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More than 60 of the UK’s wealthiest people contributed more than £3 billion a year in income tax, according to data obtained by the BBC. Compiled by HMRC and relating to the latest available year, 2021/22, the figures reveal that each of these individuals earned at least £50m in that year. UBS predicted in July that the UK could lose 50% of its millionaires due, in part, to the decision of some to relocate to low-tax countries. The Institute for Fiscal Studies has warned that the loss of just a few super-rich residents would create a “relatively big hole” in Treasury finances.
The Green Party has called claims that taxing the wealthy more would lead to their emigration from the UK “not credible”. In August, Chancellor Rachel Reeves refused to rule out a capital gains tax increase. Stuart Adam, senior economist at the Institute for Fiscal Studies, warned that payments were concentrated upon a small number of people, saying that “there’s clearly a risk there that Rachel Reeves has to think about”. However, Green Party co-leader, Carla Denyer, argued that “there are lots of reasons that the wealthy choose to live in the UK” and many would accept paying “a bit more if it means a happier and healthier society”.
Fears have been raised that tax hikes could prompt the flight of the wealthy from the UK. HMRC had initially blocked the release of the information acquired by the BBC, citing privacy concerns but subsequently agreed to disclosure following further requests. The top 60 earners represent just 0.0002% of taxpayers and contributed 1.4% of income tax received, which amounted to a total of £225bn in the 2021/22 tax year. The UK government has declared its commitment to addressing tax system unfairness, with a spokesperson stating that “We are removing the outdated non-dom tax regime and replacing it with a new internationally competitive residence-based regime focused on attracting the best talent.”
Some commentators have called for the introduction of an “exit tax” on wealthy individuals leaving the UK, with the IFS suggesting that it could discourage those taxed on pre-relocation-acquired gains even if selling the asset after departure. Other countries utilise such taxes to prevent ultra-wealthy residents from not only paying taxes but also from contributing to the prosperity of the country.
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