Company transfers exempt from migrant cap - Cameron

[TimberWolf]

Companies transferring foreign workers will still face limits - Telegraph

Foreign workers wanting to use an immigration loophole that allows companies to transfer staff from abroad will have to earn above a certain salary, the Home Secretary will announce today.

We'll have to see the details of this to see whether it's just smoke and mirrors and not much different to the current situation, or indeed allows even more to come.

[AtW]

Salary should be the limit - £50k+ and most ICTs won't happen in the first place, and those that do are actually worthwhile doing.

[TimberWolf]

FT.com / UK / Politics & policy - May pledges lower immigration cap for 2011

There will also be some limits on intra-company transfers, including requirements that workers coming over from the overseas offices of multinationals will need to earn at least £40,000 or £50,000. Ministers hope this will stop Indian IT companies from using the route to bring in thousands of cheap staff.

Will this make any difference in practise? That is, it will be the same as now with the bulk of that £40K being made up of living expenses and other tax dodges?

[TimberWolf]

What about all the intra company transferred Indians already here, are they allowed to stay forever?

[AtW]

Will this make any difference in practise?

It will so long as salary rate is enforced effectively.

[TimberWolf]

It will so long as salary rate is enforced effectively.

What was the previous lower salary limit? And what happens to those Indians bought over before the rules changed? Do they suddenly get a salary boost? I suspect no, in which case, given we are full to the gunnels, it's business as usual.

[AtW]

What was the previous lower salary limit?

I don't think there was for ICTs, but I have not been too deep into this for at least last 5 years since I got my perm residency.

[CheeseSlice]

What about all the intra company transferred Indians already here, are they allowed to stay forever?

The ones I've spoken to already in the UK are usually on fixed 1-2 year visas and have to leave once lapsed. They often go back to India for a few months and then return to carry on.

Rinse and repeat.

[MrMark]

New Labour despised UK IT Contractors.

The Con-Dems simply don't give a tulip about them.


HTH

whatever the spin, it's a case of "Meet the New Boss - same as the old Boss"

[TimberWolf]

The ones I've spoken to already in the UK are usually on fixed 1-2 year visas and have to leave once lapsed. They often go back to India for a few months and then return to carry on.

Rinse and repeat.

One third stay according to a Home Affairs Committee Report and no doubt that is the tip of the iceburg.

a third of those entering under the intra-company transfer route did remain in the UK via other routes.

As for salary, this was defined as "a reasonable level" previously I gather, so there is some change there. Maybe.

Typically the salary clocks in at £24,000. Adding up visa costs, flights, accommodation and salary should if anything make using an intra company transfer rack up the expenses tally. It doesn't look profitable. Until you realise expenses and tax free allowances can be counted towards the "salary". As a source tells TechEye: "This is complete madness."

IT service companies with the resources can negotiatie with HM Revenue & Customs blanket tax free payments and allowances which cover legitimate business expenses that employees incur having worked at a client site for the first two years. Because these are not salary payments, the HRMC considers them tax free and it means every employee doesn't have the burden of sending in receipts which must then be counted and tallied. The tax free allowance dispensation can be between roughly £1,000 and £1,500 each month.

So if these consultants are on-shore Indian IT workers, they can be sent to client sites. They can be paid a minimum wage salary and grab a tax free allowance of up to £18,000. As a friend of TechEye puts it: "The UK Borders Agency rules are passed, their Indian IT workers are happy, and they can significantly undercut UK workers, void UK income tax and national insurance, both employer and employee."

Indian IT workers on an intra company transfer visa pay very little tax and national insurance. By comparison a UK worker would pay a lot - the system is cutting its nose off to spite its face. Employers using temporary foreign workers gain a strong competitive advantage over local workers. This was noted by the Migration Advisor Committee in a report last August. It stressed the loophole leaves the system, and the UK, wide open to abuse.

Read more: Comment: UK Big Business exploits visa loophole to decimate IT jobs - Onshoring abuse continues as Cameron ponders immigration cap | TechEye