As covered in our alert back in October 2020, the Migration Advisory Committee (MAC) has been commissioned to review the Intra-company Transfer (ICT) category. The MAC advises the UK government on immigration policy.
The online survey has easy to complete multiple choice questions and closes on 15 June 2021.
The ICT category
As licensed sponsors will be aware, on 1 December 2020 Tier 2 (General) and Tier 2 (ICT) were replaced with the Skilled Worker and ICT categories respectively.
Traditionally, the ICT category has been extremely popular for international corporate groups. An employee of a group company outside the UK can be sent to work at the UK group sponsor on a temporary basis.
This survey represents a chance to share your views on the future of the ICT category and how it can be aligned to your business and industry sector.
Our views on the survey’s key themes
To aid your business in responding to the survey, the key themes/questions in the survey are set out here alongside our own thoughts:
Use of the ICT category
Since 1 December 2020, much of the appeal of the ICT category has been lost. Tier 2 (General) applications were not user-friendly given the difficult and time consuming process of advertising for the Resident Labour Market Test (RLMT). The RLMT no longer applies to Skilled Worker applications Time as a Skilled Worker counts towards Indefinite Leave to Remain (ILR), whereas time as a ICT worker does not.
As a result, you may have found you are less inclined to use the ICT category. Our view is that ICTs still have a purpose in some scenarios, including for example where the employee does not speak English (as set out below).
When Skilled Worker replaced Tier 2 (General), the basic salary threshold was reduced to £25,600 (or the going rate for the role). For ICTs there was not a reduction and so the basic Tier 2 (ICT) minimum salary threshold still remains high at £41,500 (or the going rate for the role). Even where sponsors would like to use the ICT category, they may find this minimum salary level prohibitive, especially compared to the lower Skilled Worker salary requirement.
Our view is that the basic salary threshold should be lowered to the same amount as for Skilled Worker applications. Do you have staff outside the UK who you would like to rotate into the UK but you can’t because of the high salary threshold?
The cost of an international company doing business in the UK already includes needing to apply for and maintain a sponsor licence and effectively paying a £1,000 per year of the visa tax in the form of the Immigration Skills Charge. Having to meet the high ICT salary thresholds on top makes it even less palatable.
Unlike the Skilled Worker category, ICT applicants are allowed to include certain allowances towards the required salary threshold – a benefit of using ICTs. However, the allowances must be guaranteed to be paid for the duration of the UK employment or be paid as a mobility premium to cover the additional cost of living in the UK.
The survey lists out those allowances which are not acceptable, including for example additional pay such as shift/overtime/bonus pay (whether or not this is guaranteed), “golden hellos” and payments to cover business expenses including for travel and subsistence. Like us you may feel that some of those allowances should be capable of contributing to the salary threshold. In particular, the inability for even guaranteed annual bonuses to be included seems unfair. You may also budget for paying benefits/allowances on top of a basic salary amount because of tax and social security issues for intra-group secondments.
In keeping with the salary thresholds, the Tier 2 (General) RQF level 6 threshold was reduced to level 3 for Skilled Worker applications. That has not been the case for ICTs for which the sponsored role must still be at level 6. This is unhelpful for ICTs given many roles considered to be of a lower skill level will not qualify.
For example, across all industry sectors there are important lower-mid skill level roles that would not currently qualify for an ICT visa. Thinking about your business, are there roles for which you would have brought in one of your employees from group offices outside the UK but have been unable to do so?
In the hospitality sector, hotel and accommodation managers and restaurant and catering managers would not qualify. In the scientific sector laboratory technicians do not qualify and in engineering/tech electrical technicians and engineering technicians would not qualify. In IT, operations and user support technicians fall short and in the legal sector it’s the same for legal associate professionals (including paralegals). In finance, financial and accounting technicians, buyers and procurement officers, business sales executives, marketing associate professionals, insurance underwriters and human resources and industrial relations officers all do not qualify.
There is a strong case for lowering the skills threshold to level 3 for ICT applications, as it is for Skilled Worker.
English language requirements
A key advantage of the ICT category is that there is no English language requirement. ICTs are often submitted by international IT companies which require specialist knowledge and experience of the software products being sold and installed in the UK. For such roles there is not necessarily a need for strong English language capability.
Length of service with overseas group company
Unless the salary for the UK ICT sponsored role is £73,900 or above, the employee must have worked for the overseas group company for at least 12 months. The policy around that is presumably a view it takes that long before an overseas group employee can be considered sufficiently useful for the UK sponsor. Is that your experience? We would expect it does not take 12 months for the person to have specialist skills and experience about the products and services of your business and that the length of service requirement could be considerably lower.
Ability to apply for ILR
Unlike Skilled Workers, ICTs do not lead to ILR. Additionally, the current ICT rules only allow the employee to stay for 5 years in a 6-year period, or 9 years in a 10-year period if the UK salary is £73,900 or above. As a result, normally your sponsored ICT workers will need to leave the UK after a maximum of 5 years.
Would it suit your business better for the residence limit to be dropped and for ICTs to be considered for ILR? Alternatively, it could be that your business appreciates that ICTs do not lead to ILR because it means that when your staff are seconded to the UK on a temporary basis they are more likely to return.
Is there a better alternative to the ICT category?
The concept of ICTs is found in the WTO’s General Agreement on Trade in Services. On the international stage the UK needs to have a workable ICT category and it is hoped that the MAC consultation will assist in updating it to make it more useful for international companies.
Often ICTs are about providing a service to a client in the UK, for example to work on the integration of software and tech. We suggest this could be done through a new service provision model, without the need for a UK sponsor. The EU-UK Trade and Cooperation Agreement represents a missed opportunity for a beneficial services provision across the EU in the form of the Contractual Service Providers option which in the UK still requires a UK sponsor. The same applies to the UK Japan Free Trade Agreement.
The MAC’s consultation also addresses the rules around companies based outside the UK who wish to set up in the UK for the first time. We appreciate the majority of our UK based clients will already be established in the UK. But please do give some thought to the proposals in that regard. Currently, the representative of an overseas business (or sole representative) category only allows for one senior employee of an overseas company to come to the UK to establish a business. Your UK business may have started using that route. The consultation considers whether there should be a new Global Business Mobility visa which allows a small team of personnel to move to the UK and set up operations. Such a rule change would make the UK a more competitive place in which to do business. Only allowing such visas where a high value contract exists would in our view be arbitrary and unhelpful to UK businesses which may otherwise flourish.
Sharing your views with us
We hope you will respond to the survey to make your views known to the MAC. We would also appreciate it if you are able to share your answers with us. We will be responding to the MAC with our own views and would like to refer to your thoughts and experiences on an anonymous basis. When you reach the end of the survey and click on “finish survey”, the next screen gives you an opportunity to select “print response” which you can save as a pdf and send to us.