SMEs make up more than 99% of UK private-sector businesses, employ approximately 16.9 million people and generate an estimated £2.8 trillion in turnover. Their growth is therefore central to the productivity of the UK economy and its ability to compete globally. Where specialist skills are not easily available domestically, these businesses must be able to access international talent.

The UK immigration system is open to businesses of every size. In practice, however, many of its processes and compliance obligations are easier to manage if a business already has the people, systems and budget normally associated with a larger organisation. That creates a particular challenge for start-ups and scale-ups, which are often most dependent on scarce international talent while having limited administrative capacity.

In September 2026, Prime Minister Andy Burnham said that “Government [is] firmly on the side of the people who take risks, start companies, create jobs and bring new ideas to life.” Access to talent is an important part of that ambition and some of the people who will help UK businesses develop products and create domestic jobs will come from overseas. The question is whether the immigration system allows growing businesses to access this crucial international talent at the speed and efficiency needed.

The existing UK immigration framework is set up to support traditionally structured businesses. It has Sponsorship safeguards help protect workers, encourage proper recruitment practices and ensure employers take responsibility for the people they sponsor. Whilst these are all legitime aims, the reality of how they are implemented means that the same requirements have a different impact on a multinational with established HR and mobility teams than a founder-led, fast-scaling business making its first international hire.

Sponsorship Before Scale

Obtaining a Sponsor Licence is the first step a company needs to complete before being able to sponsor international talent under a Skilled Worker visa. A business must show that its UK operation is genuine, established and trading and that it has systems capable of meeting its record-keeping, monitoring and reporting duties.

It must also appoint people to take responsibility for the licence, including the authorising officer, who must be a senior paid member of staff or office holder based in the UK and holds ultimate responsibility for the licence. External advisers can provide significant support, but they cannot assume all of the sponsor’s internal responsibility.

Large companies can often absorb these requirements through established HR, legal and compliance functions. A fast-scaling technology or engineering company may not be able to do so as easily.

This can create a sequencing problem for a small company who must first establish UK-based internal compliance functions before it can recruit the international expertise required to reach the next stage of growth.

Once licensed, the employer assigns a Certificate of Sponsorship for each worker they wish to sponsor. This certificate links a specific individual to a specific employer and role and records details including their occupation code, salary and work location. All of these are crucial compliance details that the UK authorities review to determine whether an individual is eligible for the visa. Material changes to these aspects of their UK employment may need to be reported and, in some circumstances, a new certificate and visa application will be required.

The Skilled Worker route remains valuable because it provides a clear and objective route for employers to scale international recruitment and, under the current rules, allows the visa holder to apply for permanent residence in the UK after five years. Workers in graduate-level roles can generally bring dependant family members. For businesses that can manage the process and cost, it offers more certainty than many temporary alternatives.

The Temporary Shortage List

One of the benefits of the Skilled Worker route is that it also offers sponsorship for roles with a lower skills threshold via the Temporary Shortage List. This list was introduced to preserve time-limited access for selected medium-skilled occupations that align more closely with entry-level jobs than graduate jobs. This can make sponsorship possible for a role that would otherwise be ineligible. 

However, it does not remove the need for a Sponsor Licence, Certificate of Sponsorship or ongoing compliance. New applicants sponsored in below-graduate-level occupations are also generally unable to bring dependent family members, making a less attractive option for an employee who has a partner or children they would like to relocate with.

The temporary nature of the list also creates practical limitations, as eligible roles may be restricted to particular job titles within a broader occupation code and roles can be added or removed as policy and labour-market evidence develops. 

The government has asked the Migration Advisory Committee (MAC) to assess which occupations should qualify. To establish whether a role should be included on the list, the MAC assesses data such as vacancies, pay and labour demand, alongside evidence from employers, trade unions and government bodies. For inclusion, a role must not only be in short supply in the UK but also support the government’s Industrial Strategy or critical UK infrastructure. There must also be a credible plan from employers to increase the domestic workforce supply.

Smaller businesses can influence the MAC review process, although doing so requires preparation and responding to formal calls for evidence. Given the administration involved in doing this directly, it can often be easier to provide evidence through sector bodies, regional business groups or trade associations. Businesses should also explain why the skills cannot be developed domestically within the required timeframe, what they are investing in training and apprenticeships and how international recruitment would protect or create UK jobs. Regional and specialist shortages are particularly important because national data may conceal them.

