The latest statistics from the Home Office suggest that the newly created Tier 1 Innovator and Start-up paths have not so far proved to be a spectacular success. These two categories replaced the Tier 1 (Entrepreneur) and Tier 1 (Graduate Entrepreneur) routes, which were thought to be given unjustified leniency by Home Office case workers, coupled with their perceived lack of business expertise and knowledge, both factors to which the two routes’ significant success had been attributed. The new statistics from the Home Office suggest however that the Government’s assertion of being ‘pro-business’ is a facade.
The old Tier 1 (Entrepreneur) visa had a long and distinguished track-record. Between 2008 and 2018 the Home Office granted no less than 47,837 Tier 1 applications. This figure included applications by the main applicants and their dependants and included entry clearance, leave to remain and extension applications. The data suggests that Tier 1 applicants averaged a 59.20% success rate during the period 2008-2018.
In comparison, its successor, the current Tier 1 Innovator visa has had a very poor take-up from applicants since its inception - only four applications were submitted between April and June 2019.
This is mainly due to the route’s complexity and the high thresholds which applicants must reach. Experts have described the system’s design as “flawed”.
One of the requirements for applicants wishing to set up a business in the UK under the Innovator route is the need to obtain an endorsement from an approved endorsing body. These include leading business organisations and higher education institutions. In fact, it is virtually impossible for the new system to gain as much traction as the old one. There are bars and stringent quotas set in place in order to limit the number of grants each year. To put this into perspective, there are currently 30 endorsing bodies each having the ability to secure no more than 25 places each year. In practice, this effectively means that the number of successful applications cannot surpass 750.
The abolition of the Entrepreneur visa has deprived the UK of investment and job creation. It is surprising that amidst the chaos caused by the previous Prime Minister and the lack of relevant legislation passed last year (and this) she found time to abolish the Entrepreneur visa completely, instead of amending its terms to accommodate concerns about some types of businesses, such as coffees shops, etc. It is now impossible to establish a business without investing £2 million - a ridiculously large sum - unless you fit into the new category above, and even if you do you need to find an endorsing body to back your project. History will show that this is just part of a much larger mess left by the previous Prime Minister and her maladministration (see the closure of police stations and reduction in police force numbers making it fertile ground for burglars and people carrying knives to rule the streets in some areas and A&E capacity shortages being blamed on immigration quotas, etc). The abolition of the Entrepreneur visa can easily be reversed if the powers that be really want to show the UK is open for business – regardless of whether we are in the EU or not. The question is whether the egos of those who supported the ill-conceived abolition of this category will overshadow the needs of the UK, and whether the Government and the Home Office are approaching these matters with a fresh outlook and putting the interests of the UK and job creation first.
Gherson have had the development of the Tier 1 Innovator and Start-up routes under close review since their announcement. If you have any questions or queries relating to these categories, please do not hesitate to contact us.
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. Gherson accepts 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 Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.