High earner leaving UK because of tax

[DonningDaFlameProof]

Hi all,

I'm well aware that I'm highly likely to be utterly slaughtered for this (thus the name change) but having read the thread about Corbyn and seeing several people saying that the theory that taxing high earners would make them leave the economy is a myth, I thought I'd share.

I'm British and was bought up on the breadline, went to state school, have a disability - just to pre-empt the "privileged" comments.

I started a business not that long ago (fortunately selling a service globally, and not registered in the UK as its main market is the Middle East) in the first few months it became obvious it was going to do well and I hired an accountant.

To cut a long story short, if I remained UK resident then my tax bill for my first year would have been approximately £120,000. This would have been just under half of the money I bought in.
Year 2 - tax bill would have been £230,000.

My family are not well off, so I was supporting a fair few people on this plus I started with nothing, so my first priority (after my family) was to save for a house as I was living in rented accomodation.

I am well aware that I am earning a high salary, and would never argue otherwise. But reading on here, people seem to think that a 6 figure salary means that you buy yachts for a laugh and eat diamonds for breakfast.

Good size family houses in my area started at about £500k.

For us, it made sense to move abroad for 5 years or so, save the money otherwise spent on tax, come back with that lump sum and buy a property outright.

And that's what we've done, it was insanely easy.

Now, the current plan is to come back to the UK in a few years time and settle down. We'll have a nice house then, and the tax bill we'll just suck up because we like the UK.

I keep seeing people harp on about raising taxes for the wealthy...if this happens, I know that we won't end up moving back. Because paying out half of my earnings is galling enough.

The top 10% of earners pay 60% of the tax bill.
The top 1% of earners pay 28%.

These people will also be privately funding their own medical care and schooling for their children. They'll also be heavily contributing in other taxes and of course pay VAT on the things they buy.

Raising taxes, abolishing private schools, penalising the wealthy in other ways is just going to drive them out of the country - leaving the tax pot far emptier, but the majority of people still relying on it.

AIBU to think that penalising the wealthy is not the solution?

I don’t really think of taxes as what I personally get from them, on an individual level they paid for my schooling, my NHS appointments and treatment, my use of the roads, my enjoyment of the parks etc, but I don’t think of it as a bean counting system where I track my contribution and the things I don’t personally use. For example I’m happy they help out vulnerable people and help sick people get treatment other than me and my loved ones, I don’t have kids yet but I don’t resent them going to childcare or to community centre youth programs. Yes there are things I wish my local/central government didn’t use them for but overall I don’t resent the system. I was out of work for a time and signed on, I’ve been working again since for years and have paid back what I took out but I’m grateful that it was there when I needed it as you never know what is around the corner.

This, entirely. I'm not naive, I don't adore tax season, but I pay a hefty share of taxes and don't fundamentally mind--because I think of myself as part of a collective. I'm a patriot and a humanist and it's important to me.

There are plenty of reasons to disagree with Corbyn, fwiw. And you're quite possibly not wrong about more people becoming tax dodgers like you. It's just not something I'd ever contemplate.

Never mind what you say OP unfortunately you were always going to be slaughtered on this thread because you earn a 6 figure salary. Generally MN think us 45% rate tax payers are scum, lighthearted but actually quite true really.

It IS a lot of tax to pay admittedly but I do feel really privileged to earn what I earn. Does my salary stretch that far in London? Well not compared to when I lived in Wales (and still earned a six figure salary) and all do the houses I’ve been looking at have been at least £1m but I get that relatively speaking this is first world problems in the grand scheme of things and ultimately if my extra tax helps to drag some poor soul out of poverty, or helps to prop up our failing NHS then I’m ok with that.

leading to them spending more than half their income on tax

But how much of their "income" comes in the form of benefits, i.e. tax credits, housing allowances, not to mention free prescriptions, reduced council tax, subsidised school bus permits, etc.

