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Employers could be hit with £1,000 per-head migrant tax

Making it more difficult for businesses to find the skills they need is not helpful.

by Jack Torrance
Last Updated: 25 Jan 2016

Dressing up a tax as a skills ‘levy’ has become all the rage. Last year the government introduced plans to make employers pay a cuddly-sounding ‘apprenticeship levy’ as a percentage of their payroll. Now it could be set to make employers pay a whopping £1,000 for every non-EU migrant they employ on a tier 2 visa.

The recommendation comes from the Migration Advisory Committee (MAC), the body tasked with finding a way for the government to meet its ‘ambitious’ (some would say unreasonable) target of reducing net migration into the UK to the tens of thousands. As well as introducing a so-called ‘immigration skills charge’, it also recommends increasing the minimum salary threshold for a tier 2 visa from £20,800 to £30,000.

The committee says the £1,000 fee ‘will incentivise employers to reduce their reliance on migrant workers and encourage them to invest in training UK employees,’ as well as raising £250m per year that could then be spent on training. But it would also harm businesses’ ability to find the skills they need and make the already complicated task of recruiting from outside the EU even more painstaking.

‘Skilled migrant workers make important contributions to boosting productivity and public finances, but this should be balanced against their potential impact on the welfare of existing UK residents,’ said the MAC’s chair Sir David Metcalfe. Quite how skilled workers who come to the UK, pay their taxes and staff our essential services damage the welfare of existing residents isn’t clear.

It’s worth reiterating that this measure isn’t targeting low-skilled workers, whose value to the British economy is a greater source of contention. The £1,000 fee would be applied to pretty much every Chinese doctor, Indian computer whizz and American financier permitted to work in Britain.

‘These latest set of MAC proposals to be considered by the Government before being enforced on 6 April, will leave many companies, already facing a growing skills crisis, struggling to afford the rise in labour and administration costs and resorting to using lower skilled workers,’ said Jonathan Beech, MD of immigration consultants Migrate UK. MT couldn’t agree more.

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