The current list is due to expire at the end of 2026, meaning roles currently on the list may not be sponsorable in the new year. The government is yet to announce what roles may be eligible in the next Temporary Shortage List or for how long those roles will remain eligible for sponsorship. However, it is expected that the current list will significantly reduce and that roles will only be eligible for a period of 18 months.

The Temporary Shortage List is therefore useful, particularly for roles closer to entry level that would otherwise fall outside sponsorship. It does not, however, remove one of the biggest considerations for a growing business: sponsorship costs.

The Upfront Cost of International Recruitment

Government fees for a five-year Skilled Worker visa can total around £13,900 when the visa fees and sponsorship costs are combined. This is before legal advice, relocation support and the incidental costs of monitoring visa expiry dates, reporting changes and preparing staff for a possible compliance audit are considered.

In a competitive recruitment market, employers often pay or reimburse many of these costs themselves, creating a significant upfront investment when hiring  international talent.

The consequences of getting compliance wrong are also significant. They can include civil penalties of up to £60,000 for each illegal worker and suspension or revocation of the Sponsor Licence, meaning an employer cannot hire future international talent and may even have to cancel existing visas for current sponsored employees. 

The government’s new Visa Fees Reimbursement Scheme for Scale-Ups is a recognition of this pressure. Eligible businesses can claim up to £5,000 for each international hire and their dependants, subject to an annual limit of £25,000. However, businesses applying to the scheme must satisfy a specific scale-up definition and be within the Clean Energy, Life Sciences or Digital and Technologies sector, so its application is limited. Additionally, the scheme works on a reimbursement basis, meaning businesses still need to pay the upfront costs before recovering them.

Whilst the scheme could offer meaningful help to qualifying companies, many early-stage businesses and firms outside the priority sectors will not fall within it, so other similar schemes could also help  other sectors where recruiting talent is difficult.

Options Beyond Sponsorship

Given the need for a Sponsor Licence and the high costs of sponsored work visas, many employers do look for alternative options when hiring international talent. These rely on the individual being eligible for the visa rather than their role or their UK employer.

The High Potential Individual (HPI) route is available to people awarded a qualification within the previous five years by an institution on the government’s Global Universities List. Applicants on this route do not require a job offer or employer sponsorship and there are no restrictions on the type of role that they can undertake in the UK. Whilst this makes the visa is very flexible for eligible individuals and cheaper for employers to support, with approximate costs of £3,202 for a  two-year visa for individuals with an undergraduate degree or £4,237 for a three-year visa for individuals with a PhD, the visa is not renewable and does not count towards permanent residence in the UK. As such, it can help a business recruit eligible early-career talent, but it is limited by the institution attended and the date of graduation, so it cannot provide a workforce-wide solution.

The Global Talent route provides similar flexibility for the visa holder and a route to permanent residency. However, the Global Talent visa first requires an endorsement from one of the relevant UK endorsement bodies: The British Academy, The Royal Academy of Engineering, The Royal Society, UK Research and Innovation (UKRI) or Tech Nation. An endorsement application is highly subjective and specific to the individual applicant. The assessment may require substantial evidence of recognition, achievement and future potential. If this high threshold is met and an individual is endorsed, they can apply for the Global Talent visa, which can be valid for five years, and individuals may be eligible for permanent residence after three years. The approximate cost of a five-year visa is £5,941.  The Global Talent visa is a valuable route for exceptional applicants and can support people establishing or working in entrepreneurial businesses, but it is not a substitute for a predictable sponsorship strategy for the wider range of specialist talent a scaling company may need.

A Proportionate System for Growing Businesses

A business-friendly immigration system can support access to global talent and provide investment in the UK workforce.  Practical developments to the current system that would help achieve this include:

• Creating a simpler, supported Sponsor Licence pathway for first-time and smaller sponsors, with clear guidance and proportionate compliance requirements.
• Developing salary and skill requirements that respond to regional labour markets, sector-specific shortages, early-career potential and the remuneration structures used by fast-growth businesses.
• Expanding targeted cost-saving mechanisms and reimbursement schemes, allowing growing businesses to access international talent while continuing to invest in apprenticeships, training and the domestic skills pipeline.

These changes would retain the safeguards that underpin sponsorship while making the system work more effectively for businesses with the potential to drive future growth. However, they will only come about if SMEs engage more with UK government consultations on immigration and provide evidence to Migration Advisory Committee reviews.

For UK start-ups to become major employers, it is important that the business community and government come together to build an immigration system that is accessible to businesses while they are still building, rather than only after they have achieved scale.