Two thirds of millionaires 'left the country' following 50p tax rate

[joanbyers]

No surprise really:

www.telegraph.co.uk/news/politics/9707029/Two-thirds-of-millionaires-left-Britain-to-avoid-50p-tax-rate.html

Apparently the tax increase cost £7 billion.

From what I understand most millionaires don't even want to pay 40% tax, let alone 50%.

Pretty stupid.

They didnt necessarily leave the UK. They may have just restructured their income to make it 'capital gain' rather than income or received it as dividend (with a tax credit) or even chanelled pay through an offshore company.

That said, once your income tax goes above 200k it really is worthwhile looking at moving to a low tax jurisdiction. This is especially true if you can work online and do not have to be physically present in the UK to do your job and can just fly in and out.

The internet and increasing use of mobile communication means that high skill, high pay people who deal in money and information and not physical products can easily move between tax jurisdictions to legally avoid tax.

This really isn't surprising.

What is surprising is that the government didn't see this happening from a mile away, it's basic common sense that people who are having the piss taken out of them won't stick around.

And the last Labour government agreed too, which is why they didn't introduce the 50p rate until very late on, and then only to set a booby trap for the incoming Tories, who they knew would find it politically difficult to abolish it.

I sympathise. Having just had one of the most soul-destroying conversations of my life with a representative of HMRC, I'm not far from following them, despite being very much not a millionaire.
It was, as somebloke notes, a truly cynical stunt by the last government. But the cynicism and amorality of Labour never cease to amaze. I read Chris Mullins' diaries recently - and bear in mind he was supposed to be one of the elder statesmen, men of principle etc - and when Lehmans collapsed what was he doing? Wringing his hands over imminent meltdown? No, gloating at the discomfiture of Tory free-marketeers. Loathesome.

Absolutely no evidence in that story that anybody moved countries
just that they adjusted their income - as is entirely feasible and practical for those earning that much.

NON story

If they didn't leave the country then they did something else to reduce their tax bill. I should imagine that HMRC, even as shite as they are, can tell how much money they have received from HRTs each year.

Yes, of course they did.

Lots of people moved income forward the year before because of the CGT changes as well
and high earners are not paid salaries, they are remunerated and decide how where and when

I look at how much I feel like paying in tax and then decide my earnings ......

erm, there are plenty plenty people (the majority, I believe) in the top band who are paid salaries.
What a lot do - and what I will do on the happy day my salary nudges into this bracket, if it ever does - is sacrifice a chunk into pension. I would imagine the great majority of salaried bods in the top band will have done this. not really a win for the revenue.

true, sorry, typing one handed with cat on lap
but yes, pensions, expenses, all sorts of ways to avoid a tax rate that was telegraphed well in advance

but you are allowed to top up prior year pensions etc etc
LOTS of ways round things

as I say
NO evidence that ANYBODY left the UK

Isn't the crux of the matter not so much the leaving the UK, but the fact that a measure that was promoted as something that would raise more revenue has actually done the reverse? (as was widely predicted)

I know someone who left the uk because of the 50% tax rate and took all his money with him.....

where to?

as after all, only the UK is dumb enough to have 'non dom' status

Yes - let's keep loads of millionaires here and make them pay tuppence ha'penny on their tax.

Why?

No other countries do

Wish they had left. good riddance to bad rubbish. If they don't wish to pay their way then they can go somewhere else and not pay their way there instead.

Except it hasn't driven millionaires out of the country.. The figures are here

What happened was a massive and one off exercise in tax avoidance as people "forestalled" income into the previous year to avoid paying tax.

Don't you think we would have noticed if 2/3 of really rich people had left the country ?

Everyone in Belgium on more than 30k pays 50% tax. I nearly had a fit when we moved. Everyone didn't move though...

Plenty of people (and companies) relocate to lower tax regimes, this is not a new thing. The question is whether we as a nation can afford the sort of silliness indulged in by breadandbutterfly above. I rather think we can't. We need to be pragmatic about tax.

He went to a tax haven. I thught he was mad to make a decision to put money before friends, family and life in general.....after all you can't take it with you, and he's now on hs own with his wife in a country where he can't speak the language. Agree with what breadandbutterfly said

I do wish papers would stop printing such biased nonsense. Of course 2/3'rds of our millionaires didn't just leave Britain. It defys common sense to even suggest it.

What has in reality happened is people have understandably done what they can to minimise the tax they pay.

The 'temporary' 50% tax band was a stunt. A political booby trap which in my opinion was fantastic bordering on political genius.

It played nicely into your traditional Labour supporter and was something your average voter wouldn't be bothered about. Certainly nowhere near enough to write to their MP. At the same time it would be politically impossible for the Tories to remove but Labour could if they'd have won the last election by reminding people they'd said it was temporary all along.

The downside of course is that Labour firmly put politics above national economic interests. It makes absolutely no sense to have a 50% tax band since it raises at best a paltry amount but drives people to avoid it and/or not bother coming to our shores in the first place.

well frankly I wish the UK would get rid of "non dom status"
and make some of those buggers leave.
No other country has it.
They pay taxes to the other countries, and the UK misses out.

Abolish non dom tomorrow
if they want to move to Doha, let them, but the wives will not move ....

Oh we all know they don't pay tax like normal people, come on! They've just 'fiddled' or ' used legitimate tax avoidance schemes' or a mix of the two

Oh we all know they don't pay tax like normal people, come on! They've just 'fiddled' or ' used legitimate tax avoidance schemes' or a mix of the two