Thousands of Company directors leave UK after Labour's tax changes | Hacker News Reader

Thousands of Company directors leave UK after Labour's tax changes

ft.com

19 pointscolesantiago30 comments

Are they technically leaving if they are "non-domiciled"? That means their official home for tax purposes was never the UK.

It also means the tax difference of them leaving is near zero surely?

Non-dom was a special tax regime whereby for 15 years they didnt look at your income from abroad provided it stayed abroad. It costs 30k from year 7 to stay in this regime.

This was great for people who just want to come to the UK to work say in finance for a few years but don't want to move their inheritance regime or finances from other countries. It was much fairer than most people make it out to be since most other countries dropped the double taxation agreement if you opted for this, therefore you would also pay tax in your origin country.

This misses all the people who were "British" and used this scheme to avoid taxes.

Here's a list of prominent ones.

https://en.wikipedia.org/wiki/List_of_people_with_non-domici...

A Conservative MP who "inherited" the status.

A son of a British newspaper magnate that got it because his dad became a tax exile to France.

Hereditary peers in the House of Lords who were claiming to live abroad and so on

And many of the "other countries" in these cases are in fact tax havens like Monaco or Belize.

> That means their official home for tax purposes was never the UK.

They were still paying taxes on any UK income.

> It also means the tax difference of them leaving is near zero surely?

Only if you assume they didn't pay any VAT.

Majority of their potential tax liabilities were being avoided, otherwise why would they leave?

That's what I'm wondering. Hasn't this loophole been closed yet, or is that just what's happened? I can't read the article or archive.is, but if you're not domiciled in the UK for tax purposes then haven't you already "left" the UK in some sense?

Now we just need to deal with all the overseas territories and their tax arrangements. Do those count as "in the UK"? I believe not. But they benefit from the UK defense umbrella.

Typical how the likes of the FT keep pushing these articles en masse about such a small event, when the opposite which is magnitudes more widespread and keeps destabilizing societies more and more, is not.

It's all PR, entrenched interests.

Good riddance. Tax leaches, the lot of them. If you earn, you should contribute your fair share to your domicile society.

Actually this is very ignorant. I was one of these, left April 3rd. - These people contribute a lot, they employ people, start businesses, spend a lot... Most of them don't even use the NHS. All things that stimulate and contribute the economy tremendously. - In my case my nestegg was going to be taxed a lot more since it was optimised for tax somewhere else, moving it is complicated and risked UK inheritance tax which is handled better/more fairly in my country of origin and could have been a huge burden on my siblings and family business - Tax is a delicate balance, quality of life is not that high in the UK, it was just a good place to do business - If I am going to be taxed too much I would much rather not work and live in Italy, Portugal, Spain or Switzerland

But that's my point exactly. If you're not that fond of the UK, by all means go and live somewhere else and ensure your tax burden is minimized. But it's interesting that out of the 145,000 directors in the UK, only 1000 have chosen to jump ship because of these supposedly punitive new regulations.

I also find it very difficult to be sympathetic to folks who feel that their large amount of money earns them the right to minimize the payment of taxes in the country they live. It just seems a little selfish to me. Sorry about that.

Surely you must see it's more nuanced than that? The old regime worked to say that if you kept your money abroad then we wouldn't tax it but we would tax it any money you generated in country. These people were often on high wages meaning we would still get some income from them but not money that we had nothing to do with.

It would probably have been a better idea to require periodic investments into UK businesses to increase the tax take rather than scrap it altogether. Thats said the UK requires a wider culture shift when it comes to money so it wouldn't have made much of a difference.

I understand completely what you're saying, but I've got a feeling this new regulation is aimed at those who don't earn any money in this country and therefore don't pay any tax in this country - even though they're living here taking advantage of the benefits and infrastructure etc.

I do agree that maybe there is a more nuanced approach to this which would encourage investment into UK businesses, but nobody ever said politicians were the brightest people on the planet. :)

It exactly how you say, with a lot of people not exactly working in UK leaving, people who made money abroad. I know plenty who do. I can see your point here.

The problem here is the way they are implementing it, right now you would still pay taxes on brining money to UK, also all of those people who happily pay certain amounts or smaller percentages on % of foreign income to live in the UK. However 45% of income made completely outside of the country is a robber and people are leaving to UAE, Italy, Switzerland. Italy is charging 200k flat now a yearn UK they would pay more. Also office of companies are getting relocated, they stop spending money here, they would pay higher to stay in UK.

So if you say you were to get 300-500k per year from those people and now you get 0, and thousands of people leaving it goes to billions in budget loss

I understand. I really don't have enough information to attach fixed numbers to the circumstances. Whether it's £350,000 or £10 is a mystery. And maybe that's the problem.

Maybe it's fine that people go to UAE Italy and Switzerland, because it's difficult to ascribe any solution when the participants are so secretive in their financial movements.

It's kind of interesting that people are becoming exercised by this tax, because it's clear that they don't really value staying in the UK as much as saving some money. I find that a really interesting observation.

tax base is narrow the middle class is gonna get squeezed even more to make up the difference

Yeah, chasing away net tax contributors is a major policy win. /s

If they're offshoring the money and/or living off rent instead of building productive businesses and investing in the future, their net contribution is negative.

*IF*

Is there any evidence for this fine theory that you constructed in your head?

Even in this straw man hypothetical, the exchequer is better off having more VAT paying residents.

Yea... except they arent net tax contributors. They are taking advantage of a tax code to not have to pay. They hurt local economies.

> Yea... except they arent net tax contributors.

They almost certainly are. Even if you assume they didn't earn any UK income, they were still paying VAT.

So you're saying its worth it to keep these guys because while they do cheat the system to not pay MILLIONS in taxes. Through VAT they do pay a few pense in taxes. So its ok?

The end result is a reduced tax take. Like I said, major policy win!

I'm not sure that's quite the argument you think it is? The fact is that losing a thousand well-off selfish people is not really going to put a dent in the UK's financial well-being at all is it? This is not a question of 'for the better good' at all. There are hundreds of thousands of very rich people who choose to stay and contribute to the society in which they live. Which is admirable.

A policy that results in a shrinking of the tax base is not admirable.

Not sure how much of a shrunken tax base a thousand fleeing rich people is going to be?

They weren't chased away, they were asked to pay tax like the rest of us. Poor darlings. /s

https://archive.is/soyFE

“[Thousands of c]ompany directors leave UK after Labour’s tax changes”

Actual title has substantially different import.

HN filter must have chopped the "Thousands" off, should be fixed.

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