There is hardly a day goes by when we do not hear a story about someone who is threatening to leave the UK because of our tax regime. Indeed,there was one this weekend in the Sunday Times, stating that bankers are now reluctant to come to the UK,and our best talent is leaving.
But the Observer has another slant on the story. As it notes:
Despite all the frustration expressed in public, evidence of an exodus of top-flight executives is all anecdotal. A report published yesterday (Saturday) by the Corporation of London named just a handful of insurance companies and hedge funds that have left the UK. Insurers Kiln, Hiscox, Beazley and Brit have moved their tax bases away from the UK, and three hedge funds — Blue Crest, Brevan Howard and Moore Capital — have moved to Switzerland. Traditional fund manager Henderson has relocated to the Netherlands.
There is also hard evidence that others are committing to the City. Swiss bank UBS has commissioned new offices in London while Japanese bank Nomura, now a major presence after buying much of the European operations of Lehman Brothers after its collapse, has just moved into new premises in the heart of the City. Wall Street bank JP Morgan is also deciding whether to set up shop in Canary Wharf.
Highly paid individuals appear to be staying in London despite promises from their employers to make it easy for them to leave for lower-tax regimes. A pledge by Terry Smith, chief executive of money broker Tullett Prebon, to allow staff to move overseas does not appear to have been taken up. High taxes or no, London is still their residence of choice, at least for now.
If that is an exodus,I am Bulgarian (and there is not a hint of it that I know of anywhere in my family).
This means three things. First there is an awful lot of what might the likely be called misinformation pouring out of the mouths of bankers and most especially accountants on this issue.
Second, the claims of significant tax loss are clearly vastly exaggerated. In fact,it is of course the case that we can afford to lose a few who objects to higher taxes in the UK when the vast majority (which looks to be about 99.99%) except that higher charge.
Third, the continuing claims (and there were a host of them noted in the Observer story) but people will leave have exactly the same status as past threats: that is,they are all a load of rubbish.
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Why do such “exodus” articles always focus on the finance industry? Populist banker bashing? There are highly successful individuals in other areas (entertainment, sport, engineering) who will be contemplating the same things, yet they are never mentioned.
More worrying than those leaving are high achievers, from any field, who might have come to the UK under previous tax rates, but who will now select other countries instead. Those countries will benefit, to the UK’s detriment. Usually forgotten, the cost of increased tax rates includes not only measurable emigration, but also unmeasurable forgone immigration.
@Derek King
and there is absolutely no evidence whatsoever that people are leaving for the reason that you stay. There will be a brain drain but it will be caused by a lack of government spending, not because of taxation.
Get real, smell the coffee, and realise that it is this government and the cuts that it is promoting that will be of greatest harm to this country.
Your argument is, in comparison, the mere promotion of greed – and that has never yet benefited society
@Derek King
More worrying than those leaving are high achievers, from any field, who might have come to the UK under previous tax rates
One wonders why the UK cannot generate its own pool of “high achievers” out of a population of 60 million and a world class education system?
We don’t need to model ourselves on seedy offshore tax havens.
This comment has been deleted. It failed the moderation policy noted here. http://www.taxresearch.org.uk/Blog/comments/. The editor’s decision on this matter is final.
Accountants who think that bankers are moving to Switzerland should at least have a look at the income tax rates in the canton of Geneva:
“In the Canton of Geneva the highest marginal income tax rates for federal, cantonal and municipal taxes amount to 51% of the taxable income (city of Geneva) and 43% (municipality of Meyrin). In the neighbouring Canton of Vaud the highest marginal rates amount to 51% (city of Lausanne).”
http://geneva.angloinfo.com/information/11/tax.asp
I am thinking Grant Thornton are highly incompetent…
@ Hum…, foreigners don’t generally pay the published rates in Switzerland.
@Greg
That’s the trouble isn’t it? Only the little people pay tax – which is the way you like it.
And why some of us campaign for Tax Justice
@ Richard
I think you’ve got the wrong end of the stick here. I don’t think i’d describe the Swiss residents who work in very senior positions in Geneva as “little people”.
And personally I have no problem with paying tax.
@Greg
I was quoting Leona Helmsley
@ Greg
Of course they do. You clearly have no idea how the forfait system works. More nonsense.