- the business does not have at least 37 months of history with HMRC
- the business does not have at least 10 employees at the start of this 37-month period
there are gaps, ie; periods without data, within the 37-month assessment period.
If the applicant does not fall down on any of these potential hurdles, automated checks will then assess whether the business meets the specific criteria for either employment or turnover growth. If the business satisfies either check, it will pass the scale up assessment. However, it is the responsibility of the applicant to ensure that its records with HMRC are accurate, up-to-date and complete. If there are gaps, the scale up assessment is likely to fail.
Scale Up Sponsor Licence: Standard Pathway
To qualify for a scale up sponsor licence under the standard pathway, you must be able to show an annualised growth in your business of at least 20% for the 3-year period prior to your application based on either employment, ie; your staff count ‘or’ your turnover. You must also have employed a minimum of 10 staff at the start of this 3-year period.
When determining your sponsor licence application, UKVI will securely access your PAYE information and/or VAT return information submitted to HMRC, using this data to automatically assess whether or not you meet the standard pathway definition.
Scale Up Sponsor Licence: Endorsing Body Pathway
The endorsing body pathway is for prospective Scale Up employer applicants who do not meet the sponsor licence eligibility requirements, for example, if their HMRC records do not cover a sufficient period of time.
As an alternative, prospective sponsors will be able to obtain endorsement from a Home Office-approved endorsing body and can submit this with their licence application, which must be made no more than three months from the date of endorsement.
Only organisations authorised to act as endorsing bodies can provide the required endorsement. These organisations, as listed on the Home Office website, are:
- Envestors Limited
- UK Endorsing Services
- Innovator International
- The Global Entrepreneurs Programme (GEP)
To qualify for a scale up endorsement, you must:
- have an HMRC footprint of no more than 4 years
- be solvent and trading in the UK
- be registered for VAT
- have a UK-registered corporate bank account
- have a minimum of 10 employees who pay tax and National Insurance contributions via a PAYE scheme operated by you
- be able to demonstrate a potential growth rate that is consistent with the requirements of the scale up route ‘and’ be reasonably expected to meet the definition of a qualifying scale up sponsor under the standard pathway within 4 years
- have sufficient finance to offer appropriate salaries to employees working in roles that meet the skill-level of the scale up route.
You must also meet a minimum of three out of the following five criteria:
- Growth: be able to show more than 20% growth in either turnover or employment per year over a 2-year period
- Participation in a relevant government programme and/or receipt of relevant government funding: have participated in a recognised scale up programme, have received a recognised loan or grant ‘or’ have participated in the small business research initiative
- Finance: have raised at least £1 million in equity finance within a single round in the 12 month period immediately prior to the date of application to the endorsing body
- International: have global offices and/or operations ‘and’ be generating a threshold of at least 10% of turnover from exports
- Research and development expenditure: be spending 10% of your overall operating costs each year for 3 years on research and development ‘or’ 15% in one of the last 3 years.
How to apply for a Scale Up Sponsor Licence
To apply for a scale up sponsor licence, an application must be made by completing the online application form and paying the relevant application fee to UK Visas and Immigration (UKVI), the section of the Home Office responsible for the UK’s visa system.
The scale up route is classified as a ‘Temporary Worker’ route for sponsor licensing purposes, where you will pay the standard Temporary Worker fee to apply for a sponsor licence or to assign an CoS to a prospective new worker. The fee to apply for a scale up sponsor licence is £536, while the fee to assign an CoS is just £21 for each worker.
Importantly, you will have to pay an additional fee to any endorsing body if applying under the endorsing body pathway. However, there is no Immigration Skills Charge for this route.
The prospective sponsor will first need to register online by giving UKVI a name and email address. Once registered, a user ID will be displayed which can be used to log on to the licence application system, together with a password which will be sent separately by email.
A scale up sponsor licence applicant will not normally need to send any documents in support of their application, but when completing the online form, the prospective sponsor will need to provide UKVI with the following information:
- any Companies House reference number, if the business is required to be registered with Companies House, and/or its Unique Taxpayer Reference (UTR) number
- any VAT registration number
- all relevant PAYE reference numbers through which the business pays its employees.
The provision of all PAYE reference numbers, including any settled or unsponsored workers, is required for both the necessary employment growth and turnover growth assessments. These are automated checks to confirm that the business has had at least 10 employees at the start of the three-year assessment period and whether the employment count has increased by at least 20% for this three-year period. Any failure to provide all relevant PAYE reference numbers is likely to result in an application being delayed or even refused.
If the business is subject to mandatory registration or inspection by a regulatory body, so as to operate lawfully in the UK, checks will also need to be made that the business is registered. This could include, for example, nursing or care homes regulated by the Care Quality Commission, or financial businesses regulated by the Financial Conduct Authority.
In most cases, UKVI will be able to check this information online, without the need for any documentation to be sent in support of the licence application. However, in some cases, the prospective applicant will need to provide evidence of registration and inspection.
If a UK-based business already holds a valid licence to sponsor workers, an application can be made to add the scale up route to that licence. If applying to be licensed on another route at the same time, the applicant will need to submit documents relevant to that route.
