2000 IT Contractors in tax net
By Sumir Singh

Even as the Indian IT-ITES industry raked in revenues of $60 billion last year servicing USA and Europe, there was an inevitable backlash.  American and British techies, irate at losing their jobs, campaigned against the Indian IT workers who came over to take their livelihood.  American anti H1B and anti Indian sites like EndH1B drew huge readerships.

American techies and unions lobbied their politicians.  While not so vocal in UK, the British techies campaigned with equal determination.  By the end of 2009, the US and UK Government has tighten laws to stop Indian techies coming in easily.

The opponents of reduced outsourcing put forward two arguments – the first is that it is never good for any country to lose its technology edge and the second is that every country should employ locals over foreigners.  Implicit in this argument is the premise that citizens are loyal tax payers to the local Government.

Well, it seems that techies – Indian or foreign – are equally concerned about making a comfortable income while paying the least taxes permissible. And equally dislike the Taxman.

It seem that at least 2000 British tech contractors, even while opposing outsourcing to India,  were fudging their taxes by outsourcing their payments to tax havens. ContractorUK is reporting:

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Droves of IT contractors must have used an offshore scheme solely to avoid tax, because a “genuine commercial purpose” to such an arrangement does not exist. The verdict, issued yesterday by the High Court, effectively cues up HM Revenue & Customs to claw back £100million from UK residents, including 2,000 IT contractors.

Individuals on the scheme, provided by Montpelier, examined by Mr Justice Parker channelled their income through a trust that was not subject to UK income tax. Their incomes were also not subject to tax in the trust’s jurisdiction, the Isle of Man, because the income belonged to them - the scheme users, who were UK residents.

Self-employed IT worker Robert Huitson was one such individual who, despite being told by HMRC of a potential challenge, ducked £85,000 in income tax over 7 years.
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(Techgoss had reported the following on Dec 4, 2009)

UK ICT Visas: TCS and Infosys dominate
By Sumir Singh

London-based Association of Professional Staffing Companies (APSCo) was created on January 1, 2009 following the decision of the Association of Technology Staffing Companies (ATSCo) to admit members from other professional staffing sectors outside IT and engineering. Members of APSCo have an annual turnover of 6 Billion pounds.

APSCo is one of the most high profile HR firms in Europe with members who have deep pockets.  On Nov, 27, 2009 an APSCo annual charity ball raised 60,000 pounds for a children’s charity - ChildLine. APSCo uses the same clout to campaign against any misuse of the British working visas mainly used by Indian tech companies.  Last year, the British Government granted 30,000 ICT (Intra Company Transfer) Visas to non-EU tech workers to enter the country.

APSCo filed a Freedom of Information request with the British Government enquiring about details of such ICT Visas and has now released the results to the British media. ICTs were set up to import senior management or people with specific company skills. But like the H1B working visa in USA, there is some abuse of the system. Contractoruk is reporting:

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Almost half of the 30,000 foreign IT workers who last year entered the UK on Intra Company transfers came from just seven companies headquartered in India.

Figures from the Home Office show that of the 29, 240 non-European IT workers who came to the UK in 2008, 43% of them were sponsored by firms on the sub-continent.

The three lead users of the ICT scheme were Tata, Infosys and Wipro, who placed 13%, 9% and 7%, respectively, of the 12,573 IT staff that the Indian firms imported.

The remaining four outfits, who between them sponsored 15% of the total, were Cognizant, Tech Mahindra, Satyam and HCL.
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