Umbrella Companies | Will ICT rules benefit umbrella company contractors?

Will ICT rules benefit umbrella company contractors?

The annual immigration cap came into force earlier this month and the REC has warned that the use of ICTs needs careful monitoring.

The intra-company transfer exemption is designed to make sure that highly skilled workers from out with the European Union can come to the UK for a limited time in order to share their expertise within a company. That worker has to be paid a salary of least £40,000, must leave the UK within 5 years and has no right to permanent settlement.

However, there are concerns that without strict monitoring, companies will bring in foreign IT staff to do jobs for a lower salary than they would pay a resident worker.

REC members have reported that some companies have tried to bypass the rules by including allowances for accommodation in salary calculations or paying an employee’s PAYE contributions as a job-related benefit. Both of these methods inflate a reported salary in order to meet ICT qualifications.

Jeff Brooks from the REC said that the ICT exemption is sensible in so far as it brings flexibility to the immigration system. However, if it is not properly monitored, unscrupulous employers may abuse the system. The minimum salary requirement must be strictly enforced to make sure firms do not falsify salaries.

There are a lot of highly skilled IT contractors in the UK and they must have a level playing field on which to compete for jobs. In recent years, two-thirds of the people coming to the UK under the old ICT visa scheme were IT workers and the majority of them came from India.

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Image: Nanagyei by Loom’in Cuts

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