What are Intra Company Transfers?
- Intra-Company Transfer (ICT) permits allow companies to transfer specialist or senior staff between countries temporarily.
- Rather than being used by multi-nationals, ICT permits are used in large numbers by outsourcing companies supplying low cost labour to UK companies.
- Unlike other types of work permit, ICTs are not part of the Government’s ‘cap’ on immigration.
- Unlike most work permits, companies do not have to check if a UK worker is available before filling a post with an ICT worker.
- Each ICT worker must be paid the “going rate” for the specific job they do, based on a list prepared by the UK Borders Agency.
- However, companies can make up this “going rate” with numerous special allowances.
- Complex rules govern these allowances. These lack clarity and IPSE members maintain this has left the door open for abuse and undercutting, leaving ICT workers underpaid and freelancers displaced.
- After IPSE lobbying, and as part of wider efforts to tighten the immigration system, the Government announced in April 2011 that ICT workers must earn more than £20,000 in salary if they stay for less than one year, otherwise they must be earning at least £40,000.
- However as of 2015 concerns remain that abuse continues, and IPSE continues to monitor this issue very closely.
- The Migration Advisory Committee (MAC) is investigating whether the rules on ICTs should be tightened and IPSE strongly supports such a move
- Sadly, the MAC have not recommended a large rise to the salaries that must be paid to those on ICTs.
No level playing field
- Freelancers in the IT industry allege they are finding themselves displaced by ICT workers. This is against immigration rules.
- ICT permits are clearly being used in ways far removed from their original purpose. Large IT outsourcing companies secure thousands of these permits at a time to supply workers to UK companies, rather than to transfer specialist or senior staff for their own use. The House of Commons Public Accounts Committee in 2011 found that two-thirds of all ICT permits go to the IT industry. IPSE's own data shows that this continues to be the case in 2015, with the biggest users of ICT permits being IT outsourcing companies.
- Tax-free allowances can be counted as part of an ICT worker’s salary. This can mean ICT workers cost less to engage than even a UK worker on the same salary.
- The complexity of the system means it is difficult to police. The Public Accounts Committee stated that The UK Borders Agency (UKBA) “does not have enough control over whether sponsoring employers comply with their duties and does not appear to know where the main risks lie.” It also stated that UKBA “does not have enough control over the ICT route”.
- Freelancers want a level playing field in the market for their services. ICT permits are designed to be a useful tool for businesses to transfer skills, not a way for large outsourcing companies to supply cheap IT workers to British firms.
IPSE Action: Raising Awareness
- The misuse and abuse of ICT permits is harmful to UK Plc. It damages the flexible labour market, and if the UK Borders Agency fail in their duty to ensure companies comply with the rules, it could result in the abuse of ICT workers, and the illegal undercutting of UK workers.
- IPSE ran a large-scale media campaign to raise awareness of abuses, appearing in national newspapers and on BBC Radio 4 and Five Live. This campaign was so successful it was shortlisted for the “Sector Representation Award” at the Trade Association Forum Best Practice Awards 2011.
- IPSE has extensively lobbied the government on this issue, including meeting with senior civil servants and MPs, responding to consultations, and supplying evidence to Parliamentary committees.
- Our manifesto, published in 2014, set out that government must act to ensure that independent professionals are not undercut by those on ICT permits. The minimum ICT salary must no longer include tax-free allowances and needs to be set at a high rate to ensure a level playing field. We want to make it much tougher to use ICTs beyond their intended purpose of providing specialist skills or receiving training.
- We also sit on the IT sector consultation panel, which reports back to the UK Borders Agency on issues affecting this sector. This means that government is aware of our concerns on this issue and we are being listened to.
IPSE Action: Policy Success
- The Government made significant and positive changes to the immigration system in 2011 which addressed many of the problems IPSE identified. ICT workers must now earn more than £40,000 if they are staying in the UK for more than a year.
- However, the House of Commons Public Accounts Committee has outlined failings in the enforcement of the rules by the UK Borders Agency.
- IPSE continues to lobby MPs, Government, and civil servants on the fact that abuses still occur within the ICT system.
- IPSE also sits on the IT industry’s ITCE sector panel, which helps feed into policymakers on immigration and skills issues in the IT Sector. This means IPSE’s voice is being heard at the highest levels of Government and industry.
- The situation for freelancers in the IT industry has improved significantly since the introduction of new rules by the Government, however we believe that more needs to be done.
- IPSE welcomes recent reviews of the immigration system by the Migration Advisory Committee exploring whether the rules on ICTs can be tightened and we have submitted evidence to these reviews.
- IPSE will continue to monitor the system and collate any evidence of abuses, and feed into Government policy-making where necessary.
Reporting ICT Abuse
IPSE strongly encourages anyone who thinks they may have been directly displaced or replaced as a result of ICT abuse to contact us using https://www.ipse.co.uk/contact-us . Please use “ICT ABUSE” in the subject line.