The Gateway to Global Talent: Maximising Business Growth with the UK Scale-Up Sponsor Licence

The UK Scale-up Sponsor Licence offers several advantages for employers, as it helps them in high-growth stages and facilitates the hiring of skilled international workers:

• No Immigration Skills Charge (ISC): Sponsors can save up to £5,000 over a five-year period compared to sponsoring Skilled Workers or Senior or Specialist Workers.
• Fast-tracked Application Processing: The scale-up route offers expedited processing of applications, enabling quicker onboarding of essential talent.
• Short-term Compliance Duties: Compliance duties with the Home Office sponsorship licence last only for the first six months, reducing long-term administrative burdens​​​​.
• Attracting Global Talent: The scale-up sponsor licence allows companies to attract top global talent by offering the prospect of transitioning to an unsponsored work route after an initial six-month period​​.

The UK Scale-up Sponsor Licence is valid for four years from the date the Home Office issues the document. Unlike other sponsorship licences, the UK scale-up route does not offer the possibility for renewal after this period. Instead of renewing the scale-up sponsor licence, companies are encouraged to apply for other sponsorship routes, like the Skilled Worker route. That is a suitable option if employers wish to continue sponsoring international talent beyond the four-year mark of the scale-up licence. The scale-up route facilitates temporary rather than long-term sponsorship opportunities for businesses in growth phases​​​​.

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• Business Legitimacy: The sponsoring business must be operating legally within the UK, demonstrating honesty, reliability, and the ability to fulfil sponsorship duties.
• Job Offer Requirement: The potential international employee must receive a high-skilled job offer from a recognized scale-up sponsor, meeting the minimum salary for a duration of at least six months, as shown in their Certificate of Sponsorship (CoS).
• Eligibility for Application: Applicants can apply from outside the UK or switch from another visa route within the UK, with specific categories required to apply from abroad.
• Compliance and Integrity Assessment: The application assesses the business's history and the integrity of key personnel involved in the management of sponsored employees, including those with access to the Home Office's SMS.

Details on key personnel

In applying for a UK sponsor licence, businesses assign roles to staff who'll manage the sponsorship via the Sponsorship Management System (SMS). These roles, known as Key Personnel, include:

• Authorising Officer: The main person responsible for the sponsorship.
• Key Contact: Acts as the liaison with the Home Office.
• Level 1 User: Has full access to the SMS for daily tasks.
• Level 2 User: Has limited access for specific duties.

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Only Level 1 and Level 2 Users can access the SMS directly. If an Authorising Officer or Key Contact needs SMS access, they must also be assigned as a Level 1 or Level 2 User.

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Key rules for these roles are:

• Location: They need to be UK-based, except under specific circumstances like for the UK Expansion Worker route.
• Background: They should have no unspent criminal convictions.

Employment: They must be directly employed or hold an office within the company. Exceptions allow for some roles to be filled by third-party HR staff or agency workers, but there must be at least one direct employee as a Level 1 User.

• Genuine Employment: The role offered must meet the skill and salary requirements for the Scale-up route.
• HMRC history of fewer than 4 years

Qualifying Criteria for Scale-up Businesses:

• Must show an annual growth of 20% or more in employment or turnover for the three-year period prior to applying.
• Should have at least 10 employees at the start of the assessment period.

Two pathways to qualify as a ‘Scale-up sponsor’

To become a recognized Scale-up sponsor, businesses can choose between two paths:

Standard Pathway:

• Growth: Show at least 20% annual growth in staff counts or turnover over three years.
• Employee Minimum: Start with at least 10 employees at the beginning of this period.
• Documentation: Provide PAYE numbers, VAT registration, and Companies House or UTR number to verify your business status with HMRC.

Endorsing Body Pathway:

To qualify for an endorsing body pathway, the business must follow these guidelines:

For Newer Businesses: If you lack extensive HMRC records, get an endorsement from an approved body.

Requirements:

• At least 10 employees are paid through PAYE.
• VAT registration.
• Operational and solvent in the UK.
• A corporate bank account in the UK.

Meet Three of the Additional Criteria:

• Showing an annual growth of 20% or more in employment or turnover for the three-year period prior to applying.
• Having at least 10 employees at the start of the assessment period.
• Engaging with established scale-up programs or receiving funding from initiatives like Innovate UK EDGE, DCMS Creative Scale-up, or the Small Business Research Initiative.
• Securing £1 million or more in a single equity finance round within the 12 months prior to applying.
• Operating internationally with at least 10% of turnover generated from overseas sales.
• Allocating a significant portion of your budget to research and development, with either 10% of total operating costs annually over three years or 15% in any one of the last three years.

