The Organisation of Economic Cooperation and Development (OECD) has already pointed out that Britain is suffering its biggest brain drain for 50 years, and then the Chancellor goes and increases tax for the wealthy and he cuts their pension tax relief in the latest budget!
Tax the wealthy and watch them move abroad must be his motto because who in their right mind will stay in Britain now? If you’re earning over £150,000 a year and you are not tied to the UK – and chances are, if you’re able to earn such a super wage you’re highly skilled and those skills are probably equally in demand elsewhere – why stay in Britain where you’re going to be punished for the nation’s debt!
Sure, the budget negatively affects every single Briton as they will all see tax increase on fuel, and public spending seemingly halt – but it’s the wealthy and the highly skilled Britons who have been hit potentially hardest by the budget. At Shelter Offshore we somehow think Britain’s brain drain is about to get worse!
As the Chancellor desperately flails around looking for something to bung up the massive hole of debt the nation has been plunged into, 50% tax on the wealthy seems as good a plan as any. But just like their daft idea to give anyone with a car over 10 years old £2,000 to buy a brand new car, (hmmmm, anyone with the cash available to buy a brand new car wouldn’t be driving around in a 10 year old wreck in the first place. AND, anyone with the cash available to buy a brand new car can now look in the free ads and pick up an ancient car for £200 before using it to cash in and get their ‘free’ £2000!), the idea of taxing the high earning professionals, who are the backbone of Britain, up to 50% is less than sensible.
The OECD has already pointed out to Britain and the rest of the world that there are in excess of 3.2 million British-born people living abroad, of whom more than 1.1 million are highly skilled university graduates. Me thinks the OECD will need to revisit the numbers in a couple of years as the Chancellor has at least given the higher earners a little forewarning. Those who could perhaps have stomached the previously proposed 45% tax rate will have choked when it was announced yesterday that instead the higher rate of tax on high earners will be 50%. And then to add financial insult to fiscal injury, the Chancellor added a reduction in personal allowances and pension tax relief too.
Well, don’t panic, if you are a high earner in the UK and you were using your pension to legitimately shield some of your income from taxation previously, if you move overseas and transport your pension pot with you, you can still contribute to it via QROPS, (qualifying recognised overseas pension schemes – they are backed by HMRC), and you can of course explore all the other investment opportunities available to you offshore. Because that’s the one good thing about Britain that the government hasn’t yet managed to change – we are all free to leave if we want to.
