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?

@WrongKindOfFace
Great point! It’s wars and financial crises/economic crashes that cause national debt to increase. It’s not fiscal liberal vs fiscal conservative parties because the fiscal liberals like to tax & spend, while the fiscal conservatives like to cut taxes & cut spending. Both approaches have the same impact on public debt. Their differences are more about the size of the government and what should be nationally owned and operated versus privately owned and operated.

I don’t know you but on the information that you have provided it sounds like your life could have gone very differently. There are many people who are bright and hard-working who grew up on the breadline but don’t have the success that you now have simply because they have never been in the right place at the right time. The state educated you; if you have a disability then I imagine that it provided you with healthcare in your formative years; you benefited from growing up within an entire infrastructure which is funded by taxation. I have no doubt that you are very hard-working, clever, and talented, and I congratulate you on your success - but I imagine that as with all successful enterprises there was a healthy dose of luck in there too.

If you do not now consider it a tremendous privilege to be a net contributor to the system that you benefited from so that in future deprived children can achieve as you have done then frankly I don’t really want you in our society.

Typical "I'm alright Jack, stuff you" mentality. People who are brought up in the UK, benefitted from the protection of the armed forces, the police, the NHS etc that come from taxes raised by their parent's generation. Now it is time for payback, they get cold feet and want to ditch the UK for elsewhere. No respect for people like this, there are words I could use, but I was brought up better than that.

To be really honest, OP, if people like you leave the country, it is no great loss.

Yes, you would pay quite a lot of tax if you were here, but it would still be a drop in the ocean in the grand scheme of things. Regardless of what you might think, you really aren't single-handedly propping up the welfare state. Thankfully, there are many more higher rate tax payers - myself included - who are more than happy to contribute.

It's also about the type of society that we want to create. From my perspective, we might lose out on a bit of tax revenue if a few wealthy individuals decide to shift overseas, but it's still a net benefit if we end up with fewer selfish, self-satisfied individuals in our country who lack the capacity to empathise with those less fortunate than themselves.

I work in England, but live in Scotland. By virtue of this, I pay more income tax than any of my colleagues whose salary is the same. Do I mind? No. I've benefited hugely from free higher education here, and think it's only fair that I now do my bit.

I am very happy for high earners to move abroad. The super rich even more so.

The top rate of income tax for the majority of Thatcher's premiership was 60%.

Corbyn wants the top rate to be 45-50%, and suddenly it's pearl-clutching time.

To be really honest, OP, if people like you leave the country, it is no great loss.

when these people employ tens or hundreds of employees, you change your tune.

Granted, they are not on PAYE, but they still go to countries were the tax system makes more economical sense.

If you benefitted from state education, NHS services, child benefit OP you definitely benefited from the Welfare State.

Now you’re in a position to contribute something back to that system, you don’t want to so you scarpered.

That’s like someone who accepts a drink but is nowhere to be seen when it comes to their round. No-one likes that person.

DH pays more tax than you do. I am proud of him. I am especially proud if the fact he firmly behind higher income tax and consistently votes for it (we’re in Scotland where the band thresholds are lower and the tax rate is higher because people vote for that to make the system work).

The fact that he is the types of person who shoulders duty and that he sees being a high earner as being a privilege that comes with responsibilities he is glad to accept is a bit part of the reason that I love and respect him as much as I do. He deserves it.

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

I'm intrigued how you managed started a business from zilch and in a very short time generated a hefty 6 figure turnover while running the entire venture singlehanded. I'd love to know what you sell.

The fact that he is the types of person who shoulders duty and that he sees being a high earner as being a privilege that comes with responsibilities

good for him, for so many others it means sacrifices and making choices so no reason to be penalised whilst other people have a much easier life !
So either they earn less, or they move away. The system should be fair, it's not.

It would be fair if everybody was paying the same tax rate. Currently it's not. (and I say RATE, so amounts would obviously vary!)

Corbyn wants the top rate to be 45-50%, and suddenly it's pearl-clutching time

Because with his shopping list a 45-50% tax isn’t going to be enough.

I think if this is the case then I think a certain person has done the calculations

I'm intrigued how you managed started a business from zilch and in a very short time generated a hefty 6 figure turnover while running the entire venture singlehanded.

no idea what the OP does and if it's even genuine, but I do know a couple of people who reach that figure with online businesses, and a couple of others who reach the same in 3-4 years doing recruitment. I am sure there are so many other examples but that's just people I know.

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

You and your family never used the NHS, and your parents didn't claim child benefit? You received no benefit from services such as the police and fire service, let alone roads, water and other utilities?

And, if you move back, can you guarantee that you will never use the NHS or private doctors who have been trained by the NHS?

I'd love to know what you sell

You got there before me, nononever :o

I doubt we'll ever find out.

...and I hired an accountant
They weren't a very good one then. I hope you've got a better one now.

I'm a low income family... But yes I can see what your saying op. I actually think income tax is fine where it is for the wealthy and have other areas I'd like tax to be increased instead.

For example i live in Cornwall and second homes used as holiday homes are exempt from council tax (driving up my council tax to £170pm) I'd like for them not to be exempt.

I would also like council tax to be priced on household income.

I am happy that lower bracket to start paying income tax went up a few times last few years... Would love to see that pushed up a little more.

I am very happy for high earners to move abroad.

So you'll be happy with no doctors, GPs or dentists then, who are already reducing their hours to avoid punitive marginal 62% tax and penal pension fund taxes???

So, you were raised in relative poverty and now don’t want to be associated with it by thought or deed. But have been happy to take the benefits that taxation brings, hitherto: public services, etc.
But you’re not willing to put in a bit more, even though you can afford it, to help those less fortunate than yourself.
You’re a real piece of work.

Those right at the bottom pay no income tax whatsoever on the first 12,500 of their income, thanks to ... the Conservatives! So I’m not sure where you’re getting this “half their earnings” guff from

I assume that you’re aware @CendrillonSings of other taxes aside from income tax??

Clearly not. Because that’s what I am talking about here.

I'm intrigued how you managed started a business from zilch and in a very short time generated a hefty 6 figure turnover while running the entire venture singlehanded.

I'd been working in the industry for a while for a start. I'm not going to disclose what I do for very obvious reasons; not least because it would likely get people to link to my normal MN handle and I don't want everything I post on MN to end up being a witch hunt when Advanced Search is used.

But the whole purpose of this post was not to analyse my personal situation - I was using it as an example of how penalising high earners ends up reducing the amount coming in

“I'm intrigued how you managed started a business from zilch and in a very short time generated a hefty 6 figure turnover while running the entire venture singlehanded.“

Oh, she didn’t Any more than another poster is losing sleep over her daughter being turfed our od her job and house when private schools are abolished.

It’s all viral marketing in behalf of the Tories, and it’s outrageous.

I've looked carefully, but I can't see which country it is that Donning thinks has lower taxes and better services. I would have been interested to look up the comparative figures.

Is it a country that discriminates on ethnic or religious grounds?

That's nice, dear. Enjoy your life abroad.