How much does a Scale Up Sponsor Licence cost?
In common with other sponsored work routes, the scale up sponsor licence will be valid for a period of 4 years, unless you surrender it or it is revoked before then. However, unlike most other sponsored work routes, you cannot renew your scale up licence beyond 4 years.
If you would like to continue to sponsor overseas workers after this period, you will need to apply to be licensed on another route, for example, on the Skilled Worker route.
How long does the Scale Up Sponsor Licence last?
The scale up immigration route is classed as a ‘Temporary Worker’ route for sponsor licensing purposes. This means that a prospective sponsor will only need to pay the standard Temporary Worker fee to apply for a sponsor licence of £536 (from Nov 2022). If the business is looking for an especially quick turnaround on their application, the priority service for expedited processing of sponsor licence applications is an additional £500.
A scale up sponsor will also pay the Temporary Worker fee of just £21 to assign an CoS on this route, with no Immigration Skills Charge to pay. However, a UK sponsor may want to offer to pay the application costs of any prospective new recruit to enable them to apply for a scale up visa. The cost of applying for a visa includes a £715 application fee, a £624 annual healthcare surcharge to be able to access the NHS, as well as proof of personal savings of £1270, although the sponsor can certify maintenance here.
Scale up worker visa requirements
The scale up route allows UK businesses that meet the definition of a qualifying scale up sponsor to recruit talented individuals from overseas, although the worker must have the necessary skills needed to enable your business to continue to grow. As such, to be eligible for a scale up visa, this means that the worker must meet the following requirements:
- have a genuine job offer at the required skill-level, ie; graduate level or above
- be paid at least £34,600 per annum or the ‘going rate’ for the occupation code in question, whichever is the higher of these figures
- be expected to work for their UK sponsor for a minimum of 6 months
- speak, understand, read and write English to the required minimum standard, ie; level B1 or above on the Common European Framework of Reference (CEFR) for languages
- have sufficient funds to support themselves on arrival in the UK, ie; £1,270.
Accordingly, to successfully sponsor a scale up worker, you must be able and intend to offer employment that not only meets the skill-level and salary requirements for this route, but is genuine and, where relevant, meets the rules on third-party working. Under the ‘genuineness’ requirement, UKVI will not award points for sponsorship if it has reasonable grounds to believe that the job role does not exist, is a sham, or has been mainly created so that the migrant worker can apply for entry clearance or permission to stay.
To be granted a scale up visa, an overseas worker must accumulate a total of 70 points. This comprises 50 points for valid sponsorship in a genuine job role that meets the appropriate skill-level and salary. The remaining 20 points will be awarded for meeting the English language requirement (10 points) and the financial requirement (10 points).
Are there are restrictions with scale up sponsorship?
If you wish to sponsor a scale up worker, you must hold a valid scale up sponsor licence, satisfy yourself that the worker can meet the immigration requirements for this route and only sponsor workers in genuine employment that meets the relevant skill-level and salary requirements. Provided you can meet all of these requirements, you should be able to assign a valid sponsorship certificate to sponsor a scale up worker.
However, under the rules on third-party working, you must not assign an CoS to a migrant worker for a job role which amounts to either:
- the hire of that worker to a third party who is not the approved sponsor to fill a position with that party, either temporary or permanent, or
- contract work to undertake an ongoing routine role or to provide an ongoing routine service for a third party who is not the approved sponsor, regardless of the nature or the length of any arrangement between the sponsor and third party.
Equally, when sponsoring a scale up worker, you must ensure that you comply with the UK’s National Minimum Wage Regulations 2015 and the Working Time Regulations 1998.
What happens after 6 months of scale up sponsorship?
A sponsored scale up worker who makes a successful visa application on the scale up route will initially be granted permission to work in the UK for a period of 2 years. However, the worker will only be sponsored for the first 6 months of their permission.
After 6 months, the original employer will no longer sponsor the worker after this period, even if they continue to employ them. At this stage, the worker can continue working for their original employer without being sponsored. However, they will also have the option to change job or even employer without requiring renewed sponsorship, provided they continue to meet the relevant requirements on the scale up route.
For the original sponsor, who is likely to have invested a great deal of time and resources in applying for a scale up sponsor licence so as to recruit a migrant worker from overseas, this can prove to be an expensive exercise, so it is often in the interests of the sponsoring employer to provide an incentive for the worker to stay on. This is perhaps the biggest downside for sponsors when it comes to recruiting scale up workers.
However, on the plus side, if the worker continues to work for their original employer, the employer will be relieved of any further sponsorship duties moving forward. It is therefore only during the first 6 months that you will need to comply with your reporting duties, for example, informing UKVI if the worker is absent from work without your permission, or if there are any significant changes to the nature of their role or salary, or to your business.
What happens after 2 years of scale up sponsorship?
At the end of the 2-year visa under the scale up route, the migrant worker can opt to make an unsponsored application and be granted permission on this route for a further period of 3 years.
There is also no limit on the number of times that they can apply to extend their stay. After 5 years’ lawful continuous residence in the UK on the scale up route, or even in combination with another eligible or eligible routes, the overseas worker can then apply to settle permanently in the UK, otherwise known as indefinite leave to remain.
