UK immigration skills charge may hit Indian IT industry


Already reeling under pressure from the US government’s decision to hike visa fees for L1 and H1B categories, the Indian IT sector could be affected by the UK’s Migration Advisory Committee’s (MAC) recommendations to the British government to introduce the immigration skills charge (ISC).

In its report submitted to the government last month, MAC suggested that an upfront charge of £1,000 per year for each Tier 2 migrant employed by companies in the UK should be collected. This would make the Tier 2 route more selective, while providing £250 million for skills funding annually, and having a significant impact on employer behaviour.

Professor Sir David Metcalf CBE, Chair of the MAC, said that 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.

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

“This will incentivise employers to reduce their reliance on migrant workers and encourage them to invest in training UK employees. This charge should be in addition to raising salary thresholds,” he added.

The UK government contemplated a similar move in 2012 but after the British-based Indian IT firms warned of relocating their offices, then UK Business Secretary Vince Cable and Chancellor of the Exchequer George Osborne assured that they will not be implemented for two years.

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