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 really want to know what the service is !

h but they tend to be very hard workers who hand over huge amounts of their earnings in tax to support the welfare system

Plenty of people work hard. It's just that some get rewarded more for that work.

Another Tory shill !

Are MN offering a "prize for five" or something ?

I've got some wine and vegan chocolate for the best one before the end of ToryFest 2019. The rules are quite simple ...

1. You have to namechange
2. You have to post in AIBU
3. You have to devise the most tenuous reason for crowbarring a reason to rubbish Labour you can imagine. Remember, you must mention Corbyn or search engines won't trend it.
4. Like a lit firework, you mustn't return to the thread under the OP name. Sock puppetry is of course not only allowed, but encouraged.
5. Don't be too specific in your OP. The more vague it is, the less you can be disproved on.

If you can get and keep 5 such threads in the first page of AIBU posts until midnight tonight, wine are chocolates are yours.

Let the posting begin !

If the OP was talking about her business income when she said “my earnings” regarding the taxes, it would only be 19% of her profits due in U.K. tax. U.K. has a very low corporate tax rate. There is no way in hell it would be “half.”

Only if the op was incorporated. Nowhere did the op claim to have a company. You don't need to have a company to run a business - you can operate as a sole trader or partnership instead.

Given they claimed to have first started a business and then later enlisted an accountant, didn't sound like someone who had incorporated first.

Plus, if they were operating a company I am sure they would not have passed up the opportunity to bleat about "double taxation".

Also there is no way you are paying half your earnings for anything. Higher rate tax only kicks in after a certain amount so you cannot be paying 50% of 100% of your earnings which makes me think this is all made up.

Pay your fair share or don’t expect the fire brigade, police or ambulance services to be there at your time of need and no I’m not a jealous poor person, I earn less than you but still live in a six figure household, can afford good holidays, run a nice car, have nice things and shop at Waitrose because I like that they share their profits with their employees.

I was born into a family where both parents were low earners in a poor area. They never claimed benefits but I understand that everytime I was taken to the doctors or attended school general taxes paid for it.

My family are extremely fortunate compared to most of the world. You can see what happens in the kinds of countries where the rich don’t pay their fair share where poor people are living in slums whilst rich live like kings. Is that what you want here? To live in a gated community to hide away from the poor outside the gates? Where rich people have to pay for protection in case their children are kidnapped for ransom by desperate people? A more equal society benefits everyone including you.

If you're real by the way then you have pretty shit morals to think it's fine to move to a country where disabled people are left to suffer and die because nobody takes collective responsibility for their community through taxes just because of your own greed

1. You don't know what country I have moved to
2. The country I have moved is extremely well known for the high level of care it provides to its own nationals - in fact its homelessness rate is next to zero, its state medical care one of the best in the world

How

VAT, taxes on things like cigarettes, alcohol

Don't let the door hit you....

YABU. OP. You (and all of us) benefit from everyone paying tax to fund services such as education.

You sound incredibly selfish and entitled.

I think you’re either being untruthful or if you are telling the truth I would suggest you to pay for better advice.

You say you have a company that is registered overseas. What are you paying tax on? Do you mean the amount you take out of the company to pay yourself or tax your company pays through an establishment in the UK to trade here?

Either way, you are grossly exaggerating what you have to pay. The UK also has generous allowances such as Capital Allowances you can set against profits.

If you want to move overseas by all means do but don’t feed us a load of crap about high taxes being the reason.

In fact its homelessness rate is next to zero

That means zip. All a government has to do is say no-one is homeless, define them out of existence.

It's a business run only by me, not some huge corporation

You just made it even worse, Donning ... working for a huge corporation would at least have allowed for the usual "big companies grinding us all down" thing, but now it's apparently all your fault and never mind the many 1000s you're already contributed

Did you really think it would be otherwise here, or that you'd get a fair hearing?

SerendipityJane MN really should have created a sticky post so we all knew and had a fair shot... But then I guess that's not really in the spirit of this theme.

we received zero benefits whilst I was growing up - always lived in private rentals as we fell between the gaps.

