Can I set up a business as a skilled worker? – A guide to supplementary work and self-employment
One the most common enquiries we receive from those already in the UK is:
“Can I set up a business while here as a Tier 2/Skilled worker?”
The short answer to this question is no. The slightly longer answer is that there are some very exceptional circumstances where it may be permitted but in most cases the answer will still be no.
The long answer on whether you can set up a business as a Skilled Worker
While here as a skilled worker you are subject to the following visa restrictions:
“[…]
(b) work is permitted only in the job the applicant is being sponsored for, subject to (c) to (e); and
(c) supplementary employment is permitted, providing the person continues to work in the job for which they are being sponsored […]; and
(d) voluntary work is permitted; and
(e) working out a contractual notice period is permitted, for a job the applicant was lawfully working in on the date of application; […]”
The relevant section to look at above when considering the legality of setting up your own business is (c). We then need to understand what is meant by the phrase “supplementary employment”.
Home Office guidance defines supplementary work as meeting all of the following requirements:
- “in either a job in Appendix Shortage Occupation List or a job in the same occupation code as the job for which the CoS was assigned
- no more than 20 hours a week
- outside the working hours covered by the CoS”
Let’s take each of these step by step.
Occupation code
You can identify your occupation code by reviewing your current certificate of sponsorship. Any supplementary work you do must be in that code or in a code on the shortage occupation list (which can be viewed here).
When assessing whether your role fits into an occupation code you must compare the job description to the example job descriptions for each code using the office of national statistics coding tool (available here). The occupation code will be the one that both meets more than 50% of your chosen code and is the closest fit to your role (where your role fits into multiple codes).
The problem people find when setting up their own business is that, unless you are working in an executive role already, the code that you are working in already will never fit into the same code that you would rely on as the director of a business.
This is because managing a business requires you to take on additional responsibilities as a managing director that will not fall under your existing occupation code.
20 hours per week
The other major problem here is working 20 hours per week. When working for another this, along with the occupation code, are very easy to prove. You will have a set number of hours, an employment contract, and your pay and payslip will reflect this.
When establishing your own business then this becomes much harder to prove and you would need accurate time recording systems in place to show that you have stayed within the 20 hours per week. You also need to be careful that you understand what would be included in these 20 hours which is essentially anything.
If you pick up an email for five minutes in the evening? This counts. If you make a quick phone call to resolve an urgent matter? This counts. Are you an educator planning lessons? This counts. Over time these small actions can add up into a considerable amount of time spent and could tip you over the edge of 20 hours without you realising.
If the Home Office were to challenge you, it would be very hard to provide evidence that you have complied with the rules. With proper representation you may be able to defend your position but this would both be costly and create a great deal of stress on your own personal position.
Given the consequence of the Home Office deciding you have breached the rules being the loss of your status in the UK and a potential ban on returning, the question we often put to clients is whether it is worth going down that path vs waiting until you have reached settlement.
Provided that you are legitimately staying on the right side of the rules, this is ultimately a personal and not a legal decision but an important one to consider.
Outside the working hours covered by the CoS
The supplementary employment can only take place outside of your day to day employment. This is less of a direct conflict with establishing a business but is still something to consider as a risk. Anything you do while during your office hours will constitute a breach of this requirement. As with the 20 hour limit, this would include actions such as sending emails, making calls etc.
Self-employment vs establishing a company
There is a distinction between setting up a company and being self-employed. As set out above, our view is very much that setting up your own company would be almost impossible (outside of a few small exceptions) without breaching the supplementary rules.
Pure self-employment is less black and white but our advice remains not to do it. There is no explicit ban on self-employment as a skilled worker, however, while you are more likely to remain in an appropriate occupation code, it is still extremely difficult to prove that you are remaining within the 20 hour limit of work undertaken per week.
For that reason we still strongly advise clients not to take the risk.
A note on curtailment
Supplementary employment is conditional on you continuing in the job you are sponsored to do. Therefore, if you resign from your role or you leave the job in the other way (such as redundancy or dismissal), you lose the right to undertake supplementary employment.
This is a common issue faced by those who have had their visas curtailed or are expecting curtailment. While this is a difficult situation to find yourself in, it is important that you do not take further employment until you have been sponsored by a new employer and received your new visa, otherwise you will find yourself in breach of the immigration rules which will only cause greater issues.
There is a very specific exemption to this requirement for GP trainees who are currently in the 4 month window after their training finishes. These workers can undertake supplementary employment, despite no longer being in the role they were sponsored to fill.
A note on ‘side hustles’
A related query we receive fairly often is people who work in more conventional roles wanting to make income of side hustles in areas where they have a passion.
Some real life examples we’ve seen of this are medical professionals looking to set up etsy stores to sell their arts or craftwork, office workers who want to monetise their Twitch streams or YouTube channels, and teachers wanting to make money off music they have created as a solo artist or in a band.
All of these would be breaches of work restrictions surrounding supplementary employment and the reasons largely reflect those set out above. This work would not fall into the same occupation code and it would be extremely hard to prove that all of the work involved fits into 20 hours per week.
It is better to avoid this entirely until you reach settlement. You can still practice these skills for when you do have more relaxed visa restrictions, you can still create content that you release or stream for free, but you must not take payment for it.
Advice on your Skilled Worker Visa
As you will see from this article, in 95% of cases it is not going to be appropriate to set up a business while in the UK as a skilled worker. However, we do recognise that there are some exceptional circumstances where your circumstances may fit into the exceptions set out above.
If you are establishing a business as a group, or you feel your circumstances fit into these exceptions, please get in touch with a member of our team and we can provide you with a quote for a package including:
- reviewing your existing SOC code
- reviewing the SOC code for your role in the new business
- advice for the processes that need to be implemented in the new business to ensure compliance
- advice for the evidence that the business should retain to protect your position if you were challenged by the home office.