Firms hiring non EU workers may face 1,000 pound surcharge in UK

Companies in the UK hiring non- European Union workers like Indians are expected to face a new 1,000 pound annual surcharge per employee.

The UK’s Migration Advisory Committee (MAC) used the Indian information technology sector as an example in its latest set of recommendations to call for a review of the country’s intra-company transfer (ICT) route under the UK Tier 2 visa regime.

“(Immigration) is not serving to increase the incentive to employers to train and upskill the UK workforce. Ready access to a pool of skilled IT professionals in India is an example of this,” the MAC report said in its findings.

“We did not see any substantive evidence of long-standing reciprocal arrangements whereby UK staff are given the opportunity to gain skills, training and experience from working in India,” it said.

The new up-front charge of 1,000 pounds for each skilled non-EU migrant will apply per year, so a three year visa would carry a surcharge of 3,000 pounds for each employee.

MAC believes by increasing the cost of hiring from abroad, the new surcharge would encourage employers to invest in training British workers instead.

A UK Home Office spokesperson said, “We are grateful to the migration advisory committee for its report. We are considering its findings and will respond in due course.”

As part of a series of measures to cut employee numbers under the Tier 2 system by 20 per cent a year, the committee also recommended the salary threshold for these workers entering Britain be raised from 20,800 pounds to 30,000 pounds.

Its recommendations are expected to be adopted by the government soon.

According to MAC data, Indian skilled workers were given the largest number of visas under Tier 2 in the year ending September 2015 and Indian IT workers accounted for 90 per cent of visas issued under the ICT route.

The committee noted that “some of the heaviest users of the intra-company transfer route are Indian companies, and the top ten employers using the intra-company transfer route are all largely employing IT workers from India”.

“The evidence indicates that multinational companies with a presence in India have developed a competitive advantage in delivering IT projects in the UK. They have developed a delivery model, whereby significant elements of projects are delivered offshore in India, taking advantage of the fact that Indian salaries are lower than in the UK for equivalent workers,” it said.

“Indeed, partners told us that India currently has a competitive advantage in training IT workers and in the time it would take to fully upskill the native population, technology would have moved on,” the committee said.

The MAC noted this was unique to the IT sector.

“We are aware of the announcement that the British Council and Tata Consultancy Services will provide one-year internships for 1,000 UK graduates between 2016 and 2020. But on the basis of the evidence we received, the traffic looks one-way at the moment,” it stressed.

The UK government has ordered a crackdown on skilled labour from outside the EU in the face of record net migration figures of 336,000 to Britain in the 12 months to June last year.

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