So apart from your state schooling, you didn't receive child benefit? You received no NHS healthcare, even with a disability?

'The welfare state' doesn't just mean benefits.

@DoctorAllcome

It doesn't work quite as you've said. At £100k the first bracket disappears, £1 for £2. So at £124k there is no longer a zero band.

Plus you used last year's bands. The zero band is £12k currently.

Also though corp tax isn't 20%. I can't recall if it's 18 or 19 but it's not 20.
Also wary of the comment on paying VAT but not being registered so unable to claim it back. Over £80k you have to be registered, if you're not registered because the business is registered abroad then I can't see why you'd pay UK VAT in the first place.

Notice the own nationals bit. Covers a multitude of sins. Literally.

It's ok, OP. I don't think the country will collapse without you. There are plenty of other higher earners who are happy to contribute.

Enjoy your nice life overseas.

I knew that this would get a beating, but can those calling me selfish, greedy, with no morals actually put their hands on their hearts and say that you would be happy with paying out level of money that you've directly earned yourself?

I work 100 hours a week plus, and ran a huge risk in setting up this business - everything is my responsibility - marketing, finances, website development, sales, communication etc etc etc

Also note that I said I would be returning to the UK and that my issue is with the prospect of RAISING taxes, not the current state.

OP, now you are resident in U.K. you should reconsider your business type and set up. It doesn’t make any sense that business turnover is being counted as your personal earnings. That’s fishy.
Not being VAT registered also sounds kind of fishy to me....you’re collecting VAT on your sales from buyers (this is a buyer tax, not a seller tax) so how do you turn that money over to HMRC if you’re not VAT registered?

Ah what a shame you left OP! What could I give you to entice you back? I have a solid gold toilet knocking about, would that do?

It make me really sad how selfish society has become. I am no saint but I have what is probably a very naïve belief that we should all help each other (Pollyanna, that's me!)
I just couldn't allow my conscience to let me walk away from the country that has supported me (school, hospital - lots of hospital, roads, bins, everything we take for granted) with my big bag of money because it 'isn't fair now I'm rich'. I am n a really low charity worker salary which isn't particularly likely to change - nor am I too fussed - as we are older and 'ok' as far as our lives are now on track; but if it did change, hugely, there is no way I'd pull up the drawbridge and screech 'MINE'; Id be happy I could help more.

Just think yourself very lucky then OP.

Had your life had an alternate ‘sliding doors’ moment, you’d still be on the breadline, probably relying on benefits and the NHS to support your disability and state schools for your children.

Thank goodness you can avoid putting in the pot for those spongers eh?!!

So OP, how do you think they system should work?

Maybe all people should pay less tax, so they can then spend more and stimulate the economy that way, so more tax comes in via growth?

Or maybe we should spend less on certain things we can't afford?

Or maybe we should borrow more to invest in infrastructure, leading to increased economic growth that way?

I would be interested to hear what economic policies you want the UK to follow.

“Having said that, if the business was UK based - i'd be paying corporation tax (20%), VAT on sales (20%) among other things. And I wouldn't benefit from being VAT registered as there would be very little to claim back VAT from - and the vast majority of buyers are overseas, but all of my sales would be taxed at 20%. “

Op You don’t know what you are talking about. Corporation tax is 19% and has been for some years. Vat is not a tax on businesses but a consumer tax. You don’t pay it on sales, your customers do. Any vat you are charged on your costs can be reclaimed. Basic business knowledge.

People are absolutely vitriolic about the rich but they tend to be very hard workers

They really don't.

In a past life I earned a large £££ and spent time with people who earned £££££ in all different sectors and a variety of countries.

They did not work harder than everyone else and, in many cases, they worked less hard but had better breaks.

I'm not anti rich but in most cases the wealthy I have known are the beneficieries of good fortune (and good networks). The best of them recognise this - the worst walk around with a chip on their shoulder and spend a great deal of time talking about schemes they use to avoid tax.

In fact, you eventually get to high enough level of quality networks and you cannot help BUT be rich.