Wealth is draining out of the UK

[Ifmenhadperiods]

I was at an event with business people the other week. One of the high net worths said to me that no wealthy foreigner he knows will stay in the UK long term. He is local but says anyone with foreign connections and wealth is fleeing abroad - and taking their businesses with them. That is the chat around his dinner table in Holland Park.

One indisputable piece of evidence I guess is the massive slump in companies that list in the UK. We also have so few pension funds investing in UK business. Personally I don’t blame them: my own shares ISA is invested in the US and has grown by 30% in the last year, a figure UK shares just can’t compete with. Most of our FTSE top companies are in legacy industries like fossil fuels while elsewhere they’re in tech and innovation as well
as traditional companies.

Several friends have left here and gone to the US in the last decade and they say the lifestyle is excellent (and they earn far more, working in tech).

I have also spoken to friend’s older DC (6th formers) and some who have had offers from Oxford and Cambridge are rejecting them in favour of Ivy League schools.

Apparently Ivy leagues are FAR better at getting students to think about their careers from day one. Oxbridge is amazing at teaching you the subject in an academically rigorous way, but Ivy leagues pair you up with business investors if you do a degree such as economics. They have fees assistance for households earning up to 400k US dollars. Here you can’t get student loans if you have more than about £50k in household income.
I know the fees are higher there but they also have more scholarships in the US.

We are about to tax private schools. A popular policy with the public. But again, apparently the wealthy foreigners who can afford this tax are worried it will shake out the middle class Brits they want their kids to go to school with! They don’t just want their kids to go to school with foreign and British super elites. They’re quite fond of the eccentric Brits.

It seems every way you turn, there’s little incentive to make money especially with the cliff edge in income taxation. And the worst thing is it’s understandable because of the massive levels of wage stagnation we have to subsidise through working tax credits (no real wage growth for 20 years!).

We don’t want immigrants but we have no one to pay for our massive welfare bill which is made up mostly of a triple locked state pension and grossly inefficient health system.

If you’re lucky enough to have a bit of spare cash, forget moving up the property ladder, owning a holiday home or a rental (tax hell lies in all those paths).

Can anyone shake me out of this pessimism? Of course I know we are lucky not to be in Syria or Afghanistan or Gaza. But this is about the decline of the UK rather than where we are compared to truly volatile or oppressive countries. I genuinely don’t want to emigrate but fear we - along with anyone who was once comfortable but never wealthy - are going to have a very uncomfortable retirement - if I make it that far - and our DCs will face a future in a country that will continue to get poorer, with the entrepreneurial class deserting us.

Well, if it makes you feel better, the US may be heading for a sovereign debt crisis and those tech stock valuations are arguably the function of a bubble.

How when ketchup is £4 - people buy where they can afford to

And? Why would people want to stay and pay a marginal tax rate of 60% to 100%+ at 100k. Jobs such as tech, engineering, IT, medicine. The people we need to stay are the people who are shouldering the tax burden with skills. These people are mobile.

See the comparison I put earlier in the thread. IT job - global company. UK salary 110k with heavy tax penalties. 250K USA - less tax and more benefits. Same job, same skills.

And without the costs of educating or training them.

In your 20s and 30s, it's easy to go overseas for work if you are ambitious and educated. I did, to the USA, at 24; my DSis, DBIL and DH plus our closest friends, all went to the middle East in the mid-late 80s. Most of my friends have worked overseas for most of their lives, or created businesses in the UK. My Dsis and BIL have lived on every continent except Australia, where their son is about to move as his design-trained wife has been head hunted for a senior role.

It's galling to have people who have never moved from the postcode where they were born, demanding more and higher taxes to fund the standard of living they envy. Talent and wealth is global now, whether anyone likes it, or not.

You are wrong. People begin paying tax at 40% from £50k. On top of that - at 100k they then lose personal allowance. This means that you are effectively being taxed at 70% from 100k -125k. If you have children - this changes to over 100% marginal tax between 100k and 150k as you lose childcare hours.

This is in part - why we have a consultant and dentist crisis. Many won’t go over 100k as the penalty is far too high and it isn’t worth it.

@whistleblower99 I do see that too- not always quite so simple though if people have family considerations - I know someone who went to US and his wife simply didn't want to go , one reason was she couldn't work there in her chosen profession either- they are married and to and fro across the Atlantic - i

@whistleblower99 I do think that aspect is totally ludicrous and has been allowed to continue.

Indeed. Problem is though many can and are going. Especially with in demand - global skills.

You don’t pay 100% tax on earning in U.K., the highest tax bracket is 45% over & £125k

Try reading the post again - it may help. However if it doesn’t, best not to comment on things you don’t understand.

Gov dot com website states 40% from £37k not £50k where are you getting your information from?

Try reading the post again - it may help. However if it doesn’t, best not to comment on things you don’t understand.

says you who plucks figures out of your imagination

@MikeRafone, anyone earning between £100-125K on PAYE earnings, pays 100% of that in tax, because they loose their personal allowance, and any entitlement to childcare for that chunk of income, so why bother to do the extra?
I don't believe the politicians in the UK have woken up to scale of the brain drain.

And it's not helped by all the people who do low paid but essential work, generally because that is the only work they are qualified for, rather than what they dreamed of doing or being. Those jobs are low paid because anyone can do them.

@whistleblower99 it's interesting - I was listening to a lady headhunters conversations once- this is in one of those very sought after skills areas you mention - she was headhunting internationally and very few were interested in UK jobs- most wanted places like USA, Canada, Switzerland, Italy, Scandinavia, Netherlands, Germany , a few wanted Aus and NZ (but not as many as you might think ) - it wasn't always about tax levels but certainly it was very salary and benefits focussed - along with perceived lifestyle- and the UK scored very low in these people's eyes. These were 30 to 50 year old males and females, doctorates, MSCs coming out their ear holes etc.

I know reading comprehension is a struggle nowadays. However try reading again.

Here is a link with a picture to help you.

Yes please. Amused by pp suggesting we change our tax system wholesale. We can’t build a new train line like HS2, our rivers are full of excrement, civil servants in the ONS are striking because they have been asked to spend 2 days a week in the office and HMRC has closed its phone lines, and you think the government has the wherewithal to successfully implement global taxation?

Yep it is a combination. The fact the salaries are SO much higher is the main draw. Then the fact that they aren’t held at 100k by heavy penalties. Our tax system is prohibitive. The UK doesn’t rate highly in the global talent market.

I just wish there was the ambition to fix any one of those @Teentaxidriver .

do try to work out the different between 37 and 50 instead of thinking you’re so clever up their in that ice tower

What are the heavy penalties if salaries are over 100k?

You forgot to add in the personal allowance. So £12,300 is tax free, the next £37,700 is at 20% and anything you earn over £50,000 is 40%. Simple.

We are talking without the PA and now with the PA? Which is it?

ODFOD🙄

If you go over £100k your entitlement to free childcare is removed. Childcare is so massively expensive if you have two kids you’ll not actually start to be better off until you hit £140k ish, so people with kids just drop their hours to part time to avoid this cliff edge, and the government loses the tax they would have got on that extra salary. The government having a policy so bad they are shooting them selves in the foot.

Bob earns £60k. The first £12,300 is tax free. The next £37,700 is taxed at 20% and the last £10k is taxed at 40%.