The Scale-up route enables eligible high-growth UK businesses to recruit skilled overseas workers while allowing those workers to develop their careers in the UK. A business must first obtain a Scale-up sponsor licence before assigning a Certificate of Sponsorship (CoS) for an eligible role. The worker can then use that CoS to apply for a Scale-up Worker visa.

A defining feature of this route is its flexibility: although the initial visa is granted for two years, sponsorship is required only for the first six months. After that period, the worker can change employers without obtaining further sponsorship and may subsequently qualify for an extension or settlement, provided they meet the relevant requirements. However, it is important to distinguish between the requirements for the business’s sponsor licence, the worker’s initial visa application, and any subsequent application for permission to stay or settlement.

What Is a Scale-up Sponsor Licence?

A Scale-up sponsor licence is permission granted by the Home Office allowing an eligible high-growth business to sponsor overseas workers in skilled roles. It enables the business to recruit talent to support its continued growth. An intention to employ overseas workers is not, in itself, sufficient: the business must satisfy the specific eligibility requirements for the Scale-up route, as well as the general requirements applicable to sponsors.

The sponsor licence and the worker’s visa are separate permissions. The licence authorises the business to act as a sponsor, whereas a Scale-up Worker visa gives an individual permission to enter or remain in the UK and work subject to the conditions of that permission. Obtaining a sponsor licence does not guarantee that a worker’s visa application will be successful. Each applicant must independently meet the relevant requirements, including those relating to the role, salary, English language ability and maintenance.

Can Any UK Business Apply for a Scale-up Sponsor Licence?

Not every UK business qualifies for a Scale-up sponsor licence. Under the Standard Pathway, a business must demonstrate annualised growth of at least 20% in either turnover or employee numbers over the three-year assessment period preceding its application. It must also have had at least 10 employees at the beginning of that period. Growth in both turnover and employee numbers is not required, but the minimum initial employee requirement applies whichever measure of growth the business relies on. The Home Office assesses eligibility using Pay As You Earn (PAYE) and Value Added Tax (VAT) information submitted to HM Revenue & Customs (HMRC).

A business that does not have a sufficiently long HMRC history to qualify under the Standard Pathway may be able to use the Endorsing Body Pathway. This requires endorsement from an approved endorsing body. It is not, however, a general exemption for newly established businesses. Applicants must meet requirements concerning employee numbers, VAT registration, financial standing, growth potential and additional assessment criteria. Incorporation or investment alone does not establish eligibility.

Is the Scale-up Route Better Than the Skilled Worker Route?

The Scale-up route is not necessarily more advantageous than the Skilled Worker route in every case. For workers, a significant benefit is the ability to change employers after the initial six-month period without obtaining a new CoS or making an application to update their visa. By contrast, a Skilled Worker changing employers will generally need a new CoS and must apply to update their immigration permission. For employers, the Scale-up route does not attract the Immigration Skills Charge, and sponsorship responsibility for an individual worker ends after the initial six months.

These advantages must be balanced against the route’s limitations. Businesses must meet specific growth requirements, the licence cannot be renewed beyond its four-year validity period, and workers have greater freedom to move to another employer. The current general salary threshold for the Scale-up route is £39,100 per year, compared with the standard general threshold of £41,700 for the Skilled Worker route. However, both routes also apply occupation-specific going rates, and the Skilled Worker route includes provisions allowing lower salaries in certain circumstances. The lower general threshold does not therefore mean that the Scale-up route will always be more suitable. The business’s growth history, proposed role, retention strategy and the worker’s long-term immigration objectives should all be considered.

What Are the Main Requirements for a Scale-up Sponsor Licence?

In addition to meeting the route-specific growth requirements, a business must satisfy the general eligibility and suitability requirements for sponsors. It must be solvent and able and willing to offer genuine, eligible employment at the required salary level. The proposed employment must comply with relevant legislation, including minimum wage and working time requirements, and must not be a role created primarily to facilitate an immigration application. The business must also appoint suitable key personnel and have arrangements in place to comply with its record-keeping and reporting duties.

Under the Standard Pathway, the business must meet the three-year growth and initial employee requirements described above. Under the Endorsing Body Pathway, it must have at least 10 employees whose income tax and National Insurance contributions are processed through its own PAYE scheme. It must also be VAT-registered, trading in the UK, solvent, have an HMRC history of less than four years, hold a UK-registered corporate bank account, and have sufficient funds to pay the required salaries. There must be a reasonable expectation that the business will meet the Standard Pathway definition of a high-growth business within the next four years.

