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?

Yawn..Don’t particularly like Corbyn but yet another labour bashing post....

People resident in the U.K. are taxed on their global income, as I understand it. You can avoid tax by being non-domiciled. So then you are non resident , like the op. You can't just stuff some of your money in a foreign acct to avoid tax.

Actually things did improve (and I say that as an employee of many years standing - nurse) but also satisfaction ratings were far higher. Problem was the infrastructure under major and thatcher had been left to rot so millions of pounds of investment were required to improve things - remember decrepid schools etc ?

Someone on NMW is handing over one third of their wage and you are handing over just under half.

Someone on NMW isn't paying income tax because the Tories doubled the tax free personal allowance to £12,500 p.a.

They'll be paying some NIC on some of that wage, but probably receiving more back in the form of tax credits, child benefit, council tax reductions, housing allowance, etc etc.

Sashkin QualCheckBot interesting you find that - we live in Canada, and taxes are similar but services far fewer. You pay out of pocket for prescription charges (unless you have private insurance), social services provides far less. So I’d be surprised if European countries managed significantly better services for the same money. Perhaps their costs are lower, or perhaps the scope of what they provide is more limited.

Bigger tax base I think. In countries like The Netherlands, Germany, Sweden, etc I suspect there is more than 63% of adults of working age paying tax, as in the UK.

I don't mind paying slightly more tax in a country which spends it well on things which benefit everyone. A lot of things in the UK are quite miserable really, and its no longer a lowish tax country either.

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

Oh my god. I can't even read any more than this. Who do you think we should 'penalise'? And why do you want some kind of sympathy for only having a little over 120 grand left after your first year of trading?

When you were younger your family would have got some help even if just child benefit. You would have been closer to the breadline without. Do you want to cut help to people who are in the position you grew up in or is is just that you want someone else to pay for it so you can buy a nice house?

OP I agree, tax is theft. We left the UK because it offered us nothing but a crap existence.

I would much rather live somewhere where contributing to social was optional. So we can live and survive on our own piece of land without input from the state. If that means no access to police fire and health that’s fine my kids DH and I will be fine without

Tax is not theft.

I think it makes sense if people who have claimed benefits used services repaid them in full before they emigrated.

OP, I had a look at that link that you used for your costing for your education that amount doesn’t seem correct at all. That link was talking about what parents are paying for uniforms and extras not the costs to the government for sending you to school and educating you. Surely that might be closer to the cost of a less expensive private school per year (although I believe even those get some subsidies from government). You say £16,000 for your total schooling ? Considering how much per student it costs for a teacher, the maintenance on the buildings, the opportunity cost of government having to provide that school and not sell it for a profit, and all these other incidental costs, I cannot believe that figure would be correct. Particularly if you got a free lunch for any amount of time. Maybe I am wrong though. Have a look at this link instead. www.google.com.au/amp/s/www.bbc.co.uk/news/amp/education-46180290

And if you went to uni, governments still subsidize those too I gather.

Also in your NHS costing did you include the actual cost of medication? Vaccines from your childhood, all the costs of your birth, check ups as a baby, health visitors or maybe that was your parents paying in your calculations)... I have moved from a country where you pay for medication and I think I would have spent more than £150 a year on prescription which includes birth control and maybe a few thinks like ointments, blood tests, Pap smears and what not and I am a healthy person. Doctors appointments alone for checkup can quickly mount up.

So, yes. I guess I question your calculations on these ‘basics’.

While I understand that higher taxes mean less I your pocket and you obviously feel strongly about this. I think that people who move to avoid taxes probably dramatically underestimate what the government actually contributes vs what they (person moving to avoid tax) pay.

I look at it as ‘what goes around, comes around’ much of the time. I pay the tax (with fair deductions if appropriate) and get on with it and know that if I absolutely needed a safety net in the future then it would be provided by the government.

Oh! And you are moving back so supposedly you will need all this care when you are older and NOT paying taxes anymore. So this actually needs to be prepaid I guess.

Imagine if you need medication for an early onset disease.... I think you might realize that in the grand scheme of things from birth to death that NHS figure will be significant! And any state pension you draw as well.

How lucky are we to live in a country like the UK! Well, I feel lucky anyway.

I have calculated my cost on the NHS using this tool here: www.gocompare.com/health-insurance/the-bill-of-health
It comes to £4500 (and I massively overestimated how many GP appointments I've had)

Have you included your mother's maternity care, costs at your birth, midwife and HV costs after your birth, pre-school health checks, vaccinations?

My state education cost £16,000 apparently

Nope. The standard payment per head for children in state schools is approximately £4K per year, so the cost for you over (I assume) 13 years is £52K before you start factoring in things like capital costs for school buildings and maintenance; then there's potentially nursery and university/FE costs on top of that. So, if you are taking it that your tax payments cover education and health, there's a rather major deficit even before you start factoring in the myriad other things that tax pays for.

If you come back as you plan to do, suppose you had a major accident or illness within, say, the first six months which meant you could never work again and became reliant on health and other care for the rest of your life. Can you guarantee that you would never ask the NHS or social services for help?

Op congrats on making your money but you do have to pay your way.
In a similar position at the moment myself but I accept tax needs to be paid and I will pay it. I was on WTC for a long time whilst working to get to this point. the way I see it is my tax will pay back the benefits I used therefore allowing others to access benefits when they need it.
Don't get greedy op.

Have you included your mother's maternity care, costs at your birth, midwife and HV costs after your birth, pre-school health checks, vaccinations? No, because those were costs for my mother.
If I had children, then these costs would be under my umbrella.

I have calculated my cost on the NHS using this tool here:
www.gocompare.com/health-insurance/the-bill-of-health
It comes to £4500 (and I massively overestimated how many GP appointments I've had)

I did it too, it looks like I am due a refund!!!

@Tonnerre

It was like we were connected by mental telepathy!!!

Picture didn’t attach

If you come back as you plan to do, suppose you had a major accident or illness within, say, the first six months which meant you could never work again and became reliant on health and other care for the rest of your life
Having saved a minimum of £500,000 in that time then yes, I would expect to pay my own way. I also would not be claiming a pension when I retire, as I'm doing this myself. I also would have private health insurance.

It would have to be a very extreme, very rare situation for me to go from earning a level of income to save that much money in tax, to immediately be entirely dependant on a welfare state.

I am surprised that with the brains to build a business you haven't the brains to appoint a tax adviser/accountant to sort your tax affairs out.

OP.

Again, I think you dramatically underestimate the true cost of medication and health care. Did your parents truly contribute all they received all the way through their life - both of them??? I think a better idea is to estimate your birth to death costs and then talk about it. Please include the cost of medication without any bulk deal negotiated by the NHS. I truly think you will be surprised at what big pharma will charge if given free reign on pricing.

It would have to be a very extreme, very rare situation for me to go from earning a level of income to save that much money in tax, to immediately be entirely dependant on a welfare state.

You’re being rather naive about both the risk of not being able to work (particularly given that you have a health condition) and the cost of self-funded care.

Sorry about my dud link.

I was trying to post a link that says current day estimate is £73k (BBC 2018) for a UK state school student to A levels.

My mother didn't receive child benefit There is no way your on-the-breadline mother would have turned down this money. It might have been called Family Allowance when you were a child.

Everyone seems to have turned this into a debate about whether OP is morally right to leave the UK but that’s not their point. People WILL leave if taxes are too high.

DHs employer already has a plan in place to leave the UK if Corbyn gets in. They are a finance company run by a Jewish family.