13 January 2020

Uptake on these new visa categories, both of which fall outside the current points-based system (PBS), has been disappointingly low, particularly as compared with their predecessor routes. In fact, the Innovator route attracted just 16 total successful main applicants in the six months since opening, while the Start-up visa saw only 290. Compare this to the 1,784 Tier 1 (Entrepreneur) and 687 Tier 1 (Graduate Entrepreneur) applications in the two quarters prior to March 2019, and it is clear that neither new route is meeting previous demand.

But why is this happening?

Process and Rules
In part, the two-stage process for both the Innovator and Start-up visas may be to blame for the low application rates. Under Tier 1 (Entrepreneur), for example, business plans and finances were reviewed simultaneously with the applications for leave. By contrast, individuals seeking permission under either the new Appendix W visas must first apply to one of the approved third-party endorsing bodies, which undertake a review the applicant’s idea and skill set to ensure that the business venture is innovative, viable, and scalable. It is only after the applicant is endorsed, a process which can take several weeks, that they may apply for leave to remain or enter the UK.

In addition to a more involved process, the underwhelming adoption may be further compounded by the limited endorsing bodies available to undertake the initial assessment. Indeed, only 35 Innovator bodies have obtained Home Office approval to date, with many only open to applicants from within their own accelerator programmes. Start-up applicants, by contrast, have 122 UK higher educational institutions they may use in addition to those bodies available to Innovators, which may account for the greater number of applications in that category.

Finally, another significant change from the legacy entrepreneur routes is that new applicants only qualify if they have a new business idea that they will actively run on a day-to-day basis. This means that endorsements will only apply to the specific venture or ventures on the application, such that foreign entrepreneurs who successfully establish, run, and subsequently sell their business – precisely the accomplished migrants the Government purportedly wishes to attract – may need to make a fresh application in order to set up a new enterprise. This alone risks dissuading some from applying in the first instance.

Looking ahead
With the introduction of the Start-up and Innovator visas, the Government has signalled its desire to move away from the present points-based system. Indeed, in light of the Government’s announced future plans for a Global Talent Visa for STEM professionals, as well as its reintroduction of the much-needed two-year Post-Study Work Visa replacement, it’s conceivable that Appendix W could be expanded to include a host of new immigration routes, all of which would fall outside of today’s points-based system.

On the other hand, Prime Minister Boris Johnson has stated that his party intends to introduce an Australian-style points-based immigration system by January 2021. With the recent Conservative general election victory, it is conceivable that an expansion of Appendix W could be shelved in favour of wiping the slate clean with a new unified and comprehensive scheme.