The government is set to charge UK tech companies £1,000 a year to hire Silicon Valley engineers

Technology companies in the UK could soon be forced to pay £1,000-a-year for every skilled worker they hire from outside the European Union if immigration recommendations from a government committee are embraced by the Home Office.

Startups wishing to hire a developer from Silicon Valley on a five-year contract would be forced to pay £5,000 up front, for example, while hiring a team of five over the same time period would cost them £25,000.

The proposal, which also applies to other sectors, was put forward by the Migration Advisory Committee (MAC) today.

It comes after Prime Minister David Cameron tasked the committee with investigating how to reduce the number of immigrants entering the UK through the Tier 2 visa route, which currently allows 151,000 skilled immigrants to enter the UK a year.

The MAC also suggested that the government raise the visa’s minimum salary threshold and clamp down on IT contractors in order to bring migration down to “tens of thousands” instead of the 336,000 figure that has recently been touted.

Last October, some of the UK’s most powerful tech entrepreneurs — including the founders of Google DeepMind, Citymapper, Shazam, and SwiftKey — warned the Prime Minister against clamping down on immigration.

Committee chairman Sir David Metcalfe said in a statement that skilled migrant workers make important contributions to the UK economy but he stressed that this needs to be “balanced on their potential impact on the welfare of existing UK residents.”

He added: “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 lab.”

The committee suggests that the government raises the minimum salary threshold for the Tier 2 visa from £20,800 to £30,000. However, it also suggests that a “special case” is made for startups.

Raising the overall salary threshold would cut the number of skilled immigrants entering the UK by about 27,600, or 18%, the committee said.

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