More Expats Flee From London’s Crippling Taxes

The days when Great Britain was an attractive nation for international professionals have long gone; no longer is the City of London a draw for high earning executives, and no longer is the UK a good place for families from abroad to bring up their children and earn a decent salary.

The high taxes and charges levied against so-called non-doms are sending foreign workers from the likes of America and Australia home or elsewhere overseas as they repeatedly point out that there is nothing attractive to them about living and working in Britain anymore.

So why is the government surprised to learn that not only have the numbers of Britons expatriating risen in recent years, but that now the executives and professionals who brought their skills and experience from abroad to benefit the UK are fleeing from London because of crippling taxes?  What’s more, why isn’t anyone doing anything to keep the talent in Britain at all costs – after all, it needs all the skills it can get to kick start an economy overburdened with debt.

In a recent report from Bloomberg, the plight of thousands of American expatriate families in the UK is brought to light as one after the other they are leaving the high tax, poor quality of life combo in the UK behind, and either returning to the States or moving to live and work and contribute elsewhere overseas.  The number of US citizens in Britain fell almost 4% to just 126,000 in the 12 months to this month according to the Office for National Statistics. 

The Americans’ situation is a reflection of that across all international communities in the UK where there are well educated, top performing professionals and executives employed in senior positions within industries such as finance and IT.  These people are finding that all of a sudden Great Britain is a hostile country; an unwelcoming nation where high taxes levied against foreign workers makes it abundantly clear that the UK no longer wants overseas workers.  What’s more, in industries such as banking and finance, jobs are being cut faster than the Chancellor can increase taxes, with the Confederation of British Industry estimating that the UK’s financial industry will have lost about 45,000 jobs in the first nine months of 2009.

Now, we’re not talking about a class of immigrants who have arrived in the UK seeking work or even support from the state who are fleeing these shores, we’re talking about the top end of professional society who have been headhunted and invited to Britain who are being forced to pay a fee to live in the UK and retain their non-domicile status and who will now be subject to a 50% tax charge if they earn over £150,000 a year.  One case highlighted by Bloomberg shows an American who is leaving the UK after the economic mess in Britain has seen his commissions fall away and excessive taxation erode the rest of his salary so that he is now earning 75% less than he was when he moved to Britain.

A consultant from CRA International, the global consulting firm that offers expertise to major law firms, industries, accounting firms, and governments around the world stated in a report for the City of London that: “Expats feel the tone has changed; it’s less welcoming [in the UK].”  Therefore it is of no surprise to us that expats are leaving the UK as fast as Britons are leaving the economic mess their nation is in.  It’s just a shame that the British government is not aware of the situation they are creating and that this will leave the UK facing a huge skills shortage, a tax gap and a situation where the talent that is able to leave has gone, leaving a nation scrabbling round trying to fix itself.