The United Kingdom’s effort to curb net migration by tightening work-visa rules may carry a far steeper fiscal price-tag than ministers first suggested, according to an impact assessment quietly laid before Parliament on 9 December.
The 67-page document, prepared by the Home Office, models the effect of July’s changes to the Skilled Worker and Health & Care Worker routes. From January 2026 most employers will have to pay staff at least £38,700 (up from £27,200) to secure a work visa; care-home sponsors will be limited to senior roles; and mid-skilled occupations such as technicians, chefs and hospitality supervisors are being removed from the shortage list. Officials now expect the reforms to reduce net migration by 214,000 people over five years. While that helps the government meet its political pledge to “halve migration by 2029”, the loss of workers is forecast to lower income-tax and National-Insurance receipts by £9.5 billion, cut visa-fee income by up to £800 million and drain a further £1.2 billion from university tuition revenues as the graduate-visa window is shortened to 18 months.
![Home Office report warns UK visa clamp-down could cost public finances £10.8 billion]()
Beyond the headline numbers, the paper acknowledges wider business costs: firms that rely on global talent face “productivity drag”, higher recruitment spend and potential project delays while they scramble to upskill domestic staff. Social-care providers warn that shutting the entry-level route will exacerbate an existing vacancy rate of 152,000, forcing local authorities to pay more for agency cover. Conversely, the assessment finds “little evidence” that lower migration will meaningfully ease pressure on housing or public services in the short term.
Economists have reacted with alarm. The Institute for Fiscal Studies said the projected £10.8 billion hit would erase nearly half the fiscal headroom pencilled into last month’s Autumn Statement. Multinational employers are already modelling whether intra-company transfers or secondments to EU subsidiaries might be cheaper than bringing staff to Britain. Recruitment specialists fear the UK’s post-Brexit reputation for openness is at risk: “Boards see the salary threshold not just as a cost increase but as a signal the UK is pulling up the drawbridge,” warned EY’s mobility lead, Sarah Wain.
Practical take-away for mobility managers: review 2026–30 talent plans now. Where possible, accelerate assignments so offers are issued before the higher pay floor takes effect; assess whether the Global Business Mobility routes (which remain salary-agnostic) can plug gaps; and budget for higher sponsor-licence, Certificate of Sponsorship and Immigration Health Surcharge fees from April 2025.
The 67-page document, prepared by the Home Office, models the effect of July’s changes to the Skilled Worker and Health & Care Worker routes. From January 2026 most employers will have to pay staff at least £38,700 (up from £27,200) to secure a work visa; care-home sponsors will be limited to senior roles; and mid-skilled occupations such as technicians, chefs and hospitality supervisors are being removed from the shortage list. Officials now expect the reforms to reduce net migration by 214,000 people over five years. While that helps the government meet its political pledge to “halve migration by 2029”, the loss of workers is forecast to lower income-tax and National-Insurance receipts by £9.5 billion, cut visa-fee income by up to £800 million and drain a further £1.2 billion from university tuition revenues as the graduate-visa window is shortened to 18 months.
Beyond the headline numbers, the paper acknowledges wider business costs: firms that rely on global talent face “productivity drag”, higher recruitment spend and potential project delays while they scramble to upskill domestic staff. Social-care providers warn that shutting the entry-level route will exacerbate an existing vacancy rate of 152,000, forcing local authorities to pay more for agency cover. Conversely, the assessment finds “little evidence” that lower migration will meaningfully ease pressure on housing or public services in the short term.
Economists have reacted with alarm. The Institute for Fiscal Studies said the projected £10.8 billion hit would erase nearly half the fiscal headroom pencilled into last month’s Autumn Statement. Multinational employers are already modelling whether intra-company transfers or secondments to EU subsidiaries might be cheaper than bringing staff to Britain. Recruitment specialists fear the UK’s post-Brexit reputation for openness is at risk: “Boards see the salary threshold not just as a cost increase but as a signal the UK is pulling up the drawbridge,” warned EY’s mobility lead, Sarah Wain.
Practical take-away for mobility managers: review 2026–30 talent plans now. Where possible, accelerate assignments so offers are issued before the higher pay floor takes effect; assess whether the Global Business Mobility routes (which remain salary-agnostic) can plug gaps; and budget for higher sponsor-licence, Certificate of Sponsorship and Immigration Health Surcharge fees from April 2025.
