The new High Potential Individual and Scale-up routes

Statement of Changes in Immigration Rules, HC 1118, was published on 15 March 2022. This includes a number of developments expected to be helpful for businesses seeking to facilitate knowledge transfer within an international group, to set up or expand a business in the UK, or to access a bigger pool of skilled talent from abroad. This article focuses on the new Scale-up and High Potential Individual routes, and we have covered the new Global Business Mobility routes in a separate article.

High Potential Individual (HPI) route

The HPI route will launch at 9 am on 30 May 2022 and is intended for recent graduates from top universities to be able to live and work in the UK on an unsponsored basis for a limited period.

Eligibility requirements

To be eligible, an applicant must:

• Be aged 18 or over;

• Have been awarded an academic qualification equivalent to a UK bachelors or UK postgraduate degree within the five years before the date of application (an Ecctis certificate will be needed to show the equivalence of the degree);

• Have received their degree from an institution listed on the Global Universities List which will be published by the Home Office in the future on GOV.UK;

• Meet an English language requirement at or above Level B1 on the CEFR;

• Meet a financial requirement of £1,270, unless they are applying in the UK have lived in the UK with immigration permission for at least 12 months before the application;

• Hold a valid certificate certifying they are free of TB, if required;

• Pay the Immigration Health Surcharge; and

• Not previously have been granted immigration permission as a Graduate, Doctorate Extension Scheme participant or High Potential Individual.

The Global Universities List will be updated annually and will include all institutions ranked within the top 50 of at least two of the following ranking systems:

• Times Higher Education World University Rankings

• Quacquarelli Symonds World University Rankings

• Academic Ranking of World Universities

Application process and grant

It will be possible for applications to be made either from abroad or from within the UK, provided the applicant is not in the UK as a visitor with other limited (mostly short-term) immigration statuses.

The HPI route will have a similar grant profile to the Graduate route, offering successful applicants three years’ immigration permission if they have a qualification equivalent to a UK PhD, or two years if they have one that is equivalent to a UK Bachelor or Master’s degree.

Applications by partner and child dependants will be allowed.

Comments for employers

The route will not lead to settlement in its own right, or be a category under which time can be counted as part of the continuous qualifying period for settlement in any other route. It is therefore likely that some eligible applicants may prefer either to bypass the route in favour of one that leads to settlement, or will seek to switch into a settlement route as soon as they are eligible.

Employers should be aware that migrants in this route may approach them for sponsorship at some point before their HPI permission is due to expire. Sponsored options currently include the Skilled Worker route, and the Scale-up route once available.

Scale-up route

This route will be available from 22 August 2022. It will enable scale-up businesses to sponsor skilled workers for six months, while giving those workers flexibility to change employer after that period and to settle in the UK after five years’ residence. Applications by partner and child dependants are allowed.

It is intended to be a ‘fast-track’ route, however further details are awaited on how this will be achieved operationally.

Scale-up route sponsors

To be recognised as a sponsor under the route, a scale-up business will need to show annualised turnover or staffing growth of at least 20 percent for the last three years before application. They also must have had at least ten employees at the start of the three-year period. The Home Office is also considering allowing other criteria for recognition in the future.

Eligibility – sponsored applications

A sponsored application is required initially, and for individuals who are making a further application under the route where they have not been employed as a Scale-up worker by a sponsor for at least six months.

An applicant making a sponsored application must have a valid certificate of sponsorship from an A-rated sponsor.

They must have a genuine offer of employment for at least six months, in an occupation skilled to graduate level (at least Level 6 on the Regulated Qualifications Framework) and listed in Appendix Skilled Occupations as approved under the Scale-up route.

The guaranteed basic salary offered for the job must be at least £33,000 per year, £10.58 per hour, or the going rate for the occupation code, whichever is highest.

The applicant must also:

• Be aged 18 or over;

• Meet an English language requirement at or above Level B1 on the CEFR;

• Meet a financial requirement of £1,270 (or have their sponsor certify they will maintain and accommodate the applicant for up to this amount during the first month of their employment), unless they are applying in the UK have lived in the UK with immigration permission for at least 12 months before the application;

• Hold a valid certificate certifying they are free of TB, if required; and

• Pay the Immigration Health Surcharge (there is no Immigration Skills Charge under this route).

