Contractor-friendly reforms to ICTs agreed

Workers from outside Europe who use intra-company transfers to enter the UK on IT occupations must in future be paid at least £41,500.

In what represents a tightening of Tier 2 ICT rules, the Home Office said that only graduates would be exempt from the new salary threshold, which will take effect from April next year.

IPSE, the UK’s contractor body, is welcoming the move which was recommended by the Migration Advisory Committee. “[We are] pleased the government has acted”, IPSE said.

“For a long, long time we have been concerned that ICT permits are open to abuse from clients seeking to minimise their wage bill.

“Too often, IT contractors find themselves unfairly displaced as large IT outsourcing firms exploit the rules to bring in workers from overseas.”

To avoid exploitation reoccurring, it will be “essential” for the government to ensure they are “no loopholes” in the new rules around the salary threshold, says IPSE’s Andy Chamberlain.

“[We need] a sensible approach to fix a system which is simply not fit for purpose,” he said. [It should] level the playing field for independent professionals running their own IT micro-business.”

According to the government, there will be a transitional period until April 2017 for those affected by the threshold; IT firms headquartered in India for example, the biggest ICT users.

Before then, notably from autumn this year, all intra-company transferees will be required to pay the Immigration Health Surcharge – currently £200 a year for non-student applicants.

The Home Office also said that in line with the MAC’s recommendations, it would “consider” how to take forward the idea of a skills review for the UK’s IT sector.

But the minimum pay threshold for ICTs working in the UK for between five and nine years is due to fall (to £120K), and the one-year experience rule is to be axed on all ICT workers paid over £73,900.

“The government intends to have completed implementation of these measures by April 2017,” said immigration minister James Brokenshire. “As part of the implementation process, we also intend to simplify the Immigration Rules and guidance for skilled workers coming to the United Kingdom, to make the system clearer and more user-friendly for employers and applicants.”

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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