But how much of their "income" comes in the form of benefits, i.e. tax credits, housing allowances, not to mention free prescriptions, reduced council tax, subsidised school bus permits, etc

Because their wages aren’t high enough in the first place. Business get the double whammy of low tax rates and government subsidies for wages in the form of benefits.

LeatherBottle

Thanks for saying my post was BS.

Took another look at my Dps wage slips.

Normally Dp doesn’t even open them.
His company have had ongoing issues with their payroll and we live very within our means.
I do my own tax as I am self employed. Dp on PAYE never looks at anything in detail.
Money goes in his account and he takes what he needs and gives me the rest.

His pay slips are completely up the wall.

So far we have found £5000 of underpayments.

I always questioned why sometimes considering our income we couldn’t live like other people on similar income.

Judging by his payslip he has been paying over 50% in tax and NI. We haven’t addressed that calculation yet.

Better 45% of something than 50/60/70% of nothing.

I am privileged. I grew up privileged and am a high income earner. I see the tax in this country as paying my fair share and am happy to do it, as I grew up abroad where despite income tax being a straight 50% or higher, no social services, no schooling, no healthcare, no real public transport system, poor roads, no pensions, zero services but paying through the nose for them.

So no money means
No school (children dropping out at age 9 to help their family save money and being used as labour)
You die if you have no money for healthcare (seeing a doctor costs the equivalent of US$250 and my mum's diabetes medication is US$500 a month, privatisation of healthcare is "great", I always got to pick when I saw my doctor, but if you don't have money you literally die, my friend a trainee doctor at the time saw many children go blind because their parents couldn't afford fucking eye drops.

If that's what you want for the UK by all means everyone should adopt this very selfish attitude.

I think everyone should contribute but we should not penalise high earners because of unintended consequences (See doctors cutting back hours or high paid workers leaving, as examples of killing the geese that lay the golden eggs).

I believe in a flat tax as this would give everyone some skin in the game and keep the high earners in the UK, contributing. Whether people agree from a moral point of view or not, I'm a realist, not an idealist.

I don’t think penalising the wealthy is the answer either. Also don’t get me wrong a 6 figure salary is a lot (I should add I’m not a high earned at all!) but as you say £100,000 only buys an ok house in some south east areas. Need to go into a care home due to old age? That will vanish quickly. Why not tax the truly wealthy, they are the ones dodging the taxes with their off shore accounts and money hiding methods. Why not make amazon, apple, Starbucks etc pay tax rather than someone who works hard and earns £100K

I don't agree that paying taxes is "penalising the wealthy."

Nobody has argued that a well-paid person paying taxes is an alternative to taxing multinationals.

You can do both.

@DoctorAllcome you are forgetting that if you earn over £100k you lose your personal allowance.

I think OP is in Swizerland. I earnt £110,000 last tax year (NHS consultant) I am not picking up extra work or going for promotions at the moment due to both the marginal tax rate between £100,000 and £150,000 and the pension liability. Once the DCs are through college I will probrably work 4 days a week.:(

A fully qualified nurse starts on £24k and rises to £30k (I know there are plenty of other professions I could use as an example but I think we can all agree that nurses are generally hard working and an important profession in our society). Using the £30k mark that's a take home pay of £1994.65 per month.

Someone earning £100k pa will take home £5544.65 pm.

That's £3550 more in your hand every single month, even with the additional tax.

£3550 more every single fucking month and STILL high earners complain about the injustice of a higher tax rate. Wtf are you all doing with all that cash and why do you feel you need more?? It can only be greed imo.

People who believe it's ok to penalise and punish anyone who earns more than them
That they are 'punishment' is, presumably, the attitude of some people to taxes.
However
Taxes are there to pay for the country you live in, not to punish you.
But, I suppose, if you have no interest in living in a country where everyone has access to a decent, independent life with access to health, education, clean water, transport, rubbish collection and disposal, sewage, national parklands and seas ....
and you are just interested in buying stuff and shoring up your own privilege ... Then perhaps Dubai is the place for you -
The problem is not those who live and work only in Dubai - but those who want to hide assets in tax havens without contributing to the infrastructures of the countries who have paid for their wealth.

