A Reform UK government would make it more expensive for businesses to hire foreign workers by forcing them to pay a higher rate of payroll tax and a new levy for each overseas worker they employ.
Money generated would be used to reverse Chancellor of the Exchequer Rachel Reeves’ increase in the national insurance contributions paid by employers. However, the reduced rate would only apply to British workers.
The plans were unveiled by Reform’s Treasury spokesperson Robert Jenrick on Monday as the party seeks to double down on its anti-immigration credentials ahead of a crucial special election this week.
Reform, which has led in national opinion polls for more than a year, risks being undercut in the contest by a party that’s even further to the right and more hardline on immigration — Restore Britain.
Polls show Restore Britain, founded by ex-Reform MP Rupert Lowe, on about 7% in the northern England constituency of Makerfield. The split in the right-wing vote could hand victory to Labour’s Andy Burnham, clearing the way for the Greater Manchester mayor to mount a leadership challenge against Prime Minister Keir Starmer.
Under Reform’s proposed Employers’ Migrant Labour Levy, businesses employing lower-skilled, lower paid workers would pay the heaviest charge. Jenrick said Reform had not yet finalized the level of the charges, but gave the example of setting the fee at £3,750 ($5,038) for a full-time worker on the National Living Wage, tapering down to £1,500 for someone earning around £50,000 and £500 for someone earning around £100,000.
Employers will also have to pay the current 15% rate of employer NICs for every foreign worker. For British workers, however, that rate will be cut to 13.8% — the level which existed before Reeves’ hike last year.
Businesses say the £25bn increase in payroll levies, combined with inflation-busting hikes to the minimum wage, have deterred them from hiring.
"For more than 20 years now, we’ve had British workers coming second, undercut by migrant labor,” Jenrick said. "We’re going to make it easier to employ British workers than to employ migrant workers.”
UK businesses already face higher costs to employ migrant workers. These include fees to obtain a sponsor license and the immigration skills charge, an annual fee of up to £1,320 for employees working on a Skilled Worker or Senior or Specialist Worker visa.
Reform’s leader Nigel Farage has already announced plans to abolish so-called settled status, or indefinite leave to remain, which gives foreign nationals the right to work in the UK and apply for a greater range of welfare benefits when they’ve been in the country for a baseline of 10 years. Announcing that policy last year, he said any foreign workers in the UK would instead have to apply and pay for a visa every five years.
The latest plans would likely hit low-paid sectors such as retail, hospitality and adult social care the hardest. Of the total number of non-British workers, 12%, or 754,200, were in retail as of December 2025, while 11% or 713,800 were in hospitality, according to Oxford University’s Migration Observatory.
A fifth worked in the health and care industry. In adult social care, a sector which is largely state-funded, just 70.8% of filled posts in the 2024-25 tax year were held by British people, according to industry body Skills for Care. That’s despite the government banning the recruitment of most overseas staff into the industry last year due to fears they were being exploited.
Jenrick said care companies should pay their staff more to recruit British workers, despite many in the industry saying their margins are already too thin and that local authorities do not have the funding to increase wages.
"If they need to pay a Brit a little bit more, or if they need to improve the working conditions of those Brits, or improve the career progression and the skills training of those Brits to make that job more attractive, then they should be doing that,” he said.
The move comes amid growing concern across the political spectrum about youth unemployment, with the number of 16 to 24-year olds who are not in education, employment or training topping 1mn in the first quarter.
Reform has said it plans to slash the UK’s welfare budget to force more people into the labor market.