Committee of Public Accounts

House of Commons 7 Millbank London SW1P 3JA

Tel 020 7219 3273 Fax 020 7219 2782 Email pubaccom@parliament.uk Website www.parliament.uk/pac

 

 

 

 

20 April 2011

 

Gary Burgess

 

By email to argiebee@gmail.com

 

 

Dear Mr Burgess

 

THE UK BORDER AGENCY: INTRA-COMPANY TRANSFERS AND ALLOWANCES

 

Thank you for your emails of 30 and 31 March 2011.

 

You were concerned that workers coming to the UK under the Intra-Company Transfer route could be paid less, after allowances, than the National Minimum Wage.  The Written Answer by Baroness Neville-Jones on 30 March 2011 confirmed that this has been the case, with the UK Border Agency granting visas in this situation in some 200 cases in both January and February 2011.

 

As you noted, the Home Office has introduced from 6 April 2011 new salary levels for the Intra-Company Transfer route so that those coming to the UK for over a year have to be earning over £40,000 and those coming for a year or less have to earn a minimum of £24,000.

 

Following my Committee’s hearing on 28 March, the Home Office told us that, in assessing applications against the new minimum salary levels for Intra-Company Transfers, it will only accept allowances for accommodation up to a maximum of 30 % of the total salary package for those staying for over a year and 40 % for those staying for 12 months or less, the higher rate reflecting the higher costs of short term accommodation.  This would mean that the minimum salary a worker could receive after accommodation allowances would be 60 % of £24,000 or £14,400.  It is possible for other allowances for the additional cost of living in the UK to count towards the minimum salary level, but these have to be included as part of a guaranteed salary package.

 

The National Minimum Wage for workers aged 21 or over is £5.93 per hour rising to £6.08 from October 2011.  For an individual working for 40 hours a week, this would equate to a salary of £12,334 per annum, rising to £12,646 from October 2011.  Where employers provide accommodation, they are allowed to deduct an accommodation off-set of up to £4.61 a day or £32.27 a week.

 

On the basis of these figures (the minimum salary level of £14,400 compared with the current National Minimum Wage of £12,334), the new arrangements should mean that the UK Border Agency does not grant visa applications for workers using the Intra-Company Transfer route earning less than the National Minimum Wage.  In addition, the Home Office witnesses stated, during the Committee’s hearing, that the independent Migration Advisory Committee would be reviewing this route annually so that the Home Office will be able to take action if abuse of this route is identified.

 

I hope this is helpful and thank you for taking the trouble to write to the Committee.

 

Yours sincerely

 

 

 

 

RT HON MARGARET HODGE MP

Chair of the Committee