One of the world’s largest independent financial advisory groups is supporting a leading economic think tank’s warnings about the UK’s reliance on tax revenue from a small number of better off individuals.
It comes after its own research finds a growing number of the well-paid are looking to move themselves and their funds out of the UK.
The Institute of Fiscal Studies (IFS) is raising concerns that “lumping more taxes on the rich” is putting the country’s long-term finances at risk; whilst deVere Group reports that more than half (56 per cent) of its UK-based ‘high earner’ clients say they want to leave Britain within the next five years.
Nigel Green, founder and chief executive of deVere Group, comments: “The IFS is absolutely right to raise the alarm on ‘soaking the rich’ because these people, typically, have the resources to move to lower tax jurisdictions if the tax burden in the UK becomes too great. They are internationally mobile.
“Should they emigrate – and according to a recent deVere poll a high number very well could – government finances will suffer considerably because they contribute a disproportionately large amount to the state’s coffers. 30 per cent of all income tax and 7.5 per cent of total tax revenue is paid by those earning £150,000 a year or more.
He continues: “In a recent survey of more than 190 high earning clients, more than half revealed that they are considering a move to live and work or retire overseas within the next five years. The primary reason for this is that they feel taxation in Britain is stifling their financial ambitions.
“They tell us that they believe their hard-work, aspiration and success is being punished and they fear more punitive taxes on achievement could be on their way. As such, many are considering their options outside the UK.
“This should be a wake-up call for political leaders because the state is reliant on these people’s taxes.”
Mr Green concludes: “If the government is serious about having the better-off pay more tax, they should cut rates further and allow them to become wealthier. This would incentivise top achievers, who prop-up ‘The System’, to remain in the UK. However, I suspect that implementing this economically-sound philosophy would be political suicide for many politicians in the current climate.”