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Thread: Tax exodus begins

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    Tax exodus begins

    One in eight people registered in Britain as non-resident for tax purposes left the country in the last year for which HM Revenue & Customs (HMRC) has records.
    The 12 per cent decrease during the year to April, 2009, demonstrates that tax-driven emigration is not just an option for companies like Wolseley, the FTSE-listed plumbing group that said this week it is leaving Britain for Switzerland and simpler, lower taxes. Accountants say the decline in non-resident numbers reflects HMRC’s tougher stance toward wealthy individuals and its campaign to raise revenues.

    HM Revenue & Customs (HMRC) defines non-resident taxpayers as individuals who spend less than 183 days in the UK during the tax year or whose visits to the UK do not average 91 days or more a tax year over a maximum of four years.

    Richard Mannion, a director at accountants Smith & Williamson, said: “The statistics indicate that the number of UK taxpayers registering as non-resident fell from 148,000 in 2007/8 to 130,000 in 2008/9. But another way of looking at the same figures is to say that a total of 278,000 taxpayers left the UK in those two years, which seems a staggeringly high number.” [my emphasis]

    Emma Loveday, a partner at City lawyers Wedlake Bell, said: “These figures go to show that high net worth taxpayers are highly mobile. The Government can’t just relentlessly increase taxes on them and expect them to keep their money in the country.

    “The Government has earmarked an extra 900m for tackling tax evasion. HMRC will target those paying the 50p rate of income tax and taxpayers with money offshore. For wealthy foreigners, this will set alarm bells ringing.

    “The 50p tax rate for those earning over 150,000 together with the rise in capital gains tax (CGT) to 28 per cent has undoubtedly had a further impact. The vilification of resident foreigners, so called non-doms, over the last few years has left many of them feeling distinctly unwelcome in this country.”

    Mr Mannion added: “The numbers no doubt reflect in part the start of the recession and the consequent reduction in employment opportunities. My own daughter was made redundant in London the week before Christmas 2008 and went to work in the Cayman Islands. However she has yet to notify HMRC and so the 2008/9 number is slightly understated!

    The full story available from here : Tax exodus begins – Telegraph Blogs

    Yet again this illustrates the very fine line a government has to tread between attracting, and keeping, both wealthy individuals and globally mobile companies to these shores. The tax hikes which were implemented by Labour - the introduction of the 50p top personal tax rate in particular has already cost the exchequer more in lost revenues than it'll bring in - and the failure of the coalition government to yet roll back the changes and rationalise our tax system are going to cost this country dear in the future.

    In a world where tax competition is fierce, despite the misguided efforts of several international organisations like the OECD to 'harmonise' them, any country which wishes to attract investors has to make concessions to attract business, and as has been shown time after time, people will only bear a certain level of taxation, especially if the proceeds are being wasted on politically inspired projects, before they cry enough. Then those who can leave, will leave.
    Socialism in general has a record of failure so blatant only an intellectual could ignore it - Thomas Sowell

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    Re: Tax exodus begins

    I broadly agree with you, but:

    Quote Originally Posted by Midas View Post
    the introduction of the 50p top personal tax rate in particular has already cost the exchequer more in lost revenues than it'll bring in
    Have you actually got figures for that?

    In a world where tax competition is fierce, despite the misguided efforts of several international organisations like the OECD to 'harmonise' them.
    Why is that misguided? If properly implemented it could go a long way to remedy this problem.
    So unproductive has conservatism been in producing a general conception of how a social order is maintained that its modern votaries, in trying to construct a theoretical foundation, invariably find themselves appealing almost exclusively to authors who regarded themselves as liberal. - F.A. Hayek


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    Re: Tax exodus begins

    Quote Originally Posted by JacquesMagique View Post
    I broadly agree with you, but:

    Have you actually got figures for that?
    Not specific figures, no, although I imagine they're there somewhere. I'm basing that on both what I've heard mentioned at an Institute of Directors meeting and from a couple of more generalised articles in the business press which cited the billions in lost revenues which would occur after just two major hedge funds said they were leaving the UK as a direct result of the introduction of the tax.

    Why is that misguided? If properly implemented it could go a long way to remedy this problem.
    Misguided because it'll never happen. There'll always be countries who will skew their tax rates to offer advantageous terms to foreign investors. Despite the efforts so far, at I'm sure enormous cost, the list of countries which are offering lower tax rates has actually increased over the decades.
    Socialism in general has a record of failure so blatant only an intellectual could ignore it - Thomas Sowell

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