Ten high earners leave UK every week due to tax
Entrepreneurs and business people are leaving the UK at the rate of 10 a week to escape higher taxes and restrictions on pensions, according to a survey.
Sunday Times Rich List compiler Philip Beresford has analysed data from Companies House that shows more and more limited liability companies and partnerships are moving offshore.
The main beneficiaries are Jersey, Guernsey and the Isle of Man.
About 6,725 British businesses are based in the Channel Islands and 615 in the British Virgin Islands, and the number has increased by 500 in a year, says Beresford.
The main factors affecting the moves abroad are:
- Impending 50% tax for high earners from next April
- Increased National Insurance Contributions
- New restrictions on pension contributions
The tax advantages for companies and international workers are much lower taxes - for instance Jersey has no capital gains tax, capital transfer tax or VAT.
Workers earning £90,000 may be hit by super tax
Guernsey-based Clydesdale Bank International believes that the number of wealthy people leaving from the UK could become an exodus when the reality of the 50% tax rate bites.
Clydesdale has calculated that not only are high earners picking up £150,000 an year in the tax net but also when taxable benefits like cars or loans are factored in, the 50% rate could affect taxpayers with a salary of £90,000.
“We have already started to see and hear of intermediaries as well as individuals looking to transfer capital to institutions, or work with structures here in Guernsey,” said James Blower, managing director of Clydesdale Bank International. “The knowledge that people earning less than the £150,000 threshold may also be liable for the full 50% tax rate could lead to even further enquiries. It may ultimately also mean a wider range of earners doing business in Guernsey.”
Income that will be subject to the 50% tax can come from various sources, such as salary, taxable profit from a trade, state or private pension, bank interest, share dividends, rental profit, and redundancy payments.
