Foreign workers in the UK could be in for a pay rise

A campaigner against abuses of the Intra Company Transfer scheme has provided me with some comment about some of the changes the government recently introduced to prevent abuse.

He outlines that the government has acknowledged that some ICTs are being under paid.

Here it is:

“The UK Border Agency announced changes to the tier 1 and tier 2 visa rules last Thursday. The new rules will come into force in April, and include changes which will affect both the offshoring of IT work, and the use of intra company transfer visas (ICTs) to bring in IT workers from outside Europe to client sites (onshoring).

One of the more unusual clarifications in the new rules is that companies should actually pay the stated salary on the ICT’s certificate of sponsorship. There have been many accusations made in the past that Indian IT workers brought in on ICT visas are underpaid by some companies and used to undercut UK IT workers. The UKBA appears to have uncovered such abuse.

The UKBA statement suggests companies have been using tax exemptions to multiply up net salaries to an artificial figure. The following is a rough example of how this might work: an ICT is paid net salary and allowances of £25k; this would be a gross salary of £31.5k if full income tax and employee national insurance were paid, and this is the artificially high figure put on the Certificate of Sponsorship; the ICT’s employer has a dispensation from HMRC to exempt part of the ICTs salary from tax, and only pays £3k income tax and employee national insurance. Therefore the ICT’s actual gross salary is £28k.

The UKBA are secretive about their dealings with sponsors, but, faced with the threat of losing their sponsorship licence, some companies may be forced to pay their ICTs more very soon.

There are only a few weeks left of this tax year, so some ICTs may be receiving a very welcome Easter bonus, and a big pay rise.”