Eligibility – unsponsored applications

An applicant can make an unsponsored application if they have completed at least six months employment with their sponsor in a previous permission on the Scale-up route. If the applicant is applying for entry clearance, their permission on the route must have expired less than six months before the date of application.

In an unsponsored application, an applicant must show monthly PAYE basic salary earnings in the UK equivalent to at least £33,000 per year during at least 50 percent of their permission on the Scale-up route. Periods of unpaid absence from work due to statutory maternity/paternity/parental/shared parental leave, statutory adoption leave, or sick leave will be deemed to meet the earnings requirement provided the salary was otherwise over the £33,000 threshold.

Application process and grant

Like the HPI route, it will be possible for applications to be made either from abroad or from within the UK, provided the applicant is not in the UK as a visitor with other limited (mostly short-term) immigration statuses.

Immigration permission will be granted for two years to those who made a sponsored application, and for three years to those who made an unsponsored one.

Sponsored Scale-up migrants must be employed in their sponsored job for the first six months of their permission. Otherwise, they are allowed to be employed or self-employed in any capacity other than as a professional sportsperson or sports coach.

Eligibility – settlement

Settlement will be possible under the Scale-up route once an applicant has spent at least five continuous years in the UK on the route or in combination with the following routes:

• Skilled Worker;

• Global Talent;

• Innovator;

• T2 Minister of Religion

• International Sportsperson

• Representative of an Overseas Business

• Tier 1 Migrant, other than Tier 1 (Graduate Entrepreneur).

At the time of the settlement application, an applicant must be in employment with a PAYE salary of at least £33,000 per year.

They must also demonstrate monthly PAYE earnings in the UK equivalent to at least £33,000 per year during at least 24 months of the three years immediately before the date of application. Periods of unpaid absence will be treated in the same way as for unsponsored Scale-up applications.

An applicant for settlement must also pass the usual Knowledge of Life in the UK requirement.

Comments for sponsoring employers

Eligible scale-up businesses will need to assess whether becoming a sponsor under this route offers significant enough benefits in comparison to holding a Skilled Worker sponsor licence.

On the plus side, no Immigration Skills Charge will be payable under the route. Also, if enough scale-up businesses opt to become sponsors, this will introduce a comparatively mobile cohort of skilled workers into the UK economy, who are likely to be able to command salaries substantially above the £33,000 basic salary requirement. Some of these individuals will choose to move between scale-up businesses, so scale-ups should benefit to some extent from being able to employ them without having to complete any immigration formalities or incur the associated costs.

On the minus side, the skill and salary thresholds under the Scale-up route are higher than for Skilled Worker, and sponsored applicants are only incentivised from an immigration perspective to remain with the sponsor for six months.

Comments for other employers

Non-sponsoring employers can employ Scale-up workers at any skill or salary level. However, the worker’s ability to extend their immigration permission may be affected if they are not paid monthly, and do not earn the equivalent of £33,000 under PAYE per year in aggregate, as required. Employers may need to consider formulating a policy on what, if any, enquiries they consider it appropriate to make to a Scale-up worker about their ongoing eligibility under the route.

It would appear that in requiring a minimum level of PAYE earnings (as opposed to counting both employed and self-employed income), the Home Office may be seeking to minimise the risk that participants in the route will become employed in unskilled occupations and that their earnings may be fraudulently reported. These things were a problem under the previous Tier 1 (General) category and contributed to its discontinuation. The extent to which entrepreneurial migrants will seek to set up and be employed by their own businesses remains to be seen.

The need to calculate and monitor PAYE earnings introduces uncertainty and complexity into the journey to settlement for Scale-up worker, and inevitably, some participants will fail to meet the earnings requirements at extension or settlement stage. If this happens, an employer may be asked to sponsor the person as a Skilled Worker. Although this would result in a cost to the employer, the period of sponsorship may be relatively short as time spent under the Scale-up route will count towards settlement under Skilled Worker.

It is highly likely that amendments to this route will be made post-launch, once the Home Office has had an opportunity to assess the overall attractiveness and effectiveness of the route in contributing towards meeting the objectives of the Government’s Plan for Growth. It certainly could be a flexible and straight-forward for both businesses and skilled workers with good earnings potential.

We will be providing an update on these new routes and other UK immigration changes in our What’s Happening in Immigration Law webinar on 27 April 2022, which you can sign up for here. Alternatively, please get in touch with a member of our Immigration Team for help with any queries.