Spiralling numbers of non-EU migrants are entering Britain by exploiting a 'gaping loophole' in the system, a report reveals today.

A total of 58,000 visas were issued to migrants and their families last year using 'intra-company transfers'. That is a rise of nearly 25 per cent in a decade.

The scheme allows multinational firms to bring in workers from overseas and was designed to allow senior executives to move to and from the UK easily.

But a report by the MigrationWatch think-tank says IT firms are abusing the scheme to bring in workers, typically from India, to fulfil contracts with UK firms.

Workers who arrive under intra-company transfers are not included in the Home Office cap on skilled work permits, currently set at just over 20,000.

The report warns that transfers 'distort the visa system' and 'undermine the integrity of the immigration system'.

A total of 58,000 visas were issued to migrants and their families last year using 'intra-company transfers'. That is a rise of nearly 25 per cent in a decade (pictured: the Home Office)

The loophole is also damaging the prospects of British IT workers, it says.

Lord Green of Deddington, chairman of MigrationWatch, said: 'Many people are asking why non-EU migration has not been reduced.

Here is part of the answer. Either the Government have taken their eye off the ball or they have been too heavily influenced by a small group of companies and have ignored their own advisory committee.'

The report reveals that in 1992 some 7,185 intra-company transfer visas were issued. That figure has increased eightfold and the scheme now accounts for 60 per cent of all work permits.

Last year a total of 94,000 Tier 2 – or skilled worker visas – were issued, of which 58,000 were transfers. MigrationWatch found a majority of these are for 'third party contracting'. But it warned there appeared to be 'little political will' to deal with deficiencies in the system.

The workers also enjoy beneficial tax breaks meaning neither they, nor their employer, pay National Insurance for the first year they are in the UK – making them cheaper to employ than UK nationals.

The transfers are unlimited and do not require a test to see whether the job could be carried out by a UK worker.

A Home Office spokesman said: 'The Tier 2 (intra-company transfers) is a temporary visa route which supports inward investment to the UK.

'In 2017, following recommendations from the migration advisory committee, we implemented a series of reforms to make sure that the route did not undercut or displace resident workers.'