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?

And for those that didn't spot it in my OP, moving away was a temporary measure to save to get a house back in the UK where I'd be happy to return and pay the tax. Had I stayed, it would take be more than 10 years to save the same amount - it makes logical sense

Friends of mine are doing similar,

I know several high (City) earners with skills they can use outside the UK who are doing the same. I don't blame them.

It is time governments of all backgrounds realised that highly skilled workers are an asset which once lost will not be replaced. The world has changed and it is so easy to move abroad. These area people whose tax bills probably support several families.

Sadly, I'm not one of them.

@smilethoyourheartisbreaking if you are considered UK resident for tax then you pay tax on all your worldwide income and gains, even if you live in X country and earn income from A, B, and C countries.

@alistairric2 no one ever paid 90% of their income, it was 90% on earnings over a million or something.

yes but the upper marginal rate becomes your main rate if you earn a lot eg some people will pay 40% or more on the vast majority of their income if they are high earners in the UK whereas those just tiping over into 40% band may pay it on hardly any of their income. Nice problem of course peoole will say but when all your income taxed at 20% goes on your childcare bills as it will for some in London that means all your income over that from which you pay the rent is taxed at 40% etc.

As to criticising those who move abroad, to escape high taxes, how many of us would do the same if we were in that position? I certainly would.
I wouldn't.

*@QualCheckBot Norway is abolishing it this year. And so many Swedes and Norwegians have holiday homes, which in places like Scotland with even higher stamp duty has become prohibitively expensive. I don't really think the Scandinavian countries are quite as socialist as people think *

Well, I hail from Scandinavia. I don't think we've ever been classed as ''socialist'' - but well social democratic. There is a difference. In this country, everyone sees Corbyn as a Marxist - but he's actually more of a Scandinavian social democrat. A different point, but just to illustrate how allergic the UK is to anything called ''socialism''.

Which could explain some of this hysteria regarding high earners leaving the country. (In Sweden usually found to be unsubstantiated, by the way)

They might have abolished inheritance tax in Norway and Sweden - but you can't compare like for like. The Scandinavian system is just structured differently and ultimately built on a societal consensus, where ''class'' has been abolished and eveyone is more or less middle-class. It's a contract, where everyone is ''equal'' and ''lagom'' and where everyone is happy to contribute towards - well, society. Society is all of us. It's we. It's us. You really can't pull out examples out of the hat and on their own like ''we pay 15% more on rentals in the UK, than in Norway'' without really understanding the massive difference in culture between our countries.

As a foreigner, I don't see this consensus in the UK - it's more of a ''I'm alright Jack'' attitude - it's still an incredibly hierachial society, where the middle classes have been roped in with promises of climbing the capitalist ladder, leaving the ''bottom feeders'' of welfare recipients to fend for themselves. That's your Thatcherian heritage. ''There is such thing as society''. You revel in your ''independent'' schools, instead of demanding better funding for all schools.

You forgot to mention that the Norwegian state has put all their revenues from the country's oil into a a ''people's fund'' where every single Norwegian is good for (when I last checked) over £ 1 million. The oil revenues weren't sold out to the highest bidder, like in the UK. It's a different society - very different priorities.

Here you have the NHS fully paid for - in most Scandi countries you pay (a tenner) to see the doctor - but you have fully (almost 100%) subsidised childcare. Different society, different priorities.

Sweden still has the highest marginal tax rate in the world and taxes savings at nearly double the rate in effect elsewhere. Everone, even low income earners, pay approximately 33% tax on income - which is essentially the council tax, you pay very little state tax. High earners pay almost 60%.

Most people think that subsidised childcare, and 480 days parental leave at 80% pay is worth that. As well as being able to take time off wehn your children are sick, without being penalised by your employer. The state pays for that too.

That's what you call social democracy, not socialism - and this is what Scandinavia is all about. Not the abscence of inheritance tax.

Correction: Every Norwegian is good for 1 million norwegian krona, not £. A big difference, but still pretty good.

