SPEEDREAD: From 29 March 2019 there will be significant changes to Tier 1 immigration categories for new applicants. This Information Note contains details of the key changes, including which visa routes will be closed and when.
On 7 March 2019, the Home Secretary laid Statement of Changes to the UK Immigration Rules before Parliament, with many changes applying from 29 March 2019.
The anticipated changes primarily concern the closure of the Tier 1 (Graduate Entrepreneur) and Tier 1 (Entrepreneur) categories to new applicants, and these will be replaced by the Start-up, and Innovator visa routes. The Tier 1 (Investor) category will remain open with new applicants having to hold funds for a longer period, and changes to which investments are acceptable. The Statement of Changes also reiterates the UK Government’s intention that the EU Settlement Scheme will fully open to all eligible applicants.
Individuals who are already in the UK and/or granted a visa in the relevant visa category under the existing rules in place, before 29 March 2019, are generally not materially affected by the new changes, and broadly speaking will benefit from transitional provisions to complete their “route” to settlement (indefinite leave to remain) in the UK. For more information, please see Dixcart Article: 571 Routes to UK Residence and Citizenship.
Overview of Key Dates
|28 March 2019||Tier 1 (Investor)|
Tier 1 (Entrepreneur)
|Last day for new visa applications to be submitted and considered under the existing rules at this date|
|29 March 2019||Tier 1 (Investor)||New rules apply to new applicants|
|Tier 1 (Entrepreneur)||Closed to new applicants|
|Start-up||Open for applications|
|30 March 2019||EU Settlement Scheme||Fully opens for applications|
|5 April 2019||Tier 1 (Graduate Entrepreneur)||Last day an endorsement letter can be issued|
|5 July 2019||Tier 1 (Graduate Entrepreneur)||Last day for new visa applications to be submitted and considered under the existing rules at this date|
|6 July 2019||Tier 1 (Graduate Entrepreneur)||Closed to new applicants|
What are the Changes for Entrepreneurs and Investors?
Tier 1 (Investor) category
The substantive changes apply to new visa applications submitted on/after 29 March 2019, and are therefore subject to consideration under the new rules which include:
- Applicants need to have held a minimum of £2 million for at least 2 years prior to the date of application.
- Cannot invest in UK Government bonds .
- The definition of “active and trading UK registered companies” being restricted, for the purposes of investment in share or loan capital.
- Where intermediary vehicles are used, they must be regulated by the Financial Conduct Authority and evidence must be provided of the final investment destination.
- Applicants need to provide a UK bank confirmation that mandatory due diligence checks and “Know Your Customer” enquiries have been made.
- The ability to rely on pooled investments which also receive funding from a UK or devolved government department or one of its agencies.
- The Home Office have the power to refuse applications, if it has reasonable grounds to believe that the funds have been, or will be, transferred internationally, by means which are unlawful in any of the countries involved.
Individuals who have been granted a Tier 1 (Investor) visa under the existing rules, before 29 March 2019 will not be affected by the new substantive changes and will benefit from transitional provisions which will be in place until 5 April 2023 and 5 April 2025, for extension and settlement applications respectively. Some of the new changes will also apply to existing Tier 1 (Investor) visa holders, where they do not alter the requirements substantively and are considered to be proportionate.
The UK Immigration Minister intends to implement further changes at a future unknown date, such as enhanced checks on an applicant’s financial situation and business histories, carried out by a UK-regulated auditor.
Tier 1 (Entrepreneur) and Tier 1 (Graduate Entrepreneur) categories
As detailed above, the Tier 1 (Entrepreneur) and Tier 1 (Graduate Entrepreneur) routes will be closed to new applicants from 29 March 2019 and 6 July 2019 respectively. The Start-up, and Innovator categories will be open to applications from 29 March 2019.
