Sponsor

Guys,

Has anyone accepted the workpermit on companies that sponsor them?I mean there are companies that will sponsor you a workpermit and you then go contracting/consulting for that company. they pay you a salary on what you get from contracting.
Has anyone done this? I have a workpermit , not HSMP,work in IT and thinking of moving to another company , and these companies that sponsor you and then can go contracting for them seems like a very good choice. Has anyone been in this situation or considered this?

Please let me know

thanks

I made this move to a WP sponsor and it has worked out quite nicely for me.

Initially I was onsite from an Indian Software Services company. Last year, a UK based consultancy company filed a work permit (for 5 years) under their name. Basically they have employed me and have placed me on a contract with their client.

They take between 13% and 19% margin, depending upon the rate from the client. But I have to pay the employer's NI. I dint have to pay for the WP processing or anything, and these people are pretty flexible with my salary structure and any documentation needs. It's run by a couple, who themselves are IT contractors. So they were able to understand my needs and concerns. End result = I am earning 70K, whereas earlier with Infosys (onsite) I was getting 38K.

This is bodyshopping and is technically illegal.

Why is it illegal? Most of IT senior positions are consulting positions. We could be hired by a company and sent over to the sites for consulting.

jayj wrote:Why is it illegal? Most of IT senior positions are consulting positions. We could be hired by a company and sent over to the sites for consulting.

That is called intra company transfer not bodyshopping if you are talking about for e.g. Indian companies

Then what is bodyshopping?

jayj wrote:Then what is bodyshopping?

Bodyshopping is when a recruitment company files a WP purely for IT staffing.

I am certainly not being body-shopped since my employer is a S/W dev firm which has both in-house and consultancy projects. And s/w development is being done in both India and the UK.

If the candidate is of the right calibre my employer is willing to file a Work Permit IF REQUIRED.

JavaGuy wrote:

jayj wrote:Then what is bodyshopping?

Bodyshopping is when a recruitment company files a WP purely for IT staffing.

I am certainly not being body-shopped since my employer is a S/W dev firm which has both in-house and consultancy projects. And s/w development is being done in both India and the UK.

If the candidate is of the right calibre my employer is willing to file a Work Permit IF REQUIRED.

If you are a bona fide employee of the company then why are you paying them a commision and why are you paying the employer's part of the NI contribution? These types of companies are just recruitement companies by another name. I think you will find that Work Permits UK would find it quite strange that you were paying the employers share of NI as this is a classic sign of being bodyshopped.

They take between 13% and 19% margin, depending upon the rate from the client. But I have to pay the employer's NI. I dint have to pay for the WP processing or anything, and these people are pretty flexible with my salary structure and any documentation needs. It's run by a couple, who themselves are IT contractors. So they were able to understand my needs and concerns. End result = I am earning 70K, whereas earlier with Infosys (onsite) I was getting 38K.

I'm lost, please explain, how do you, as an employee pay employers NI ?

The "business model" you stated is not uncommon here, but companies do not employ people on the basis of their percentage margin and ask employees to pay employers-NI voluntarily.
Of course, there are companies offering "fixed term packaged salaries" based on your contract daily rates and duration but I really doubt they are allowed to file WP for you, because, their operational domain and your skills(IT?) are unmatching.
Also, companies have to make their employers annual return which clearly accounts and audits the payment made for year (PAYE + NIC) on behalf of each employee. As an employee, you do not have access nor are you granted rights to override those payments made or going to be made.

It's run by a couple, who themselves are IT contractors.

As somebody already mentioned, from what you have explained, your case could be deemed as illegal. I don't know how they obtained you WP papers but its better to be safe than sorry. good luck !

JavaGuy, still there ?

Appreciate your concern vin. But you are just assuming the worst case scenario out of every point.

I get a basic salary every month whether I am billable or unbillable. When I am on bench, I am put on internal projects in the company's currency trading portal.

I get an additional amount by way of reimbursement of expenses incurred while providing onsite consultancy. This maximum amount of reimbursemnent is calculated according to the formula:

Max Reimbusement = X% of client rate MINUS NI.

They are not forcing me to pay the NI. I am just getting some extra cash, and NI is a internal factor in calculating this extra cash.

JavaGuy,

As I said earlier, its better safe to be than sorry.

The formula you have mentoned below deos not make any sense with respect to any standard company reimbursement policies.

If you are talking about something called HMRC's expense policies and "dispensation agreement" then you, as an employee do not benefit a single penny out of it. Only the employer (the company ) benefits so that they pay less corporation tax on the net income.
Most of the companies do their home work on the above so that they state their margin well in advance.

Forget all dodgy expense calculations and taxpayments, from your side, as an employee you need to make sure is you get paid a proper tax & NI paid amount which is your net salary.
A payslip and P60 would certainly help to stay out of trouble. Good luck. Once again.

JavaGuy wrote: Max Reimbusement = X% of client rate MINUS NI.

They are not forcing me to pay the NI. I am just getting some extra cash, and NI is a internal factor in calculating this extra cash.

Hi Guys

I hope I can clear this up:

1. On a WP you can not be bodyshopped. This means that you must be on a project based contract, but does not affect your pay terms.

2. The sponsor of a work permit must pay at least the salary declared on the permit. They can pay additional money eg bonuses on any grounds they please, which may include allowing for their NI costs (this is not quite the same as getting the employee to pay those costs)

3. If you have a project based contract and can bring it to a consultancy, you should be able to get a margin of no more than 22.5% INCLUDING the 12.8% employer's NI. (this is less than the 13-19% + 12.8% employer's NI quoted by JavaGuy)

Things to avoid:

A) Any form of 'bond' or up front fee (if the sponsoring consultancy is genuinely an employer they should be making their money from profit on the IT projects done for clients, not by charging their staff / prospective staff)

B) Punative penalty clauses on leaving. In this respect, anything beyond requiring PARTIAL refunds for training courses / disbursed costs is probably wrong. Good practice is that 1/12th of any such costs should be written off each month, so if you stay 12 months you repay nothing, if you leave after 9 months you repay 3/12ths etc.

C) Any structure which does not give you clarity.

D) Full support for transferring to HSMP / getting ILR.

E) A compliant contract process. Any company that will sign standard agency terms is almost certainly non-compliant which exposes everyone; particulary the WP holder whose permit can be revoked if the company is found to be unsuitable


At workpermit.com we have worked with several good consultancies, and have seen the debris left by rogue operators.

If you are considering such a move, feel free to drop me an e-mail and I can give feedback on any consultancy you may be considering, or suggest one if you have not got one lined up (or if the one you were considering is may be a rogue operator)