Migration Advisory Committee publishes review of the Intra-Company Transfer category

Background

Ever since the Home Office published the detail of the Skilled Worker category back in late 2020, the Intra-company Transfer (ICT) route has seemed increasingly redundant. In replacing the old Tier 2 (General) category the Skilled Worker route became simpler and easier to use, and the abolition of the resident labour market test removed the ICT category’s key selling point. As a result, many of the big users of the ICT category have been, quite fairly, questioning why they should keep relying so heavily on the ICT category to meet their global mobility requirements when the Skilled Worker category affords them greater flexibility, and significantly greater employee satisfaction as it offers the holder the chance to apply for settlement in the future.

The Home Office therefore tasked the Migration Advisory Committee (MAC) to conduct a review of the ICT category and make a number of recommendations, and the MAC dutifully published its findings on 13 October.

The Current State of Play

The ICT category sits alongside the Skilled Worker category as one of the two primary routes for employers who want to hire skilled workers from outside the UK who need sponsorship. The category is specifically designed to enable businesses to move senior and highly skilled members of staff from overseas offices to the UK for secondments and assignments, and is one of the requirements for members of the World Trade Organisation (WTO) under the General Agreement on Trade in Services (GATS).

Historically the ICT category has been very popular with international businesses as it used to be significantly easier to obtain an ICT visa compared to the old Tier 2 (General) category; however with the introduction of the new Skilled Worker category this is no longer the case. Indeed, the following table sets out the key differences between the two categories;

As the table shows the only advantage to the ICT category is that there is no need to meet the English language requirement, meaning that the candidate will be ready to apply for their visa significantly quicker and the application process will be less complex. The natural reaction is to therefore dismiss the ICT category as a thing of the past and to start using only the Skilled Worker category – why would an employer keep using a visa category that is significantly more restrictive than another one which they can also use?

The answer to this is a complex one and is one of the fundamental reasons for the need to reform the ICT category.

The Compliance Conundrum

Every business has faced the same question at some point – meticulously follow the rules and risk losing your competitive edge, or push the boundaries and risk getting on the wrong side of the regulator. The same principle applies with global mobility strategies and in the UK this particularly pertinent when it comes to how salary data is reported on visa applications.

From the employers perspective one of the key reasons to use the ICT category is because ICT visa holders only need to be paid at the level required by the rules whilst the visa holder is physically present in the UK, whereas Skilled Worker visa holders must be paid at the level required by the rules for the entire duration of the visa. For companies that frequently move staff around the world this makes the ICT route the natural solution for internationally mobile staff as it means that they are not committed to paying artificially inflated salaries when the individual is not in the UK. Also, under the Skilled Worker category, allowances typical of temporary assignments such as a cost-of-living allowance cannot be counted towards the pay level required by the rules. However, as the ICT category is designed for temporary assignments these types of allowance can count towards the pay level required by the rules. As such, for companies trying to remain compliant with the immigration rules they are fundamentally locked in to the ICT category due to the fact that large percentages of the total salary package are often made up of allowances that are not permitted under the Skilled Worker category.

And herein lays the MAC’s challenge - The attractiveness of the Skilled Worker category has put many businesses in a position where the temptation to falsely declare salary information in order to make use of the Skilled Worker category will be very real, and they will want to use the Skilled Worker category for roles that are fundamentally not compatible with the rules. The temptation is enhanced by the fact that the threat of enforcement action by the Home Office is lacklustre and has been so for many years.

The MAC’s recommendations –big carrot, small sticks

In attempting to address this compliance conundrum the MAC has struck a balanced tone in its recommendations. It has resisted calls to lower the skill and salary thresholds and recommends greater enforcement of allowances, however it is also recommending that the ICT route provides a direct path to settlement and that the Home Office puts in place new routes to facilitate secondments and short term assignments.

The MAC’s key recommendations are as follows;

1. Maintain the current skills threshold of RQF level 6
2. The salary threshold should be set at the median gross wage of occupations which are RQF level 6. This is currently £42,400, and the threshold should be updated annually
3. The Home Office should take steps to enforce the requirement for sponsors to provide a complete breakdown of allowances that are paid, and should consider what further monitoring of the breakdown of allowances is proportionate
4. The ICT route should provide a direct route to settlement after 5 years residency in the UK, and any time spent in the UK under the ICT category should count towards settlement if the worker has switched into another route
5. A new ‘secondment’ route should be established for high value contracts in excess of £50 million
6. The Home Office should consider how to better facilitate short term assignments given the fact that the current options are either costly and administratively burdensome, or far too restrictive to be of any value

Conclusions

If the Home Office adopt the MAC’s recommendations (which I believe they will), the carrot of settlement and the stick of increased enforcement should be sufficient to encourage the biggest users of the ICT category not to make a wholesale shift towards the Skilled Worker route, a shift which would put them in a very risky compliance position as explained above. Compliance is the foundation of any successful global mobility programme, and whilst it is clearly important for businesses to at least have the right intentions, it is just as important that the Home Office provide an immigration system which is attractive to sponsors but also carries enough of an enforcement threat to be taken seriously.

Many of the bigger users of the ICT category will be disappointed that the MAC is not recommending reducing the skill or salary thresholds, however as they say in the report the MAC believes that;

‘The ICT route should be distinct from the Skilled Worker route and… be aimed at senior managers and specialists with an appropriate salary threshold to match this level’

This is perfectly reasonable position to take and is echoed in the GTAS, however unfortunately this sentiment is not reflected in how the ICT category is actually used by the biggest users of the system.

The ICT route is an essential tool that allows many businesses in the UK to deploy highly skilled professionals at a volume that would not otherwise be capable within the UK. The net result of the ICT category is that businesses of all size, including government departments, are able to access high quality services, specifically in the IT sector, which can be deployed at speed and at scale. Without the ICT category the UK would face drastic shortages in a number of critical sectors, therefore it is important that the Home Office does everything they can to support businesses in staying compliant and making the UK an attractive destination for their highly skilled employees.