A study conducted by an academic group organised by the University of Warwick has found that almost a quarter of the highest paid roles in the UK are filled by migrants.
The study calculated that migrants constitute 24% of the top UK income taxpayers (i.e. those earning more than £128,000 per annum), and singlehandedly contribute up to 8% of total income tax in the UK. According to research based on HM Revenue & Customs tax records, high-income migrants paid approximately £16 billion in income tax in 2019-20.
The study addresses the common perception that low-skilled migrants take British jobs, which was a driving factor leading many British nationals to vote to leave the European Union. Arun Advani, Impact Director at the CAGE research centre at Warwick University, noted the misplaced concern that migration is a burden on the UK economy, stating “A lot of the worries about migrants are about the bottom end of the distribution. But, actually migrants are hugely prevalent at the top of the income distribution – and therefore paying more tax”.
Migrants are even more established in the top 0.001% of UK-based earners. It has been found that four in ten earners within this bracket are migrants. Comparatively, only one in six people are migrants amongst low-income groups.
The findings suggest that companies in the UK create jobs aimed at highly-skilled and high-income migrants paying UK taxes, and “firms poach high paid, mid-career workers from abroad and place them straight into top-paid positions. All of this points to an essential role of foreign specialist expertise in the UK economy”.
Immigration of high earners has also become significantly more prevalent in recent years, as London is recognised as an increasingly important financial hub within the global economy. Reports indicate that there were 52% more migrants in the top 1% of high earners in the UK in 2018 than in 1997. The same period saw a doubling of the number of migrants in the top 0.01% of earners in the UK. The rise in highly-paid migrants in the UK has been linked to the UK economy’s rise in the finance industry.
Advani expresses concern that the introduction of the much debated “wealth tax”, to be imposed on the highest-earning members of the UK economy, would result in those migrants that contribute most significantly to UK income tax finding greener pastures. Unlike British nationals, migrants may have fewer or weaker ties to the UK and the imposition of harsher taxation measures may encourage them to seek opportunities in other financial strongholds, such as New York or Hong Kong.
The study also accentuates concerns that Brexit will deter highly-skilled European migrants from seeking employment opportunities in the UK. European nationals (and their family members) presently enjoy the right of Free Movement, allowing them to reside and work in the UK without need for immigration permission or documentation. This right will cease at the end of the Brexit transition period on 31 December 2020 and all EU nationals (and their family members) will be required to register under the EU Settlement Scheme prior to 30 June 2021.
Should you wish to discuss the prospects of relocating to the UK, please do not hesitate to contact us. We have extensive experience in all work-based visa routes, including Tier 2, Innovator, Sole Representative of an Overseas Company, and EU Settlement Scheme applications.
The information in this blog is for general information purposes only and does not purport to be comprehensive or to provide legal advice. Whilst every effort is made to ensure the information and law is current as of the date of publication it should be stressed that, due to the passage of time, this does not necessarily reflect the present legal position. Gherson accepts no responsibility for loss which may arise from accessing or reliance on information contained in this blog. For formal advice on the current law please don’t hesitate to contact Gherson. Legal advice is only provided pursuant to a written agreement, identified as such, and signed by the client and by or on behalf of Gherson.
Consultant in our Private Client department