The UK self-sponsorship route allows skilled individuals to move to the UK by setting up their own business and sponsoring themselves for a Skilled Worker visa through that company. While not an official visa category, this pathway has become a popular option for entrepreneurs who want more control over their work and residency. However, with recent changes to immigration rules, the individuals considering the self-sponsorship route now need to meet increased salary thresholds if they have invested in the business.
Salary Calculation for Self-Sponsorship Route: Latest Update
To ensure that skilled workers with a Certificate of Sponsorship (CoS) assigned on or after 9 April 2025 remain eligible for sponsorship, including those requiring an extension of their current immigration permission, employers should take proactive steps to review their existing salary structures, including any deductions, loans, or investment arrangements. It is advisable to seek legal guidance at the earliest opportunity where uncertainties arise to ensure full compliance with the updated immigration rules.
The following new Immigration Rule applies to Skilled Worker applications supported by a Certificate of Sponsorship (CoS) assigned on or after 9 April 2025
“SW 14.2A. Any money paid by the applicant to the sponsor (or a related organisation) will be considered as follows:
(a) The following payments will be subtracted from salary, unless (c) applies:
(i) deductions from salary; or
(ii) repayments of loans; or
(iii) investments.
(b) Any such subtractions will be averaged over the length of time the applicant is being sponsored for the purpose of salary considerations.
(c) Money will not be deducted where the payment is not related to business costs, immigration costs or investment, but rather an additional benefit offer which the applicant has a genuine choice whether to take up, for example, salary sacrifice arrangements.”
These amendments aim to ensure greater consistency in how paid allowances are treated, minimise the risk of applicants shouldering the financial burden of their own sponsorship, and close existing loopholes that previously allowed individuals to contribute to their own salaries through investments in their sponsoring employer’s business.
While it is unclear whether the changes were specifically intended to target self-sponsorship arrangements, this route may have been inadvertently impacted by the updated rules. Previously, they could credit capital into the early stage of their business to cover start-up costs, which potentially include salary costs and so forth, but now the salary threshold has to be reworked based on the investment.
Impact of the New Rules on Self-Sponsorship Applicants
Following the recent updates to UK immigration rules, there is now greater clarity on how investments made by Skilled Worker visa holders, particularly in self-sponsored businesses, are treated. Under the revised guidance effective from April 2025, any personal investment made by a skilled worker into their sponsoring business must be declared and will be treated as a benefit, which can affect the assessment of genuine salary payments.
The Home Office has confirmed that such investments will be “averaged” over the duration of the visa sponsorship period and may be deducted from the minimum salary threshold required for compliance. For example, if a skilled worker invests £50,000 in a business and is sponsored for 5 years, the investment could be interpreted as a benefit of £10,000 per year. As a result, the business must demonstrate that the individual is paid at least £10,000 above the required salary threshold annually, purely from revenue or independent funds, not from their own capital investment.
This has significant implications for Skilled Worker applicants seeking self-sponsorship through their own companies. Businesses that cannot yet generate sufficient revenue to cover the full required salary from non-investment sources may struggle to meet the new salary criteria. External investment or revenue growth will likely be essential in the early stages of such businesses. Migrants applying from overseas face additional challenges, as demonstrating genuine employment and sustainable income without relying on personal funds can be difficult during the business setup phase.
Final Thought
Apart from the self-sponsorship route, there are other routes that some businesses can consider, as these routes might not require funds from the founder. Such routes include the Expansion Worker Route (if the businesses have operated for more than three years overseas), the Senior or Specialist route, and so forth.
The timely understanding of changes and acting accordingly is necessary for the self-sponsorship applicant to cross the hurdles smoothly. The experienced immigration solicitors in the UK, like City Legal Solicitors, can assist the applicants in the process.
Want to know more about the self-sponsorship route or need assistance? Contact us today @ 020 8175 4000 or email us at enquiries@citylegalsolicitors.co.uk for more information.
