The Migration Advisory Committee (MAC) has published modelling showing that raising the general Skilled Worker salary threshold above the current £41,700 could cost the Treasury between £520 million and £710 million in lifetime tax receipts for every yearly cohort of migrants. The findings come in the committee’s salary-requirements review, released on 18 December.
Ministers have floated lifting the threshold to £52,500 as part of a drive to keep net migration below 200,000 a year. MAC chair Professor Brian Bell argues that such a move would bar many migrants who already pay more in taxes than they receive in public services, thereby undermining fiscal and productivity goals. Around 40 % of Skilled Worker visa-holders earn double the minimum, and the top decile alone generates 40 % of total lifetime fiscal contribution, the report notes.
The committee instead recommends keeping the £41,700 benchmark but returning occupation-specific thresholds to the 25th percentile of pay (they currently sit at the median). This, it says, would still deter undercutting without pricing out mid-level roles, and would yield an additional £660 million in net fiscal benefit.
![Migration Advisory Committee Warns £710 m Annual Tax Hit from Higher Skilled-Worker Salary Thresholds]()
Businesses and potential employees looking to navigate the evolving Skilled Worker route can simplify the paperwork by using VisaHQ, which provides up-to-date guidance on eligibility, document preparation and online filing for UK work visas. Their platform (https://www.visahq.com/united-kingdom/) tracks policy changes in real time and offers dedicated support teams, helping organisations remain compliant while minimising administrative overhead.
For employers, the message is clear: overly aggressive salary hikes could shrink candidate pools in critical sectors such as technology, engineering and the care economy while failing to meet fiscal objectives. Boards are advised to watch for government reaction – a consultation response is due in January – and to budget for at least the existing threshold in 2026 sponsorship plans.
The analysis is politically sensitive. The Labour government faces pressure from Reform UK to tighten immigration, yet also needs to plug skills gaps and stabilise the public finances. The MAC’s warning gives business lobby groups quantitative ammunition to argue that ‘blunt-tool’ salary thresholds hurt competitiveness.
Ministers have floated lifting the threshold to £52,500 as part of a drive to keep net migration below 200,000 a year. MAC chair Professor Brian Bell argues that such a move would bar many migrants who already pay more in taxes than they receive in public services, thereby undermining fiscal and productivity goals. Around 40 % of Skilled Worker visa-holders earn double the minimum, and the top decile alone generates 40 % of total lifetime fiscal contribution, the report notes.
The committee instead recommends keeping the £41,700 benchmark but returning occupation-specific thresholds to the 25th percentile of pay (they currently sit at the median). This, it says, would still deter undercutting without pricing out mid-level roles, and would yield an additional £660 million in net fiscal benefit.
Businesses and potential employees looking to navigate the evolving Skilled Worker route can simplify the paperwork by using VisaHQ, which provides up-to-date guidance on eligibility, document preparation and online filing for UK work visas. Their platform (https://www.visahq.com/united-kingdom/) tracks policy changes in real time and offers dedicated support teams, helping organisations remain compliant while minimising administrative overhead.
For employers, the message is clear: overly aggressive salary hikes could shrink candidate pools in critical sectors such as technology, engineering and the care economy while failing to meet fiscal objectives. Boards are advised to watch for government reaction – a consultation response is due in January – and to budget for at least the existing threshold in 2026 sponsorship plans.
The analysis is politically sensitive. The Labour government faces pressure from Reform UK to tighten immigration, yet also needs to plug skills gaps and stabilise the public finances. The MAC’s warning gives business lobby groups quantitative ammunition to argue that ‘blunt-tool’ salary thresholds hurt competitiveness.
