Whenever there's talk of tax increases we always get the same response: the rich will leave. Let's ;eave aside whether that would be a good or bad thing for the moment, and let's just say that whatever they threaten they don't leave.
In 2009 I drew attention to a number of people saying they were going to leave because of the threat of a 50% tax rate. Amongst them was Peter Hargreaves, co-founder of Hargreaves Lansdowne, this being based on a report in the Telegraph.
Today he pops up in an interview in the Guardian. Any hint given that he's gone? No, none at all. What does he say:
"If I lived abroad, I would be £6m better off by reducing my tax bill. But why would I want do that? I only spend a minuscule amount of my capital, my wife likes clothes, but she doesn't go for the top designers, and we both have amazingly modest cars [a Peugeot 308 and a five-year-old Range Rover].
As for owning a place overseas, Hargreaves can't think of a worse idea. "It's enough of a hassle running your home here; there's always something going wrong. Why would I want to take on problems thousands of miles away?"
A Range Rover is an odd definition of modesty, but again, let's ;eave that aside. Shall we instead safely note that any previous talk about going abroad to avoid tax can safely be put in the pile I'll politely call 'bluster'? As all such talk always is.
Next time someone says this politely tell them to send a note when they'e really gone, and don't hold your breath whi waiting for it to arrive.
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They have it too good?
Some will bluster, but some actually will up sticks and go. One family I know (the son is in my daughter’s class) are going this month. As I understand it high rates of tax in the UK are a major part of the reason to move.
You mean, their tour in the UK came to an end?
The ‘Idi Amin’ solution would be to let them go, but keep their (our) money.
The right answer to these people is “****-off and don’t come back!”
And to extend the point, why do the Right believe these threats are a political weapon when they so clearly smack of a lack of patriotism?
Many people reading such threats actually think “Fine! Bugger off then!”
Just so!
Re the article in the telegraph: I find it hilarious that a man who made £40m is complaining about the prospect of paying £50,000 a year tax. Assuming he has all of the £40m in the bank (unrealistic I know) and assuming he earns 3% interest he’ll make £1.2m a year. A 4% tax rate on his income…how awful.
Is this a guy who just says whatever the interviewer wants to hear? To the telegraph it’s “I will do anything to avoid tax”. To the Grauniad its “Tax is a price worth paying”.
Lansdown moved to Guernsey. Like Guy Hands, he is one of Guernsey’s ‘special people who must be right about everything’.
Richard – It seems that we have a ready-made barometer to measure this. How long will it take to fill the new flats at 1 Hyde Park?
1 Hyde park: The movie.
http://www.onehydepark.com/#/intro
http://newsthump.com/2011/03/10/government-urges-poor-people-to-die-younger/
A couple of points.
Firstly, who wants to be billionaire in Nigeria, Jersey or a miniscule Swiss canton? No one. What the super-rich want is to take all the benefits of living here while pretending to live somewhere else for tax.
Secondly, we need to align citizenship law and tax law. If they bugger off they and their off-spring should lose their British passports. If it goes wrong in Nigeria etc, tough luck, they stay there!
RM – the 50% tax only hits (compliant) higher middle class earners. The rich are able to avoid/evade/ “evoid”
any rate of tax
richard. I will assume that you would at least admit that the UK currently has some of the highest personal tax rates in Europe? the fact of the matter is that a reasonable proportion of high net wealth individuals are relatively mobile – do we really want these people leaving when the contribute substantial sums of money through the economy (via stamp duty on silly priced flats, VAT on expensive purchases etc etc)?
I note your email address
I note you suggest you’re sarcastic
I suggest you are either being so – or are just plain wrong
Our effective VAT rate is low
Our higher rate taxes for the vast majority are totally reasonable – and 50% is unfortunately too avoidable
And more than that – the evidence is people are not going – haven’t you noticed the latest ONS stats?
So whatever the reason – the stats don’t support a word you say
“the fact of the matter is that a reasonable proportion of high net wealth individuals are relatively mobile ” – is this really relevant? Surely more relevant is that they find it easier to e-void on-shore with impunity and to falsify their true residence?
how is our effective VAT rate low – isnt it 20%?
it would be nice if you actually addressed the question rather than make arrogant comments. Isnt it better that they stay here and spend their money here?
They do
As I have already shown – this weekend
Why don’t you deal in facts, not myths
And compare EU VAT rates and ours is not high
you said our effective vat rate is “low”……. now you are saying “it is not high”
make your mind up
a quick search on google would suggest that what you might call the large mainstream EU countries are as follows:
Germany: 19%
France: 19.6%
Spain:18%
Italy:20%
so now tell me how you categorise the UK’s VAT rate as “low” which you did above – our are you changing your tone in the face of facts to “not high”? im expecting an arrogant and ill thought out response in reply.
I admit I am surprised at myself for letting such an inappropriate comment on here
But let’s pander you
“It is not high” is entirely consistent with “low”
And I know trolls don’t know this but tax is a combination of rate times base
In the UK we have a low base because many items are exempt – especially the excess of financial services we consume
And rates are low – we have a large zero rate band – much bigger than most countries e.g. on food
And we have a low rate on domestic fuel too
Added together my comment is right even though I disapprove of 20% rate
And your comment is as usual therefore an exercise in aggression and error, but is not informed comment
Which is why you will not comment here again
You have apparently identified one case where an individual may have threatened to leave but did not (or has not yet). Extrapolating this to all of “the rich”, though, is an almighty stretch of the facts.
No it isn’t, it’s an exposure of what is commonplace hype that lacks substance