Sponsor Licence Compliance Duties
As a scale up sponsor licence holder, there are various sponsorship responsibilities that must be met, including informing UKVI of the date a sponsored scale up worker actually starts working for the business. This must be done as soon as possible, by logging into the Home Office SMS account and using the function referred to as ‘Report migrant activity’.
During the period for which the licence holder has sponsorship responsibility for the worker in the UK, they must also tell UKVI if that person fails to start their employment, is absent from work without permission or if there are any significant changes to the nature of their role and/or salary, or to the sponsor organisation itself. However, provided the worker’s salary continues to meet the minimum requirement for their job role, the sponsor will not need assign a new CoS and the worker will not need to make a new application for permission. In contrast, if the worker’s salary is reduced below the minimum rate required, and an exception does not apply, the sponsor will need to stop sponsoring the worker, informing UKVI of this decision via the SMS account within a period of 10 working days.
Finally, the sponsor must keep records for each scale up worker that they sponsor, usually for a minimum of one year from the date on which sponsorship ends. If the sponsor fails to meet these or any of the other sponsorship duties, UKVI may revoke the sponsor licence.
The responsibilities for each sponsored worker will begin on the date that the sponsor assigns an CoS to that worker, and will continue whilst the worker’s application for either entry clearance or permission to stay is pending. If the worker is granted permission on the scale up route, they will be granted permission for two years, although the sponsor’s responsibilities will only continue for the first six months of the worker’s permission.
The six-month period during which the licence holder will have responsibility for the migrant worker is calculated in calendar months from the ‘valid from’ date on the worker’s visa or the date that they are notified they have been granted permission to stay. For example, if a scale up worker is granted entry clearance valid from 1 December 2022, the sponsorship responsibilities for that worker will run until 11:59 pm on 1 June 2023.
At the end of the six-month period, the scale up sponsor will no longer be classed as sponsoring the migrant worker, even if they continue to work for the business. No action will be needed, where sponsorship responsibility for that worker will automatically end. The worker can continue working for their existing employer/former sponsor in either the same or different employment, or they can even change employer, without having to make a new application for permission, provided they continue to meet the route requirements.
There are, of course, some downsides to the six-month rule for scale up sponsors, where a primary concern for many employers will be how this rule could impact staff retention. Employers may be reluctant to invest time and money into recruiting a highly skilled worker to help grow their business, only for that employee to leave for a new job after six months. However, once a business has a scale up sponsor licence, this will be valid for four years, where the business will able to sponsor other scale up workers during this time.
Importantly, unlike most other sponsored work routes, a scale up sponsor licence cannot be renewed beyond four years. The route was never intended to provide a long-term solution for sponsoring migrant workers, but has been designed specifically to help UK-based businesses access a wider pool of talent during a critical stage of their growth. To continue to have the option of sponsoring migrant workers after this period, the licence holder will instead need to be licensed on another route, for example, the Skilled Worker route.
DavidsonMorris are UK business immigration specialists. Our team of experts support employers to meet their talent needs through international recruitment. We advise on sponsoring workers under the Scale Up route, and provide guidance on making Scale Up Sponsor Licence applications.
Contact us for expert advice.
Scale Up Sponsor Licence FAQs
What is the scale up sponsor licence?
The scale up sponsor licence is the approval given by UK Visas and Immigration (UKVI) to sponsor skilled overseas nationals on the scale up route. It is only once a UK employer has been authorised to sponsor scale up workers that they can issue a potential new recruit with a valid Certificate of Sponsorship (CoS) to enable them to apply for a scale up visa.
How do you become a scale-up sponsor?
To become a scale up sponsor, you will need to apply to UK Visas and Immigration (UKVI) for a scale up sponsor licence. To be granted a sponsor licence, you will need proof that your business has the necessary growth.
Does scale-up visa require sponsorship?
Any initial application under the scale up visa route will require sponsorship, although the overseas worker will only be sponsored for the first 6 months of their 2-year visa.
How many years is scale-up visa UK?
A scale-up visa will be granted for an initial period of 2 years, although the visa-holder will only be sponsored for the first 6 months of that period. After 6 months, they are free to change jobs or change employers.
Do I need sponsorship certificate to switch to scale-up visa?
If an overseas national is currently in the UK on a different visa route, they will need a valid Certificate of Sponsorship from an approved sponsor to be eligible to switch into the scale up route.
Who can sponsor a scale-up visa UK?
UK-based organisations can sponsor a scale up worker, provided they meet the criteria for a scale up business as set out under the UK’s Immigration Rules and is approved for a scale up sponsor licence on this basis.
How do I sponsor a scale-up visa?
To sponsor a scale up visa worker, you will need a scale up sponsor licence. Having been approved for a licence you can then issue a Certificate of Sponsorship to enable your prospective new recruit to apply for a visa.
What is a scale-up sponsor?
A scale-up sponsor is a licensed UK employer in a sustained period of high turnover growth and/or employment growth, with permission from the Home Office to sponsor foreign migrants to work for their business in highly skilled roles.