Talent will be forced abroad due to 50p tax
May 18, 2009 by admin
Filed under News, News-Credit-Cards
Following the recent budget, where the Chancellor, Alistair Darling, announced that those on a certain level of income would be charged a new, higher tax rate, some industry officials have expressed concern that the new level of tax could end up forcing much of Britain’s talent abroad.
High earners are set to face the highest tax rates since the 1970s, with Darling stating that the 350,000 people earning in excess of £150,000 a year will be subject to a new 50p income tax rate.
In fact, as a result of National Insurance hikes and reductions in certain allowances, some of the income of these top earners could be subject to a 61.5 percent tax rate. Some are concerned that top earners, who are often talented professional, will not be prepared to put up with these tax hikes, and that Darling’s new rate could end up driving much of Britain’s talent abroad to places where the higher earners are not penalised in this way.
The new rate will be amongst the highest in Europe, and is set to come into force next year. It has been revealed that many higher earners have already fled to places such as New Zealand over the past year, and other lower tax destinations will become increasingly appealing to higher earners, which will defeat the object of Darling’s plan, as there will be fewer people to tax.
Tags: recent budget, chancellor, higher taxes, switzerland, 50p personal taxOne industry expert said: ‘Countries like Switzerland will look increasingly attractive to people in the key industries needed to lead the UK out of the recession’.
Another said: ‘It is naive to believe higher taxes generate more income. Higher taxes encourage avoidance.’
Everything in the UK is expensive not just the tax!