The Home Office published the much-awaited Statement of Changes HC1919 to the Immigration Rules on 07th March 2019. The changes include wholesale changes to both the Tier 1 Entrepreneur and Investor routes as well as major changes to Tier 2 and the EU Settlement scheme.
For the purposes of the current article, I will just be focusing on the new Appendix W which replaces the now defunct Tier 1 (Entrepreneur) route.
As of 29 March 2019, the Entrepreneur route will be scrapped altogether and replaced with a new Appendix W in the immigration rules. Appendix W currently covers two new categories of workers; The Start-Up route and the Innovator route. It is intended in the future for further worker categories to be added to this appendix.
The Start-Up Route is for those seeking to establish a business in the UK for the first time. The Innovator route is intended for ‘experienced business people seeking to establish a business in the UK’. Both categories require the business to be ‘Innovative, Viable and Scalable’ and both routes require endorsement from an approved endorsing body.
I assume that the Innovator route is targeted at younger applicants with not a lot of business experience because both categories require the business to be innovative, viable and scalable and both require endorsement. The Start-Up route will essentially replace the current Tier 1 (Graduate Entrepreneur) scheme and the Innovator route the current Tier 1 (Entrepreneur).
Universities are currently approved endorsing bodies and will remain so. Further details about other endorsing bodies can apparently be found on the .gov.uk website, but have yet to be listed. We do have some details about what requirements an organisation must meet to become an endorsing body, what the endorsement criteria are and what steps the body has to take during the course of the visa;
Endorsing Body
An organisation which meets both of the following requirements:
(1) The organisation has a proven track record of supporting UK entrepreneurs, including resident workers or it is a new organisation set up for this purpose by another body which has its own track record of this nature.)
(2) The request to become an endorsing body is supported by the UK or devolved government department as being clearly linked to the department’s policy objectives.
The organisation must be able to competently assess applicants’ business ventures against the endorsement criteria set out in these Worker rules.
The organisation must agree to all of the following responsibilities:
- To stay in contact with those they have endorsed at checkpoints 6, 12 and 24 months after their application is granted
- To inform the Home Office if, at these checkpoints, both of the following apply:
- The individual has not made reasonable progress with their original business venture
- The individual is not pursuing a new business venture that also meets the endorsement criteria set out in these Worker rules
- To inform the Home Office if an applicant misses any of these checkpoints without the endorsing body’s authorisation
- To withdraw its endorsement if either (ii) or (iii) applies, unless it is aware of exceptional and compelling reasons not to withdraw its endorsement, and informs the Home Office of those reasons
- To inform the Home Office if it has any reason to believe that an individual it has endorsed breaches any of their conditions.
The organisation must not be connected to past or present abuse of the immigration system.
Endorsement Criteria
The endorsement letter must confirm both of the following:
- The applicant’s business venture meets all of the requirements in the table below:
Innovation – The applicant has a genuine, original business plan that meets new or existing market needs and/or creates a competitive advantage.
Viability – The applicant has, or is actively developing, the necessary skills, knowledge, experience and market awareness to successfully run the business
Scalability – There is evidence of structured planning and of potential for job creation and growth into national markets.
- The endorsing body is reasonably satisfied that the applicant will spend the majority of their working time in the UK on developing business ventures. Applicants will still be subject to a ‘genuine entrepreneur test’ (although it is no longer called that), the English language requirement has increased from a CEFR B1 to B2, the investment amount has decreased from £200,000 to £50,000 which can still be made available from a third party. It appears that multiple ‘Innovators’ can apply together but each applicant will rely on their own £50,000.
An endorsement letter is required at both extension and settlement stage. The settlement is achieved if two of the following requirements have been met by the applicant’s business;
- At least £50,000 has been invested into the business and actively spent furthering the business plan assessed in the applicant’s previous endorsement.
- The number of the business’s customers has at least doubled within the most recent 3 years and is currently higher than the mean number of customers for other UK businesses offering comparable main products or services.
- The business has engaged in significant research and development activity and has applied for intellectual property protection in the UK.
- The business has generated a minimum annual gross revenue of £1 million in the last full year covered by its accounts.
- The business is generating a minimum annual gross revenue of £500,000 in the last full year covered by its accounts, with at least £100,000 from exporting overseas.
- The business has created the equivalent of at least 10 full-time jobs for resident workers.
- The business has created the equivalent of at least 5 full-time jobs for resident workers, which have an average salary of at least £25,000 a year (gross pay, excluding any expenses).
We welcome these changes as it addresses key failings of the previous route. It will only attract entrepreneurs that are innovative and can evidence that their business proposals are scalable.
The business plans will be assessed by (hopefully) qualified to endorsing bodies who will be carrying out ongoing checks to ensure that the business is on track. An extension and settlement are only achieved if the business venture achieves something and does benefit the economy.
I am keen to see who the endorsing bodies will be and how they will ensure contact with applicants over the course of their time in the UK!
Disclaimer:
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Connaught Law and authors accept no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Connaught Law. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Connaught Law.
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