Tax Increase & People Leaving The UK
It has been reported that two thirds of Britain’s top earners appear to have left the UK after the 50p top tax rate was introduced. The amount of tax paid in the UK by those with an income in excess of £1m fell from £13.4 billion to £6.5 billion after Gordon Brown introduced the new tax rules in 2010.
This drop is thought to have occurred because over half of Britain’s highest earners deserted the UK and many others reduced their taxable incomes to avoid paying the new high taxes. Some are said to have avoided paying the new top tax rate either by bringing forward payments or delaying them, by moving earnings abroad or by choosing to work less
16,000 workers declared an income in excess of £1million to HM Revenue and Customs in 2009/2010. In 2010/2011, after the new tax rules were brought in, that number dropped to just 6,000.
Now though the number of £1million plus earners in the UK appears to be rising again. This coincides with Chancellor George Osborne’s announcement that the top tax rate would be reduced to 45p from next April as part of the Budget earlier this year.
Mr Miliband claimed that new figures showed that 8,000 people earning more than £1 million this year would gain an average £107,000 each as a result of George Osborne’s budget decision to cut the top rate to 45p for those earning more than £150,000.