UK scale-up visa sees slow take up

Sanwar Ali Comments:

It seems that not much has changed since the news report on the Scale-Up visa  was published in December 2022.  The UK economy is stagnant.  The last three months of 2022 saw no growth at all.  If a new UK visa category can encourage new investment and growth now might be a good time to introduce such a visa.  The UK Government perhaps has conflicting aims.  On the one hand they wish to encourage growth.  On the other hand they wish to maintain tough immigration controls.  Many companies are either not eligible for the Scale-Up visa or do not find it an attractive proposition.

According to a report published by Business Matters magazine, just four scale-up visas were issued since the launch of the new programme. Home Office records show that Macademia, a children’s educational TV and games producer based in Arkley, North London, was the first to be approved after applying for a licence to bring in an Argentinian freelancer for a full-time role.

The three other companies were Intrepid – a London-based software consultancy; Pentific a property management software developer also based in London; and Porter Bathroom, a Northern Ireland-based firm, which makes luxury vanity units and baths.

Macademia, which operates TV channels and streaming apps called Da Vinci and Azoomee, meets the minimum 20% a year sales or employment growth criteria set by the Home Office. Three years ago, the company also had more than 10 staff, another criteria that must be met to be eligible for a scale-up visa, and now employs a hundred people across the UK, Germany and Turkey.

Applying for the sponsor licence

Co-founder and chief operating officer of Macademia, Estelle Lloyd, said: “The reason for applying for the licence has now changed. We have been working with someone who is based in Argentina as a freelancer and that person wanted to relocate to the UK. We considered bringing him over as a full-time employee but his plans and our plans have now changed.”

Ms Lloyd said she only heard about the UK scale-up visa during a group chat with serial entrepreneur, Sherry Coutu. Lloyd said: “I looked into it and saw it was a more streamlined process.”

She recalled how after Macademia had secured a scale-up certificate of sponsorship, they submitted details in UK Visas and Immigration’s visa portal. Ms Lloyd said the details she entered were initially rejected, and after failing to reach anyone at the Home Office, she simply applied for a second sponsorship licence.

This time the portal reportedly accepted the details that were entered.

Ms Lloyd said: “The reapplication added a couple of weeks’ delay but the overall experience of applying for a scale-up visa was positive.”

Few apply for a sponsor licence

However, questions have been raised about why so few businesses have applied for sponsor licences given that the UK scale-up visa is aimed at growing companies looking to access skilled workers from all over the world.

The new scheme is designed for businesses who have never used the UK visa system before, but can be accessed by organisations already sponsoring overseas employees on skilled worker visas.

The fees associated with the UK scale-up visa are considerably lower than those of the skilled worker visa, while offering international workers greater flexibility and only requiring them to work for a sponsoring employer for six months.

However, to be eligible to apply for a licence to sponsor UK scale-up visa holders, a company must have been VAT registered for just over three years, which excludes many fast-growth start-ups.

Meanwhile, unlike the skilled worker visa, employers sponsoring people via the scale-up visa are not able to pay to fast track applications. In some quarters, it’s this that has been attributed to the slow take up amid claims that the Home Office is currently taking up to three months to process sponsor licences for scale-up visas.

According to Business Matters magazine, the first four scale-up sponsor licences were processed in less than four weeks.

Number of licences granted

Despite reports of very little uptake, a Home Office spokesperson said: “We have granted a number of licences under the scheme. The public rightly expects us to control immigration and ensure it works in the UK’s best interests by filling skills gaps and growing the economy.”

“Through this route we will support more high-growth companies here in the UK to attract exceptional talent,” the spokesperson added.

Meanwhile, it’s understood that the Home Office is currently in the process of automating its visa application systems with a view to accelerating the approval process.

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