Migrants and taxes: why fiscal inclusion matters

By Emma McClelland - 02 September 2022

How do migrants in the UK understand and navigate the tax system? What barriers exist when it comes to engaging with it? And why is fiscal inclusion so fundamentally important?

These were some of the questions posed by the 'Taxing Migrants' project, which brought together the expertise of front-line advisors from the Work Rights Centre with scholars of migration and tax at the University of Oxford (OSGA/COMPAS).

Why was this project carried out?

Tax and migration are profoundly interlinked in contemporary British society. The fiscal balance is often used to distinguish between 'good migrants', welcomed for their ability to contribute fiscally, and those castigated for 'scrounging'. Tax payments are also part of an everyday infrastructure of citizenship. Paying tax and national insurance contributions is the gateway to accessing benefits and securing a pension, while, in the post-Brexit context, a record of tax contributions is the simplest way for EEA citizens and their family members to demonstrate residence, and secure status under the EU Settlement Scheme (EUSS).

What were our findings? 

The project found that:

  1. While the UK Government has taken a digital first approach in its provision of public services, barriers of English, IT literacy, and differences in tax cultures have left many migrants unable to navigate the UK's tax system independently.
  2. The lack of professional support, coupled with the urgency of securing EUSS status before the 30 June 2021 deadline, created a perfect storm where the fiscally excluded were pushed into the arms of for-profit consultants.
  3. Relying on an unregulated industry of self-styled, for-profit accountants who offer advice with little accountability, migrants are vulnerable to data and identity theft, mis-selling, and fraud.


How can we increase migrants' fiscal inclusion?

While more research is needed to understand migrants' fiscal inclusion, several recommendations emerged from this project. We recommend that policymakers:

  1. Start a HMRC vulnerable user group, to learn from third sector advisers.
  2. Institute a HMRC line for charity advisers, to save time and facilitate information sharing.
  3. Treat charities as partners, not contractors, to tackle the problem of fiscal exclusion at scale.
  4. Reach out to migrants with information on their rights as consumers of financial and tax advice, and provide clear means to report bad advice.

Ultimately, the 'Migrants and Taxes' report demonstrates that fiscal inclusion poses a significant challenge to migrants, their advisers, and the government alike. And while this study was one of the first to examine the concept of fiscal inclusion, it should certainly not be the last. 

You can read the full report here.

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