Also: Thatcher obviously said. There is no such thing as society, not the opposite.

If higher earners actually paid their tax like everyone else rather than greedily trying to avoid it we’d all be living in a better country. They’re would be no need for private health care & schools because they would be enough money in the pot to fund them properly for everybody,

I think your attitude is dreadful, happy to take out of the system when you needed it but you’ve started doing well & begrudge paying in - selfish & greedy - but carry on trying to justify to yourself.

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

I'm just curious to know what you think is the solution?

Take, take, take and give nothing back, now you want us to feel sorry for your horrible predicament. Stay away, we've enough greedy freeloaders not wanting to pay their way but demand everyone else pays. If everyone paid their fair share, taxes would come down.

You need to speak with an accountant to possibly start a limited company

You have benefitted from the NHS, via maternity services when you were born if nothing else and if you now have private health insurance then you would have used the NHS when on the breadline. You also benefitted from the state education system and, no doubt, have used local services such as refuse collection, walked along streets with lighting, used local parks when younger, possibly used your local library.
All of these are services paid for by taxes. Even local services - because the money given to local councils comes from the tax we pay.
You could look on it as "why should I pay tax now I'm earning more".
The other way to think about it is that by paying more tax, now you are in the enviable position to be earning that amount of money, you are supporting people like yourself who use/need local services.
J K Rowling has the right idea. She says:

""I chose to remain a domiciled taxpayer for a couple of reasons. The main one was that I wanted my children to grow up where I grew up; to be citizens, with everything that implies, of a real country, not free-floating ex-pats, living in the limbo of some tax haven and associating only with the children of similarly greedy tax exiles.
A second reason, however, was that I am indebted to the British welfare state. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque."

oh really
yawn yawn
poor you
its stripping a country
then expecting everyone to say well done you
stay abroad
and dont run back when you fall on hard times and want a pension
or free health care

Honestly, I don't know why you bothered with this thread. No offence.

I've read the 1st page and stopped because in none of the bitchy jealous comments did one person take on board that you made your money in the middle east and strangely, if you went to school in this country this apparently means you henceforth have to spend every penny in the UK because that's the unwritten rule dontcha know?

How dare you better yourself and then live somewhere else? Oh the humanity!

I'm not jealous of you. I say good for you on doing well for yourself and giving yourself options.

But then I'm emotionally secure, unlike the majority on this thread and as such, I have the ability to be happy for other people and I Iike to enjoy lofty aspirations rather than jealously covet what others have and criticize them.

We have our shit together. High 5!

Bye bye.

I provide a service, myself and myself only, to customers who pay me money for it.
This is my earnings. Anything after that is a deduction from my earnings.

You provide a service at no cost to yourself, you have a turnover/profit of 240k in YOUR FIRST YEAR? Are you a sex worker?

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

Just please let us know what the service is.
Pretty please 🙏

justlliloleme

If higher earners actually paid their tax like everyone else rather than greedily trying to avoid it we’d all be living in a better country

Indeed... if everyone, including businesses, paid the tax they should do anyway, then maybe there'd be no need to have higher rate taxes.

Honestly I just want to fuck it all off and go and live in the Middle East... this really appeals.
What’s the service?... please tell!
Just a loose description will do
Eg....
Events/ sex/ finance/ or whatever

Corbin is a vile little rat who plays on peoples jealousies

@sarralim. Yes to everything you wrote.

As a PP I also have a Pollyanna mentality. I’m on a higher rate tax and would be happy to pay more if it meant we had a properly funded NHS, education system and help for the most vulnerable.

As a child of immigrant parents I have benefitted hugely throughout my life so why would I not want to give something back now?

But then I'm emotionally secure, unlike the majority on this thread and as such, I have the ability to be happy for other people and I Iike to enjoy lofty aspirations rather than jealously covet what others have and criticize them.

Mmmmmm....Not entirely sure the second half of your statement backs up the first :)