Businesses applying through the Endorsing Body Pathway must also meet at least three of five additional assessment criteria. These concern growth in turnover or employment over two years, participation in specified government programmes or receipt of relevant funding, raising at least £1 million in equity investment in a single funding round within the preceding 12 months, international operations and export activity, and expenditure on research, development or innovation. Each criterion has detailed conditions, which should be assessed before an endorsement application is submitted.

How Do You Apply for a Scale-up Sponsor Licence?

The business should first determine whether it qualifies under the Standard Pathway or the Endorsing Body Pathway. It must then complete the online sponsor licence application and pay the applicable fee. Under the Standard Pathway, the business must provide its Companies House registration number or Unique Taxpayer Reference, as appropriate, together with its VAT registration number and all relevant PAYE reference numbers. A business that already holds a sponsor licence can apply to add the Scale-up route to its existing licence.

Under the Endorsing Body Pathway, the business must obtain an endorsement from an approved endorsing body before applying for the licence. It must include the valid endorsement reference number in its application and apply within three months of the endorsement being issued. If it misses that deadline, it will need a new endorsement. Although separate supporting documents are not normally required for a Scale-up-only application, documents may be required where the business operates in a regulated sector or applies for another sponsorship route at the same time. The absence of a routine document submission requirement should not be mistaken for an absence of scrutiny or a need for preparation.

Once the licence has been granted, the business can assign a CoS to an eligible worker and must comply with the relevant sponsorship duties, including reporting the worker’s actual employment start date. The business is responsible for the sponsor licence fee, CoS fee and associated administrative costs. Passing these costs on to a sponsored worker, or attempting to recover them from the worker, may result in the licence being revoked.

Can Anyone Apply for a Scale-up Worker Visa?

A person cannot qualify for a Scale-up Worker visa simply because they are highly skilled or hold a degree. An initial applicant must be aged 18 or over and hold a valid CoS assigned by an eligible Scale-up sponsor with an A-rating. The CoS must confirm the eligible role, salary, relevant PAYE information and an offer of employment for at least the initial six months. The applicant must also genuinely intend, and be able, to undertake the sponsored role.

The current English language requirement for new applicants is generally level B2 of the Common European Framework of Reference for Languages (CEFR) in reading, writing, speaking and listening. Applicants must also normally demonstrate that they have held at least £1,270 for a consecutive 28-day period. Separate evidence of maintenance may not be required where an eligible sponsor certifies maintenance on the CoS or where the applicant has been lawfully in the UK for at least 12 months at the date of an in-country application.

Applicants must also consider whether they are permitted to switch into the route from within the UK. Switching is not permitted from certain immigration categories, including the Visitor route. Student visa holders are subject to additional conditions concerning completion of their course or the employment start date stated on the CoS. Eligible partners and children may apply as dependants, but they must meet the applicable relationship, financial and other requirements.

What Are the Salary and Skill-Level Requirements?

For a new sponsored application, the salary must meet both the general threshold of £39,100 per year and the going rate for the relevant Standard Occupational Classification 2020 (SOC 2020) occupation code. In practice, the worker must be paid at least the higher of these two amounts. Salary generally means guaranteed gross basic pay. Bonuses, overtime payments, accommodation, shares and other benefits cannot be added to basic pay to meet the threshold. The occupation-specific going rate is adjusted for working hours in accordance with the relevant rules, so the employer must assess both the annual salary and the contracted weekly hours.

The job must fall within an eligible SOC 2020 occupation code, equivalent to graduate-level work. This describes the level of the role rather than imposing a requirement that the worker must hold a university degree. Selecting an occupation code that does not accurately reflect the duties of the role, whether to meet the eligibility requirements or reduce the applicable salary, can lead to a visa refusal and compliance action against the sponsor.

How Long Does a Scale-up Sponsor Licence Last?

A Scale-up sponsor licence is valid for four years unless it is surrendered or revoked earlier. A business can obtain a licence under this route only once, and it cannot renew the licence after the four-year period. A business that surrenders its licence or has it revoked during that period cannot apply for a new Scale-up licence. Employers planning to recruit overseas workers over the longer term should therefore consider other sponsorship routes, including Skilled Worker.

