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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

to think 51% tax is ridiculous, and already to be planning to move to Asia

805 replies

hedgiemum · 22/04/2009 14:33

Namechanged. Married to someone who earns well in excess of £150,000 a year, though neither does he earn 7 figures.
He is still quite young in his career - a recent promotion to a senior position, but has not been earning this kind of money of long, so we still have a mortgage and haven't saved large amounts (what we have saved is through his pension which is no longer going to be particularly worth doing.)

He phoned me a minute after end of budget to say he'd watched it with his boss whose reaction was that he would move the company (not a bank, but in finance) to Asia. Probably Hong Kong - 12% tax rather than the 51% we'd be paying here.

Seems like a kneejerk reaction, and clearly we can afford to pay more, but boss doesn't feel he'll get good productivity from staff if they are getting to take home less than half their income. Plus it decreases ever-present risk of them being headhunted by companies in lower-tax economies.

AIBU to be PLEASED (I used to hate tax exiles.) Partly because it just does not seem fair. Partly because this country has been run so badly by New Labour of whom we had such high expectations, and the medical care we have received has been shite, the local schools are shite, the roads are insanely busy and yet is costs so much to live here.

OP posts:
Quattrocento · 23/04/2009 19:01

There is a certain degree of unlearnedness about some of the comments on taxation. It is a popular myth that anyone earning a lot of money can employ a taxation specialist and their tax bill will evaporate. It's impossible to do unless you are either (a) a business owner rather than an employee or (b) you are not domiciled in the UK for tax purposes or (c) you are not resident in the UK for tax purposes.

I agree with Pag's comments heartily

"I don't mind our taxes going up but still pretty fecked off that so much of it was spent bombing the crap out of Iraq and paying for second homes and dodgy porn....

Its never the tax I have probs with - God knows enough people need help and the infrastructure needs maintaining but it just always feels like a shafting when you see what the fuckwits spend it on"

kaz33 · 23/04/2009 19:05

My baby boomer parents got a great education, lots of breaks and have made stacks loads of money.

But they see taxation as putting something back, realise how lucky they are and would never dream of avoiding taxation or moan about it. They won't even don't do inheritance tax planning as I am going to get quite a lot.

Often our place in life is down to total luck, not dependent on anything else.

So I find it very sad, the banks have been involved in a drive by shooting of the british economy. And for the avoidance of doubt that is everyone involved in related industries - lawyers, accountants, architects etc... who feed of the city. And now they start to whine about their little pot - yeuch.

Lets hope the next generation have got more compassion and imagination - because they are going to need it.

sarah293 · 23/04/2009 19:16

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goodnightmoon · 23/04/2009 19:19

actually we have all fed off of the City's boom - if not in personal borrowing, in tidy tax revenues for several years that had helped pay for increases in public spending.

sarah293 · 23/04/2009 19:21

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Ninkynork · 23/04/2009 19:23

You know I've been reading this thread on and off since last night but whenever I glance at it I keep thinking it says, "AIBU to think 51% tax is ridiculous, and already to be planning to move to Asda?"

AllFallDown · 23/04/2009 19:25

On the France stuff further up, the reason it has better services is that regardless of the nature of any sitting government, it has a fundamentally socialist redistributive system that places a heavy emphasis on providing state services. Though its headline income tax rates are lower, its underlying tax rates for both individuals and corporations are higher, as the 2005 OECD figures show. There! Higher taxes = better services for all!

sarah293 · 23/04/2009 19:25

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brettgirl2 · 23/04/2009 19:30

I don't think the overall net is positive though goodnight!

Sorrento · 23/04/2009 19:33

It's done more harm than good, the ripple effect in terms of pushing house prices up.
I bought my first home, a three bed semi in a nice area as a single mum on £25k, it was 2.3 x my income so I could afford nursery fees, petrol and mortgage oh and for us to eat too.
Imagine that situation today or ever again, highly unlikely.

goodnightmoon · 23/04/2009 19:42

gordon brown has a lot to answer for, IMO.

mogwai · 23/04/2009 20:19

I also agree with the OP

I will never earn this amount of money but I'm not resentful of people who do.

It sucks. I'd go to Asia.

brettgirl2 · 23/04/2009 20:41

Or you could go to Asda instead, because that might save you a few quid

Swedes · 23/04/2009 22:41

Quattro - lots of high earners do have flexibility about the way they work and the way their earnings are structured. As a family we have sought paid-for tax advice, including seeking written answers from tax counsel in the past. Lots of employees will instead take part of their salary as shares and then pay flat rate CGT (18%) on their disposal as opposed to income tax at 50%. You know this sort of thing happens.

