Scale-up Sponsor Licence Guidance

Table of Contents

• What is a Scale-up sponsor licence?
• What are the Scale-up sponsor licence requirements?
• How to apply for a Scale-up sponsor licence
• What is the difference between a Skilled Worker and Scale-up sponsor licence?
• What happens if a Scale-up sponsor licence application is refused?

What is a Scale-up sponsor licence?

The Scale-up sponsor licence allows fast-growing (‘scale-up’) businesses in the UK to hire highly skilled staff from overseas to facilitate their rapid expansion. Employers can use the licence to recruit overseas workers for eligible roles that meet the required skill and salary thresholds, with employment lasting at least six months.

The Scale-up visa sponsorship rules are slightly different to other routes. Employers are only required to sponsor Scale-up Workers for the first six months of their permission. After this period, their sponsorship responsibility automatically end, even if they continue employing the worker. Workers can also change jobs or employers without new sponsorship, provided they continue to meet the Scale-up route requirements.

Employers who already hold a valid sponsor licence can apply to add the Scale-up route to their existing licence rather than applying for a separate licence, but they must still meet the relevant eligibility requirements.

A Scale-up sponsor licence is valid for four years and cannot be renewed. Employers can only be licensed once under this route, even if they surrender their licence or have it revoked before the four-year period ends. To continue sponsoring workers after the Scale-up licence ends, the employer must hold or apply for a licence under another eligible sponsor route, such as the Skilled Worker Sponsor Licence.

What are the Scale-up sponsor licence requirements?

To make a successful application for a Scale-up sponsor licence, your organisation must meet the general sponsor licence requirements and the specific Scale-up requirements.

To meet the general sponsor licence requirements, your business must:

• Be a genuine organisation and operate lawfully in the UK
• Have suitable HR systems to meet sponsor duties
• Be honest, dependable and reliable.
• Have key personnel who are “honest and dependable”
• Have not breached immigration rules

To meet the Scale-up-specific requirements, your business must:

• Be solvent. The Home Office will check Companies House and insolvency registers.
• Be able and intend to offer genuine employment at the required skill and salary level.
• Meet the rules on third-party working where they apply.
• Comply with the National Minimum Wage and the Working Time Regulations.
• Offer work that meets the definition of an eligible role, and
• Meet the definition of a qualifying Scale-up sponsor under the standard pathway or the endorsing body pathway.

How to be a qualifying Scale-up sponsor through the standard pathway

Under the standard pathway, the employer must meet two growth requirements. It must:

• Have achieved at least 20% annualised growth in employment or turnover during the three years before the application.
• Have had at least 10 employees at the start of that three-year period.

The Home Office checks these requirements automatically using PAYE and VAT information submitted to HMRC. Employment growth is assessed using PAYE data, while turnover growth is assessed using VAT returns. Employers only need to meet one of the two growth measures. The Home Office also checks Companies House and insolvency records to confirm the business is solvent.

Employers must provide all its PAYE reference numbers when applying, including those covering settled or unsponsored employees, and ensure their HMRC records are complete and accurate.

An application will be refused if the Home Office cannot verify the business against HMRC records, confirm its solvency, or establish at least 37 months of HMRC history without data gaps and the required minimum employee count. Applications will also fail the standard pathway assessment if neither employment nor turnover meets the 20% annualised growth threshold.

How to be a qualifying Scale-up sponsor through the endorsing body pathway

The endorsing body pathway allows UK businesses with insufficient HMRC history to qualify for a Scale-up sponsor licence through an alternative assessment process. To use this pathway, employers must obtain an endorsement from a Home Office-approved endorsing body by meeting the eligibility criteria below. An additional fee is payable for the endorsement.

To qualify for endorsement, the organisation must:

• Have at least 10 employees who pay Income Tax and National Insurance through its PAYE scheme
• Be registered for VAT
• Be solvent and trading in the UK
• Have an HMRC footprint of less than four years
• Show the potential to grow at a rate that is consistent with the Scale-up route
• Be reasonably expected to qualify under the standard pathway within the next four years
• Have enough finance to pay suitable salaries for eligible skilled roles, and
• Have a UK-registered corporate bank account

The organisation must also meet at least three of these five criteria:

• Growth – more than 20% growth in turnover or employment each year over a two-year period.
• Government programme or funding – participation in a recognised scale-up programme, receipt of an eligible Innovate UK loan or grant, or participation in the Small Business Research Initiative.
• Finance – at least £1 million in equity finance raised in one round during the 12 months before the endorsement application.
• International activity – global offices or operations and at least 10% of turnover from exports.
• Research and development – spending on research, development or innovation equal to 10% of operating costs in each of the last three years, or 15% in one of the last three years.

After receiving endorsement, the organisation must submit its sponsor licence application within three months. It must give the Home Office its valid endorsement reference number. An endorsement that was issued more than three months before the application is no longer valid.

