Review of the Intra-Company Transfer route 2021

Oct 15, 2021

The Migration Advisory Committee (MAC) were asked to undertake a review of the Intra-Company Transfer route back in September 2020.

They were also tasked with helping to design the new mobility offer to enable overseas businesses to send teams of workers to establish a branch/subsidiary or to undertake a secondment in relation to a high-value contract for goods or services and to advise on where the Home Office should set any criteria on the eligibility of workers.

The MAC has finished its review and published a summary on 13 October 2021.

The Intra Company Transfer (ICT) immigration route

The ICT route exists alongside the Skilled Worker route within the current points-based immigration system. It allows international businesses to move existing key employees, such as senior managers or specialists to their UK branch or head office.

Deployment is permitted on a temporary basis when there is a specific business need and the following conditions have been met:

  • The employee has worked for the sending organisation for at least 12 months prior to date of transfer (3 months for Graduate Trainees),
  • Are highly skilled at RQF level 6 or above, and
  • Meet the minimum salary requirement of £41,500/year for ICT and £23,000/year for an ICT Graduate Trainee.

Although, this route was designed for intra-corporate mobility of key personnel, there is some overlap between the ICT and the Skilled Worker route.

Certain advantages that the ICT route offered in comparison to the old Tier 2 (General) route that existed before December 2020 are no longer present under the Skilled Worker route, however the following advantages of using the ICT route remain:

  • There is no English language requirement
  • Some allowances, in particular housing costs, can be included in the assessment of the salary threshold
  • The multiple-entry aspect of the visa allows more flexibility of the time spent in the UK over the duration of the visa
  • The salary threshold must be met only when working in the UK rather than throughout the validity period of the visa.

The visa costs under the Skilled Worker and ICT route are the same, though there is reduction for SW roles on the shortage occupation list. Not applying the Immigration Skills Charge (ISC) to the ICT route has previously been considered by the MAC, but it was decided that it should apply, given that ICT workers could displace UK workers.

As part of the UK’s free trade agreement with the EU, the UK will exempt EU ICT workers from the ISC from no later than 1 January 2023.

Given the limited advantages of the ICT route, the MAC expect to see displacement from the ICT route into the Skilled Worker route, which has a lower skills and salary threshold. 

Review of the Intra-Company Transfer route 2021

compiled by Judit Adorjan – Immigration Consultant

Evidence and research that supported the review of the Intra-Company Transfer route 2021

As part of the Call for Evidence (CfE) that was launched on 23 March 2021 and closed on 22 June 2021 the MAC has received 68 responses to the questionnaires from large users of this route. 11 organisations submitted further evidence either as part of their CfE response or directly to the MAC secretariat.

In addition, the MAC has also engaged with a wide range of stakeholders from the UK, including the 4 largest users of the ICT route, commissioned qualitative research with users of the ICT route and undertook analysis of relevant datasets.

Key findings and recommendations for the ICT route

The review of the Intra-Company Transfer route has revealed two distinct uses, a conventional and a contractor route.

Under the conventional route employee can work for the sponsor organisation within the UK, whilst the contractor route allows employees to carry out work for a third-party organisation whilst still being employed by the sponsor.

In 2019, a large portion the ICT visas (63%) were granted under the contractor route. The IT sector made up 81% of overall ICT contractor usage in 2019.

97% of ICT contractor visas were issued to Indian nationals.

The MAC recommended the skills and salary threshold to remain at RQF level 6+ with the ‘going rate’ thresholds continuing to be set as now (25% of occupation specific earnings). It has also been suggested that the graduate trainee thresholds are aligned with the SW route.

The salary threshold for the ICT route should be set at the median annual gross wage of occupations which are RQF6+ using data from the Annual Survey of Hours and Earnings (ASHE). This is currently £42,400

All thresholds for the ICT and other work routes have been recommended to be updated annually.

The high earner threshold of £73,900 remains the same but should be updated annually in line with all other thresholds. Those who meet this threshold are not required to have worked for their overseas employer for any length of time before obtaining a visa. Furthermore, migrants earning above this threshold can stay in the UK for 9 years out of a 10-year visa.

A concern has been expressed regarding the treatment of allowances. There is limited data available, and it seems there is no mechanism to ensure that values stated are in fact paid in practice. There is no cause for concern where allowances are paid as additional guaranteed salary and the migrant is free to spend it as they please. However, there are potential risks associated with employers providing physical accommodation on the condition that the migrant pays a certain amount for it. Migrants can end up paying above market rent for accommodation that they cannot choose, or employers may overstate the value of the accommodation. Also, some allowances for housing are tax exempt depending on arrangements between individual firms and HMRC. Therefore, it has been recommended that the Home Office collects and monitors data to check compliance with the current rules.

Since January 2021 it is possible to switch in-country from the ICT into the Skilled Worker route. Whilst there is no direct route to settlement, ICT workers can switch and settle on the Skilled Worker route. This could disadvantage the original sponsor and lead to issues of job retention and delays in fulfilling client contracts. Since this provides greater mobility for the employee, a bargaining power and more competitive labour markets the MAC has not recommended any changes to the rules on switching.

The ICT route is intended for temporary workers. It doesn’t offer a path to settlement in the UK and time spent under this route does not currently count towards permanent settlement. However, it is difficult to determine whether a 5-year stay including dependant children who attend school could be considered temporary. Intentions to settle may change over time. Given that ICT migrants make a meaningful contribution to the UK economy through taxes, skills and services the MAC considered they should be afforded the same access to settlement as those on the Skilled Worker route. Furthermore, time spent on the ICT visa should also count towards settlement if the worker does switch into another route.

There are no guarantees that the government will accept these recommendations, but we should not have to wait long to find out.

Intra-Company Transfer Route Advice from UK Immigration Law Experts

For more information on any of the topics raised in this blog, please contact our Intra-Company Transfers lawyers for advice by calling 01235 841 568 or completing the contact form.