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?

inboxmayhem so many cliches/ generalisations in that post. Might have money but no critical thinking.

“ Every time I mention my DC are privately educated and we have private health care in flamed for it!”

If you get flamed, it’s not for that!

I think Rhayader has it, everyone is overlooking the OP in their moral outrage at the “looking out for number 1” attitude of the wealthy. But that, on the whole, is how they are wealthy. So it follows they will move and not give a fuck who else is affected.

See also: wealthy men who leave their partners penniless without remorse and have a second family, depriving elder children of time, attention and everyday items but don’t give a fuck and expect to waltz in and out of their lives. That happens everyday but when it’s political we expect people to grow a moral backbone suddenly

I think we’ll have a massive skill shortage as anyone who is an engineer or doctor paid decently will be looking at moving abroad.

That in turn will shift who the top earners are down to lower earners.

Brilliant. Just as we can’t attract anyone to come to the country.

@PigletJohn. Add Hong Kong, Singapore, Zurich, Milan, Amsterdam, Dublin to the list. Sydney too. Depends on which part of the financial services industry you are in. These won't be options for all but for a proportion. And yes in some of those you pay for health care and education but then you pay less tax. When we looked at Singapore we would have been quite a lot better off.

I'll be glad if people who are too mean to pay for public services and feel no affinity with the UK fuck off somewhere else. Good riddance.

Is Singapore a place where rich European finance workers like to migrate to with their families?

I totally agree with you OP - it is not the solution & I don't blame people for living abroad when they are high tax payers, especially when paying 50% & loosing their tax allowance.

It can feel a little like being penalised for working hard

*Always struck me as a regressive where the wealthy get 40% relief on pensions but poorer earners get 20%.
Not nearly as regressive as VAT being 20% which disproportionately affects lower earners - but everyone focuses on income tax.

“but everyone focuses on income tax.”

And on the rich.

@PigletJohn

Sure Singapore is great. Particularly as you can have an Amah/Helper or two and your kids go to international schools. You certainly have the expat lifestyle and don’t really mix with the locals.

“It can feel a little like being penalised for working hard”

Do you think that only rich people work hard?

I dunno. I've lived lots of places, and I've found that TBH, I end up paying out roughly the same amount no matter where it was (although the Singapore tax system was fantastically easy, so I'll give them that).

The differences have been more in quality of life for the money - how big the flat is, how long I spend commuting, how easy it is to get the kids in a school or get the shopping, and I've yet to find the perfect place for that - everywhere has pros and cons.

The bit in the UK that hurt was that chunk of earnings just after 100k, where you pay back your personal allowance, so for about 20k you pay what feels like 60% tax - takes the shine off a pay rise when you see that.

Exactly @BertrandRussell where does this arrogant opinion come from that if you are in a highly paid job it's only because you work hard? And you are more entitled than those who didn't have the same opportunities.

As if there are not people in the UK who literally work themselves into the ground for minimum wage

@PigletJohn. Yes, most people I know go to Singapore or HK. Great international schools, good healthcare and comfortable lifestyle. Yes you pay, but that is more than offset by low tax rates. Three weather is the main issue for me!

The easy solution to not wanting to pay 50% tax is to get a job that pays less

Obviously working for NMW is a doddle, so off you go - problem solved!

In an attempt to present a slightly alternative view: we are also a higher income family and have also left the UK. But to a country where current taxation rates are higher (42% on the whole lot rather than 40% on the amount over £46,000). We moved for lots of reasons, one of them being the higher tax and the fact that as a result the country works - hospitals, schools, public transport... public infrastructure in general. As a small indicator of working public infrastructure: the city where we live has 750 playgrounds, maintained and cleaned by the the city. They also produce a freely available guide of these playgrounds, by area and type (small children, older children, sports equipment for adults, sledging hill, table tennis tables, dirt bike tracks, skating parks etc). I would always choose higher taxation for high earners and would vote for such a policy if we still lived in the UK.

The easy solution to not wanting to pay 50% tax is to get a job that pays less

but that's exactly it, this is what over-taxation does. People either don't bother or move.

“It can feel a little like being penalised for working hard”
Do you think that only rich people work hard?
No one said that, but people who are not rich don't get penalised. The sentence should have said you get penalised for working hard and being successful.

what's sort of message is it to tell people to do as little as possible?

Sounds more like we need better controls on who is allowed to live in the country
How could they say he couldn't live here? He was British. NHS access (afaik) is based on residency. He may have acted selfishly all his life but he did nothing illegal. He had a great life acting that way.

but that's exactly it, this is what over-taxation does. People either don't bother or move

I wouldn't. I'd quite happily swap with someone on a £200k salary.

It's easy to say until you look at the hours and how many of them you've done and got nothing out of them. Then you had transport and the rest, then you add how much help other gets and you don't....

No one said that, but people who are not rich don't get penalised.
Yes they fucking do - they are penalised by having to work very hard and getting shit wages for it.

I wouldn't. I'd quite happily swap with someone on a £200k salary.
Exactly.

Under a Corbyn government, many high net worth individuals will base themselves outside the UK with barely a backwards glance and the UK will lose their tax revenue altogether.
I have no desire to share the country with people like that so I'll happily wave them goodbye.

“No one said that, but people who are not rich don't get penalised. ”
Stop thinking of it as a penalty and think of it as a contribution to society you’re lucky to be in a position to make.

Although, what I'd probably do is employ a couple of people to do the work, pay them as little as I could (but that's ok, because the taxpayer will subsidise my wage bill via tax credits) and then complain about any tax I might have to pay and I should be exempt because I'm providing employment.

Yes, that's what I'd do.