Quarter of top earners in UK are immigrants

Virtually a quarter of the UK's top earners are migrants who arrived in the country as adults, according to an analysis of government tax data by the University of Warwick.

David Sapsted

22 September 2020

The study, undertaken by the university's Centre for Competitive Advantage in the Global Economy (Cage), found that among the top one per cent of UK earners – about 528,000 people earning more than £128,000 per year – 24 per cent were adult immigrants.Analysis of anonymised tax returns collected by HM Revenue and Customs also found that the total of high-paid immigrants was increasing: there were 52 per cent more migrants among the top earners in 2018 than 20 years earlier.But Arun Advani, director of Cage and lead author of the report, warned that the UK could lose some of these expat high-earners if, as predicted, the government imposes 'wealth taxes' in November's budget in a bid to offset the economic damage caused by the coronavirus pandemic.He told the Guardian that a fresh tax on higher earners could lead to many leaving as they “often have less to tie them to the UK than people who were born here”.Prof Advani added: “There are a lot of high performing international people here and if you make it very unattractive for them, people worry that they might leave.”He said a central finding of the study showed that many people's fears over migrants acting as a drain on the economy were misplaced. “A lot of the worries about migrants is 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.“People may not think of ‘migrants’ as being rich, but if you stop and think who are the wealthy people hanging out in Mayfair, a lot of them are not UK-born. Or if you go to Canary Wharf you will hear a lot of voices in European languages because people come here for well-paying jobs.”

Rob McNeil, deputy director of the Migration Observatory at Oxford University, said it was no surprise that migrant workers were among the UK’s top earners, and that London in particular had “traditionally been a major draw for global talent”. He told People Management magazine: “Restrictions on lower-income labour migration from outside the EU for a decade has naturally skewed non-EU labour migration toward the middle and upper end of the UK wage distribution."He added that the overall composition of the UK’s migrant population was complex and encompassed both some of the country's highest and lowest earners. “But to imagine that work migration to Britain is primarily a low-income phenomenon is to misunderstand the process,” he said.The Cage report found that the sectors with the highest proportion of top-earning migrants were finance, medical, technology and professional sport, with two-fifths of the highest earning bankers being expats who were paid an average of £383,300. In medicine, 37 per cent of the highest-paid people working at UK hospitals were from abroad, earning an average of £160,400.Tech migrants involved in such areas as website and software development made up just over half of the sector's top earners, taking home £259,700 on average. In professional sport, 31 per cent of top-paid workers were from overseas.Given that freedom of movement from the EU ends on December 31, Gerwyn Davies, senior labour market adviser at the CIPD (Chartered Institute of Personnel and Development), said that the new, points-based immigration system was likely to make hiring talent from abroad more costly for some employers next year.But he said the removal of migration caps and faster processing times promised by the new system meant “the new restrictions [would] probably have little bearing on employers’ recruitment strategies".He added: “The premium they gain in terms of skill and experience will significantly outweigh the costs in the vast majority of cases."The situation is very different for low-wage employers who will need to change their recruitment strategy given the lack of route for recruiting low-skilled labour from outside the UK.”Read more immigration news from Relocate Global.