The four-year validity of the employer’s licence is separate from the worker’s period of immigration permission. An initial sponsored application results in a grant of permission for two years. Subsequent qualifying unsponsored applications can result in extensions of three years at a time. The expiry of the employer’s licence does not, in itself, mean that an existing worker’s immigration permission automatically expires on the same date.

Can a Scale-up Worker Change Employers?

During the initial six-month period, a Scale-up Worker must normally work in the role specified on their CoS. If they wish to change their employer, sponsor or occupation code during that period, they must obtain a new CoS and make a further sponsored application. The route therefore does not provide unrestricted freedom to change employment from the outset. The six-month period is calculated from the date on which entry clearance becomes valid or the date on which the worker is notified of a grant of permission to stay, rather than simply from their first day at work.

After the initial six months, the worker may remain with the same employer or move to another employer without obtaining further sponsorship or applying to update their visa. Self-employment is also permitted, but work as a professional sportsperson, including as a sports coach, is prohibited. It is particularly important to distinguish between permission to undertake self-employment and the ability to rely on self-employed income for an extension or settlement application. The relevant earnings requirements are based on qualifying UK PAYE employment income; self-employed income does not count.

Can the Scale-up Route Lead to Settlement?

The Scale-up route currently provides a pathway to settlement, also known as indefinite leave to remain (ILR). Applicants must normally complete a qualifying period of five years in the UK. Time spent as a Scale-up Worker can be combined with time spent as the main applicant in certain other eligible routes, including Skilled Worker and Global Talent. However, not all immigration categories count towards this period. Applicants must also meet the continuous residence requirements, including the applicable limits on absences, and pass the Life in the UK Test unless exempt.

The earnings requirements are an important part of a settlement application. Under the general provisions applicable to new entrants, the applicant must be employed in the UK on the date of application with an annual PAYE salary of at least £39,100. They must also have earned monthly PAYE income equivalent to that annual salary level during at least 24 months of the three years immediately preceding the application. Lower thresholds may apply under transitional provisions linked to the date on which an earlier CoS was assigned. For settlement applications made on or after 26 March 2027, applicants must also meet a CEFR B2 English language requirement in speaking and listening unless exempt.

Earnings must also be considered before the settlement stage. A worker applying to extend their initial two-year permission must normally demonstrate qualifying monthly PAYE earnings for at least half of that period, usually 12 months. The end of sponsorship after six months does not therefore remove the need to maintain sufficient qualifying employment income if the worker intends to extend their stay or apply for settlement.

When Can a Scale-up Sponsor Licence Application Be Refused?

A Scale-up sponsor licence application may be refused if the business does not meet the definition of an eligible high-growth business or fails to satisfy the general eligibility and suitability requirements. Under the Standard Pathway, omitting relevant PAYE reference numbers may prevent the Home Office from verifying growth or employee numbers, potentially causing delays or refusal. Concerns about solvency, the availability of genuine eligible employment, the ability to pay the required salary or the arrangements for complying with sponsor duties may also affect the outcome. An application that is not accepted for consideration, for example because endorsement is no longer valid, must be distinguished from a substantive refusal.

The appropriate response depends on the reasons for the decision. Where there appears to have been a case working error, the business may be able to use the Error Correction Request process. Before submitting a fresh application, it should establish whether a cooling-off period applies and, if so, its duration. A six-month restriction may apply in certain circumstances, but not every refusal attracts the same restriction. A refusal of the business’s sponsor licence application must also be distinguished from a refusal of an individual worker’s visa application. The Immigration Rules provide for Administrative Review of a refused Scale-up Worker application, and the procedures should not be confused.

Summary

The Scale-up sponsor licence offers eligible high-growth businesses a means of recruiting skilled overseas talent, while allowing workers to continue their careers without sponsorship after the initial six months. However, businesses must satisfy the growth, staffing, financial and sponsorship compliance requirements, and workers must meet not only the initial job, salary and English language requirements but also the PAYE earnings requirements for subsequent extensions and settlement. As the licence is valid for four years and cannot be renewed, employers should compare the Scale-up route with alternatives such as Skilled Worker from the outset and develop a strategy that reflects both their recruitment plans and the worker’s long-term immigration objectives.

ARIS International Lawyers provides tailored UK immigration and visa advice to individuals and businesses. To discuss a Scale-up sponsor licence application, a Scale-up Worker visa application or an alternative sponsorship strategy, contact us on 020 3865 6219 or leave a message.