Not in the slightest, we received zero benefits whilst I was growing up - always lived in private rentals as we fell between the gaps

Child benefit? NHS?

Roads, street cleansing, police, army, traffic management, planning, health and safety enforcement, public transport, parks and playgrounds, libraries, prison services, mental health services, food inspectors...

Even when you don't use a service yourself you still benefit - for example I have no kids but I am sure as hell suffering from cuts to the youth services budget

(For context I am a 6 figure earner)

Switzerland

*I don’t pay ANY income tax because I earn under the threshold. So the above statement is rubbish

Well it’s rubbish because your dh is a higher rate taxpayer. Honestly 🤦🏻‍♀️*

I was referring to the statement that people on minimum wage pay 50% of their earnings in tax which IS rubbish. The fact that my DH is a higher rate taxpayer has no bearing on my not paying tax... I earn less than £11,000 per year THATS why I don’t pay INCOME tax.

And you also pay other taxes - VAT, road tax, council tax? They all go into one pot to be redistributed. Please do some reading up.

No one pays road tax as it doesn’t exist! (I don’t personally own a car anyway). VAT and council tax come nowhere near 50% of my income. No reading up necessary thank you. I used to be a higher rate taxpayer and paid every penny in tax I should, please don't assume that because I earn very little that I am unintelligent or unknowledgeable - I choose to work part time hours in term time only as I have a special needs child who needs my presence.

Let's get something straight here.

While higher earners have to pay 40% tax (41% in Scotland) and additional earners have to pay 45% tax (46% in Scotland), they only have to pay 2% NI.

So actually, a high earner is only paying 10% more in contributions after they reach the basic rate threshold and an additional earner is only paying 15% more.

You think this is very unfair? And FYI, not all high earners or additional earners have their kids in private schools and they certainly don't boycott the NHS either.

The government have very sneakily made it look like high earners pay 20% more and additional earners pay 25% more but they don't at all due to this reduction of 10% in NI.

So if you are an additional earner, you pay 32% up to the basic tax threshold, 42% up to the higher rate threshold then 47% in the additional tax threshold (for tax and NI). You are only paying 15% more than someone on NMW. How can you think this is unfair? Someone on NMW is handing over one third of their wage and you are handing over just under half.

There isn't the massive gap you are making on that there is and they aren't punishing the wealthy with this. Also, just to point out, the extra tax from the wealthy is probably spent on HMRC trying to find all their offshore accounts and tax dodging scams as they are the biggest drain on the system over all. Corporate companies and additional rate taxpayers do HMRC out of billions per year, more so than anything they ever spend giving low earners tax credits and top ups!

I don't even claim benefits, I earn and pay tax and NI but threads like this really get my goat. You'd rather dunk out of 15% so you can get that lake in your 30 acre mansion than pay it and make sure schools are well funded and the disabled are looked after? Schools that YOU used to get where you are?

Shocking...

Haven't RTFT but I'm with you @DonningDaFlameProof !! DHs income tax bill will be about £150,000 this year. We are happy to pay our fair-share at the moment Because we like living in London and it's currently a great place to do business ... but there comes a point when we won't. And we'll move abroad to a more tax-friendly company. And we'll take all the jobs with us too!

Buggeroff presumably you don’t spend half of your income on things like council tax, VAT, vehicle excise duty etc because your higher-rate taxpayer DH also contributes to the household finances?

If you were both earning minimum wage, around half of your household income would be going on various taxes (not just income tax, there are plenty of hidden taxes as various people have listed earlier in the thread).

Not ducking , I pay all the tax due. Just not pushing into that additional earner bracket. At that point one also loses tax relief on childcare which might be worth £5,000

Have we found out what the OP does for 100 hours a week yet?

What’s your job bbciii ?