The Start-up route is similar to the Tier 1 (Graduate Entrepreneur) category and is for those starting a new business for the first time in the UK where initial funding is not required. The visa will be valid for 2 years and while it will not lead to settlement directly, individuals can apply to continue their business venture(s) and extend their immigration status in the UK under the Innovator route.
The Innovator route is intended for more experienced businesspeople. Generally, initial capital of £50,000, from any legitimate source is required, but not if the individual is progressing from a Start-up visa and has achieved significant elements of their business plan. If there is more than one team member, they cannot rely on the same £50,000 funds. The Innovator visa will be valid for 3 years.
Individuals applying for either of these visas must have their business ideas assessed by an endorsing body for:
- Innovation – genuine, original business plan
- Viability – has/actively developed necessary skills, knowledge, experience and market awareness to successfully run the business
- Scalability – evidence of structured planning and of potential for job creation and growth into national markets
An endorsement letter confirming the above and other information, will need to be obtained from an endorsing body “such as business accelerators, seed competitions and government agencies, as well as higher education providers” which is either:
- A recognised UK higher education institution, which has established processes for identifying, nurturing and developing entrepreneurs amongst its undergraduate and postgraduate population (for the Start-up route only); OR
- An organisation with a proven track record of supporting UK entrepreneurs, whose request to become an endorsing body is supported by a UK or devolved government department (for both the Start-up, and Innovator routes).
The Statement of Changes does not list specific endorsing bodies but they must meet the above criteria. It is expected that the Home Office will publish a list of endorsing bodies in due course, similar to the current practice under the Tier 1 (Graduate Entrepreneur) category.
Endorsing bodies will need to bear a lot of responsibility, and will be carefully vetted. For instance, endorsing bodies must agree to stay in contact with those they endorse at “checkpoints” 6, 12 and 24 months. If certain criteria are not met, such as reasonable progress not being made and the applicant not pursuing new credible business ideas, or a meeting is missed without authorisation, and/or there is reasonable belief that an individual is working outside their own business, the endorsing body will be obliged to inform the Home Office and withdraw endorsement. There is clearly a shift from the Home Office to endorsing bodies to ensure business ventures are contributing substantively to the UK economy.
The Home Office will use the endorsement letter as one factor to consider the credibility of the visa application, as well as other factors including “any other relevant information”. Applicants will also need to meet a higher English language requirement at Level B2 of the Common European Framework of Reference for Languages, and may also need to attend an interview to discuss the business venture. The maintenance requirement is also being reduced to £945 per person (which is in addition to the initial capital, where required).
An Innovator can extend their visa for a further 3 years but will require endorsement based on assessment of significant achievement against their business plan and whether their business is trading.
Alternatively, an Innovator can become eligible to apply for settlement after 3 years, in this category, if endorsed and they can meet at least 2 requirements which include:
- 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’ 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)
Individuals who have been granted a Tier 1 (Entrepreneur) visa under the existing rules before 29 March 2019 will not generally be affected by the new changes and will benefit from transitional provisions which will be in place until 5 April 2023 and 5 April 2025 for extension and settlement applications respectively. Some of the new changes will also apply to existing Tier 1 (Entrepreneur) visa holders, as these are considered to be proportionate.
Individuals who have been granted a Tier 1 (Graduate Entrepreneur) visa under the existing rules before 6 July 2019 won’t generally be affected by the new changes and will benefit from transitional provisions which will be in place until 5 July 2021, 5 July 2025, and 5 July 2027 to switch into, extend, and settle under the Tier 1 (Entrepreneur) route respectively.
Are There Other Changes?
The above information simply provides a flavour of some of the key changes. There are other revisions, which will be taking place including the full opening of the EU Settlement Scheme, which will be covered in another Information Note, and other changes such as to the employment of Tier 2 migrants and technical changes to the Tier 4 student category.
As detailed above, there will be many changes taking place in the near future to the various UK visa categories. Changes to additional UK visa categories will be detailed in a subsequent Dixcart Information Note. If you have any questions please contact us: firstname.lastname@example.org.