Application process for scale-up sponsor licence

To apply for a Scale-up sponsor licence, follow these steps:

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1. Fill out and submit the online application for a sponsor licence.
2. Pay the application fee: The cost is £536 for small businesses and charities, and £1,476 for medium to large businesses- Scale-ups are likely small businesses
3. Complete and send the submission sheet to UK Visas and Immigration (UKVI), which you'll find at the end of your application.
4. Provide any additional documents requested by UKVI.

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After submitting your application, UKVI may conduct a pre-licence visit to ensure you can fulfil your sponsor duties. Typically, applications are reviewed within 8 weeks, but you can opt for a faster decision within 10 working days by paying an additional £500.

What if the business already has a sponsor licence

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If a business already has a valid sponsor licence for a different category, it can apply to include the Scale-up route in its existing licence. This addition can be made using the Sponsorship Management System (SMS). However, the business must fulfil all the specific requirements set for the Scale-up sponsor licence to successfully add this route.

Scale-up sponsor duties and compliance

The scale-up sponsor licence holders have responsibilities and duties, divided into several areas:

Reporting Obligations:

• Report specific events or information using the Sponsorship Management System (SMS) within set deadlines.

Record-Keeping:

• Maintain essential documents for each sponsored worker.

Adhering to Immigration and Other UK Laws:

• Follow all UK immigration laws and the guidelines in the Worker and Temporary Worker sponsorship guidance.
• Comply with broader UK laws beyond just immigration.

Public Good Conduct:

• Avoid actions or behaviour that negatively impact the public good.

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Tech Nomads tips for effective compliance:

Understand the Duration of Duties:

• Responsibility for each worker begins when you assign a Certificate of Sponsorship and ends under specific conditions, like the worker leaving the UK.

Stay Informed About Reporting Duties:

• Use the SMS to report various changes within 10 or 20 working days, depending on the event.

Be Diligent in Record Keeping:

• Keep records for each worker as specified in Appendix D and maintain documents provided during your sponsor licence application. Ensure up-to-date contact details for each worker and proper Right to Work checks.

Comply with Immigration Rules and UK Law:

• Employ only qualified workers, maintain necessary documentation, monitor immigration status, and adhere to UK employment law including the national minimum wage.

Prepare for Compliance Visits:

• Be ready for Home Office visits before and after licence approval. Keep all required files accessible and cooperate with Home Office staff.

Understand Non-Compliance Consequences:

• Non-compliance can lead to downgrading, suspension, or revocation of the licence.

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For scale-up sponsors, their responsibilities for each worker last for six months from the start date on the worker’s visa. This includes reporting any significant changes in the worker's role or the organisation. After six months, the sponsor's responsibility ends, but the worker can continue to work for them or change jobs without needing a new visa application, as long as they meet the route requirements.

Can a business lose sponsor licence

Yes. In fact, a business can lose a scale-up sponsor licence very easily due to failing to follow duties and compliance.

The Home Office holds the authority to take significant actions if a business fails to comply with its sponsorship responsibilities. These actions can include downgrading the licence's rating, suspending or revoking the licence, or even referring the business to the police or relevant authorities. This step is considered if the Home Office believes the business is not meeting its sponsorship duties adequately.

Scale-up sponsor licence refusals

A Scale-up sponsor licence application may be rejected for several reasons:

• Mismatch with HMRC Records: If the information in the application doesn't align with HMRC records or if the business's financial solvency can't be confirmed.
• Insufficient HMRC History: The business must have a history with HMRC of at least 37 months.
• Employee Count Requirement: At the beginning of the 37-month period, the business should have a minimum of 10 employees.
• Data Gaps: If there are any periods within the 37-month assessment window where data is missing or incomplete.

If the application doesn't encounter these issues, automated assessments will then verify if the business meets the necessary criteria for growth in employment or turnover. Success in this assessment depends on the business having complete, accurate, and up-to-date HMRC records. Any gaps in these records could result in the failure of the Scale-up assessment.

How Tech Nomads Can Help

Seeking assistance in your UK scale-up sponsor licence application?

Tech Nomads is ready to assist you in sponsor licence application and further renewal processes.

To explore your options of hiring foreign employees, you may:

• Book a FREE 30-minute consultation with a Tech Nomads Global Mobility Expert;
• Read guides and articles on the Tech Nomads Blog.

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