Quattrocento · 23/04/2009 23:28

Anyone structuring a package involving share options nowadays needs their heads examining IMO ...

Swedes · 23/04/2009 23:34

Quattro - I think you'll find lots of companies are offering Freezer schemes - whereby pay is frozen and bonuses forgone in order to help the company through the bad times in exchange for future shares. I examined such a document for a friend only last night.

Quattrocento · 23/04/2009 23:40

Oh I know they exist Swedes, believe me I know they exist. But the vast majority of employee remuneration packages concentrate on salary, benefits and bonuses. There's not much planning you can do around those nowadays.

LeninGrad · 23/04/2009 23:43

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oldnewmummy · 24/04/2009 04:08

"Why do enormously intelligent and specialised people end up being managed by someone with an iq of a hundred

why? perhaps they chose to be more ruthless, perhaps they are more political, perhaps they have greater "emotional intelligence" (doubtful going by the managers I've had), perhaps it's all a face-fit club"

I'm just reading "Blink" by Malcolm Gladwell.

It could simply be because they're tall!

Swedes · 24/04/2009 10:23

Quattro - Of course true that the vast majority of remuneration packages concentrate on salary and bonus, but the vast majority of £150,000+ packages? I doubt it v much.

vezzie · 24/04/2009 11:08

Cote - I think you have a slightly particular perspective on this from coming at this from a headhunters / sales angle (double-sales in ethos, in that headhunting is sales, plus being in the actual sales sector).

If you are in sales, only the short- / medium- term bottom line matters. You start to think that sales = business. In fact that is a reasonable way to think of business if that is what your objectives areowr and if you are more likely to achieve them the more blinkered you are, in a very competitive environment other issues may be a waste of brainspace and may damage your productivity. False clarity (over simplification) is a very useful trait in sales, but it doesn't make this way of thinking true.

As someone else pointed out, businesses rely on many other skills -ten performed by people who are not primarily motivated by money and who are less well remunerated than sales people (who only work for money). Non-sales skills are often dismissed by sales people, for various reasons including:
they are temperamentally extremely focused on their own objectives and have a sort of driven tunnel vision, and are only dimly aware of the other people in the organisation;
they quantify value financially and have no other criteria by which to assess value;
they don't understand them, but the arrogance of sales people is encouraged because it makes them make more money.

(In an area like headhunting, however, there may not even be a productive significant non-sales sector of the business - you are not going to get the understanding of what the authors do for a publishing house, what the animators do for a TV production company, what the scientists do in companies like Riven's DH's - it is just pure sales, you stop being aware of people doing things other than sales and supporting sales.)

This is a very skewed view of value and it always disturbs me when people talk about business as only sales, and the only value of money to be ploughed into making more money. You may enjoy the thrill of the chase at work, and money can become an end in itself in that environment, but surely when you come home - at least - money becomes at least partly tokens to spend on things that are worth more? In your household do you only "reward" (with food, clothes, treats) the financial earners? What about the children? Have you never gone on holiday? Or do you always monetise travel, so you don't go anywhere if there is a net financial loss?

If we can think like this at home - I will, in fact must, swap money for something worth more - why is it insane to think this on a business scale, or on a national scale? When can we decide to rationally perfom cost-benefit analyses on a macro scale about what money is for, when it needs to be invested to make more money to keep us afloat or better still rich (which we are as a nation, relatively) and when it should be spent on something we need to have, to use, to our benefit?

PS it has interested me in this series of the Apprentice a. how often the losing team has failed through putting brute sales energy ahead of effective analysis in various forms, and b. how very grumpy Sugar has been about it in each case.

Litchick · 24/04/2009 11:21

vezzie - that is very interesting.
In any company I would say that the value of everyone in ultimately making the money has to be ...er...valued. But sometimes those not on the sharp end should perhaps remind others of their efforts more??
I used to be a lawyer and my skill is in handling cases and going to court. This meant my fee-earning was at a very high ratio and my value was easy to see. My colleague was a backroom person, proccessing the files, doing much of the admin stuff. Yey I couldn't have earned the cash without her. When she got passed over for a bonus the second time she lost it big time.
At last everyone noticed her and her efforts were rewarded.

duchesse · 24/04/2009 11:28

< stands up and heartily applauds vezzie >

Thank you, that is a far more cogent and articulate explanation of what I believe than I could ever provide.

OrmIrian · 24/04/2009 11:31

vezzie - that is certainly true where I work. Sales and marketing regard themselves as the real power behind the business Sod the rest of us

cory · 24/04/2009 11:38

Could it not be argued that the nurse who treats 5 highly profitable salespeople on her ward during the course of the year is ensuring massive profits for the country?