How to apply for a Scale-up sponsor licence

The main application steps involved in applying for a Scale-up sponsor licence are as follows:

1. Gather the required business and registration details – The employer will not normally need to send supporting documents for a Scale-up application. Instead, it provides details that allow the Home Office to check the requirements. Documents may still be required if the organisation is regulated or licensed, or if it applies for another sponsor route at the same time.
2. Check the general sponsor licence requirements – Confirm that the business is genuine and operates lawfully.
3. Select suitable Key Personnel.
4. Check its HR systems – i.e. make sure the business has suitable systems for keeping records, monitoring sponsored workers and reporting relevant changes to the Home Office.
5. Get endorsement if needed – An employer on the endorsing body pathway must first obtain an endorsement from an approved body. It must then apply for the licence within three months.
6. Complete the online application – Enter the required business, tax and registration details. An existing sponsor can apply to add the Scale-up route to its current licence.
7. Pay the correct application fee – Pay the sponsor licence fee. An employer using the endorsing body pathway must also pay the endorsing body fee. There is no Immigration Skills Charge for the Scale-up route.
8. Submit any required evidence – Provide evidence if the business must be registered with, inspected by or monitored by a regulatory body or licensing authority. Provide the required documents for any other sponsor route included in the same application.

The Home Office will check the business against the general sponsor licence rules. It will also check whether the business meets the relevant Scale-up pathway.

What information is needed for a Scale-up sponsor licence application?

An employer applying through the standard pathway must enter:

• Its Companies House reference number, if it must be registered at Companies House
• Its Unique Taxpayer Reference (UTR), if it is a sole trader or partnership that does not need to register at Companies House
• Its VAT registration number
• Every PAYE reference number used for its workers to pay Income Tax and National Insurance

All PAYE references must be included. Missing a reference can delay the automated checks and even cause the application to be refused. An employer applying through the endorsing body pathway must provide a valid endorsement reference number. The Home Office will check the endorsement online. The sponsor licence application must be made within three months after endorsement.

Supporting documents are not normally required for either pathway. However, evidence may be required if the organisation is subject to regulatory or licensing requirements, or if it applies for another sponsorship route at the same time.

What is the difference between a Skilled Worker and Scale-up sponsor licence?

Compared with a Skilled Worker sponsor licence, the key differences of a Scale-up sponsor licence for employees include:

• Scale-up sponsorship only lasts for six months – The employer’s sponsorship duties for the worker end after the first six months, whereas Skilled Worker sponsorship normally continues throughout the sponsored employment. This can reduce the period of sponsorship responsibility. It also gives the employer less certainty about retention because the worker can then change jobs or employers without new sponsorship.
• No Immigration Skills Charge for Scale-up sponsorship– Employers do not need to pay the Immigration Skills Charge when sponsoring Scale-up Workers, whereas the charge generally applies to Skilled Worker sponsorship, subject to exemptions.
• Fewer application documents are normally required for Scale-up sponsorship – Scale-up sponsorship applications are exempt from the standard requirement to provide at least four supporting documents. The Home Office generally uses HMRC and other official records to verify relevant eligibility criteria. In contrast, Skilled Worker sponsor licence applicants are normally subject to the standard supporting-document requirements.
• Stricter business eligibility requirements for Scale-up sponsorship – Employers must qualify as a Scale-up business through either the standard pathway or the endorsing body pathway. Skilled Worker sponsors are not subject to these additional business growth requirements.
• Limited licence validity for Scale-up sponsorship – A Scale-up sponsor licence lasts for four years and cannot be renewed. The employer can only be licensed once under this route. In contrast, a Skilled Worker sponsor licence remains valid indefinitely, provided the employer continues to meet its sponsorship obligations.

What happens if a Scale-up sponsor licence application is refused?

If a Scale-up sponsor licence application is refused, the Home Office will send a decision letter explaining why. There is no right of appeal against a sponsor licence refusal. However, the employer can request error correction if they believe the refusal resulted from a caseworker error or that evidence submitted with the original application was overlooked. The error correction request must be made within 14 calendar days after the date of the refusal letter. If the Home Office accepts that it made an error, it will invite the employer to submit a new online application.

Employers may also reapply for a sponsor licence, subject to any applicable cooling-off period. No cooling-off period applies if the application was refused solely because the business did not meet the definition of a qualifying Scale-up sponsor. For other refusal reasons, a six-month or longer cooling-off period may apply, depending on the circumstances. Before reapplying, employers should address the reasons for the original refusal and ensure they meet the relevant requirements.

For more information, read our guide on What to Do If Your Sponsor Licence Application is Refused?

Reference:

GOV.UK: Guidance for sponsors: Sponsor a Scale-up Worker (workers and temporary workers)