Permitted Activity 7 (PA 7) under the UK’s immigration visitor rules is frequently relied upon by overseas companies sending employees to the UK to install, dismantle, service or repair equipment. On its face, it appears broad and practical. However, one aspect of PA 7 is often overlooked, and it can create real problems for subcontractors and after-sales service providers.
The key requirement
PA 7 allows overseas employees to carry out certain technical activities in the UK where there is a contract of purchase, supply, or lease with a UK company. This is relatively straightforward where the overseas company is the manufacturer or supplier.
More complexity arises under limb (b), which permits activities where:
“the overseas company is part of a contractual arrangement for after-sales services agreed at the time of the sale or lease”.
Why timing matters
The rules require that the overseas company’s role in providing after-sales services must be agreed at the time the original contract is concluded (“agreed at the time of the sale of lease”).
In practice, this means that the involvement of the overseas company providing after-sales services should, at a minimum, be clearly referenced in the main contract; ideally, that company should be a party to the contract. If an overseas subcontractor is brought in later, even under a separate agreement or annex, this may not meet the requirement.
It could be argued that the rules require only that after-sales services themselves are agreed at the time of the sale or lease, rather than the specific identity of the service provider. However, the Home Office caseworker guidance (“Visit guidance”, version 17.0) suggests a narrower interpretation. The guidance gives examples where PA 7 is likely to apply, including where services are delivered by another company within the same corporate group, or by a separate overseas subcontractor, but in both cases, only where that arrangement was clear at the time the contract of purchase, supply or lease was concluded.
This indicates that it is not sufficient for after-sales services to be contemplated in general terms; rather, the structure of delivery, including the involvement of a particular business (or at least a clearly defined category of provider), must form part of the original contractual framework.
Common problem scenario
At IMD, we frequently see situations like this:
- A UK company purchases equipment or machinery from a supplier
- The original contract makes no mention of a specific overseas service provider
- At a later stage, a subcontractor is appointed to carry out installation or maintenance
- The subcontractor’s employees then seek entry to the UK under PA 7
In these cases, UK border officials may take the view that:
- The subcontractor is not part of the original contractual arrangement, and
- Their role was not agreed at the time of sale or lease.
As a result, entry can be refused. Adding an annex or side agreement after the main contract has been signed does not necessarily resolve the issue. Following the wording of PA7, the border officers are likely to focus on whether the arrangement for after-sales services formed part of the original commercial deal.
Practical examples
Example 1
A German manufacturer sells machinery to a UK company. The sales contract includes a warranty clause stating that servicing will be carried out by the manufacturer or its nominated overseas partners. The overseas engineers should be able to rely on PA 7.
Example 2
A UK company buys equipment from a supplier. Six months later, it engages a separate overseas subcontractor to install and maintain the machinery under a new agreement. The subcontractor’s employees may not qualify under PA 7.
Key takeaways for your business
- Plan early: If overseas personnel will be needed, ensure this is built into the contract from the outset
- Document clearly: Identify the overseas service provider in the original agreement
- Avoid retrofitting: Later agreements or subcontracting arrangements may not satisfy PA 7
PA 7 is a useful route, but it is not as flexible as many assume. For subcontractors and after-sales service providers, the key issue is not just what work is being done, but when and how their involvement was agreed.
This article is for general information only and does not constitute legal or professional advice. Please note that the law may have changed since this article was published.
