UK banks slam £1,000 immigration tax

The British Bankers’ Association (BBA), the lobby group for the UK banking sector, has slammed a government plan to charge employers $1000 a year for every non-EU citizen they employ, saying it would damage the City of London’s global competitiveness.

Making the comments in its budget submission, the BBA also criticised the government’s plan to raise the lower income threshold for Tier 2 migrants from £20,800 a year to £30,000, as well as a proposal to introduce a £200 health surcharge for Tier 2 migrants.

“The UK is a global financial centre and is also becoming the world’s leading location for FinTech. The banking industry encourages the Government to work with industry to further attract talent and skills to the UK banking sector – both internationally and domestically,” the BBA said.

“As a global financial centre, a skilled and mobile workforce is integral to the UK’s pre-eminent position.”

The BBA paid particular attention to the £1000 Immigration Skills Charge charge, which it said would pose a “substantial risk to restricting the development of talent across the banking industry network”. The combined measures would make new foreign national hire “more significant than it stands today”, it said.

While the government has committed to some sort of ISC, it is not yet clear whether it will set it at £1000. That was the figure recommended by the Migration Advisory Committee (MAC) in January.

When he made the recommendations, MAC chair Professor Sir David Metcalf acknowledged that skilled migrant workers make “important contributions to boosting productivity and public finances”, but said this needed to be balanced with the potential impact on the welfare of existing UK residents.

“Raising the cost of employing skilled migrants via higher pay thresholds, and the introduction of an Immigration Skills Charge, should lead to a greater investment in UK employees and reduce the use of migrant labour,” he said.

British Chancellor of the Exchequer George Osborne will deliver the 2016 UK budget to parliament on 16 March.

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