Contractors pleased about recommendations to overhaul ICTs
A review of Intra Company Transfers, the first of its kind, has brought potentially good news for contractors who may have fallen foul of the way the system has been organised thus far. Evidence has been presented to the Migration Advisory Committee to support the fact that many IT companies and their workers have been disadvantaged by the way third-party contracting has allowed British IT workers to have their pay undercut.
The recommendations of the report make provision for multinationals who want to bring staff in to the UK to service contracts that they have won, and one of the most important aspects to the proposed changes are the introduction of a salary threshold for those who are included in the scheme. This would mean that workers who come to the UK from overseas would have to be paid more than this to comply with the regulations, which would affect around 25,000 people every year.
Currently, it appears that firms are importing skills at around the minimum wage level, suggesting that the workers being brought into the country are not providing a high quality service which exceeds that which would otherwise be available from home-grown staff. While the firms who are bringing overseas workers in claim that they average eight years’ experience and are being paid wages in excess of £60,000, the MAC found that this was not necessarily the case. Using the rates that these workers are commanding as an indicator of the degree of specialism, the MAC believe that far fewer ‘expert’ professionals are being brought in than previously believed.
The fact that companies are able to circumvent the regulations which are supposed to ensure that only highly skilled workers can be brought into the country to fulfil roles in the IT sector is one of the major factors considered by the MAC. They also believe that a study of the skills shortage situation and the effect that has on immigration is needed to ascertain the scope of the problem and ensure that measures put in place to tackle it aren’t damaging to the prospects of the native workforce.
If you want to know more about how much you would earn as an IT contractor, then our take home pay calculator is perfect for ascertaining your potential income should you decide to go it alone. We also have a range of handy guides including one which will give you an idea of the level of contractor tax you can expect to pay as an independent professional.
For more help and support from a qualified and experienced professional, speak to one of our accountants today on 01442 275789 or email email@example.com.