UK government clampdown on intra-company transfers will hit IT migration

UK government is seeking advice on proposals to reduce the number of workers from outside Europe in the UK, which could change the way Indian IT suppliers operate in the UK.

The UK government has told the Migration Advisory Committee (MAC) to examine proposals to reduce the number of workers coming into the UK from outside Europe. 

The move could result in a major cut in the number of Indian IT workers in the UK working on outsourcing projects.

A proposed increase in the minimum salary paid to staff brought to the UK by overseas suppliers – which could make it a less attractive option – will be fast-tracked by the government.

IT workers brought to the UK to work on contracts from overseas – from India in particular – use intra-company transfer (ICT) visas, part of the Tier 2 skilled worker category to work in the UK. This route means that, if the offshore parent company has a UK presence, it can bring workers to the UK for limited periods of time. 

IT staff from India comprise a substantial proportion of such migrants. For example, Tata Consultancy Services (TCS) – the biggest Indian IT services firm – has over 10,000 UK-based staff, but only employs about 4,000 British staff.

UK IT workers and campaigners claim this puts them at a disadvantage, because staff from India are paid less. The UK government sets a minimum pay threshold for migrant staff to try to ensure UK staff can compete on price. 

But allegations persist that suppliers manipulate this by including expenses in migrants' salaries and not paying tax on them in the UK. Migrant workers are required to possess skills which match those on a Home Office list, which are in short supply in the UK.

Read more about intra-company transfers

Tata Consultancy Services’ use of intra-company transfers (ICTs) is in the spotlight in a UK court battle

The number of overseas workers entering the UK on intra-company transfers (ICTs) has increased since the government introduced its cap on immigration.

Indian IT services supplier Infosys has agreed to pay $35m to settle a visa dispute with US authorities.

If approved, the government’s proposed changes will raise minimum salary thresholds, reform the skills shortage list and add a charge for ICT visas for investment in developing UK homegrown skills. Although the MAC will advise the government on most proposals by the end of the year, the government has asked it to fast-track the issue of raising salary thresholds in time for the Autumn immigration rule changes.

Prime minister David Cameron said: “This government is on the side of working people: In the past, it has been too easy for businesses to recruit from overseas, undermining those who want to work hard and do the right thing. As part of our one-nation approach – pushed forward by my Immigration Taskforce – we have asked the Migration Advisory Committee to advise on what more can be done to reduce levels of work migration from outside the EU.”

According to freedom of information requests from website BackTheMac – a lobbying group that campaigns against purported abuse of ICT rules – there were 35,565 ICT employees in the UK from India, out of a total of about 60,000, in December 2014.

IT workers account for a large proportion of the ICT numbers. In December 2013, for example, at the top of the profession alone there were over 12,000 IT software professionals, nearly 6,000 programmers and software development professionals and just under 5,000 IT business analysts, architects and systems designers.

Read more on IT outsourcing