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JP Floru: Families from my ward are fleeing from the 50p tax rate

By JP Floru

Residents in my ward (Hyde Park, City of Westminster) are fleeing abroad to escape from the 50p tax rate. I have heard similar stories from fellow councillors for areas such as Kensington, Knightsbridge, Pimlico and Mayfair. The people who are fleeing tend to be British citizens, therefore, people who pay their UK taxes in full – as distinct from non-doms, who have a lesser incentive to leave. The houses are bought by foreigners who are either non-doms, or who will use the place as a pied-à-terre. In other words, people who do not pay income tax. The shortfall in the nation’s total tax-take will ultimately need to be paid by those remaining: you and I.

My information is purely anecdotal. I know of four families from my ward who have fled in the last six months. Suddenly a woman from the St. John’s Church Choir disappeared. When I saw her back many months later, she said they had moved to Switzerland. Her husband runs a language school business. When I asked a mutual friend for news about Mr. & Mrs. G.C., the friend told me that they now lived in Guernsey. Mr. G.C. used to be the Chairman of the Conservative Ward Committee about ten years ago. Yesterday, at an event in my ward, I heard that family S. had just moved to Singapore. Another lady, Mrs. R.K., told me that she and her husband now live in Switzerland. I am sure many, many more are leaving, but I do of course not know them all.

An argument I often hear is that “people do not just leave for tax reasons”. Why would anyone want to live in boring Switzerland? Or in Singapore, where you are fined or thrown in prison for small mistakes? Well, I have news: people from my ward have apparently decided that the English sunshine, the convenient transport system, and the friendly interaction on the streets of London are not worth staying for.

I don’t think many people will deny that if the tax was, say, 80% (instead of the current 62.5% of income tax and national insurance), a lot of people would leave. If it were to be 75%, many would still leave. If tax was 10%, very few would leave. It is therefore a matter of degree. 50p is highly symbolic. And people are leaving.

The leavers, who were UK taxpayers, are being replaced by people who do not pay tax here. Sooner or later, you and I – or our children – will have to pay for the shortfall.


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