In 1974 Labour pushed the top rate of income tax to 83%, with investment income taxed at an eye-watering 98%. And guess what happened? Ask anyone who was alive back then. The big earners took their money, talents and ideas abroad where getting out of bed to earn a quid was worth the effort.
Tax rates had been high in the past, but by the 1970s the high net wealth individuals of the day had become global citizens. They had options and they took them. Many of this new class of tax-exiles never returned. And the same is happening today, with the only different being the means to bunk off to a more friendly tax environment is available to many millions more than 50 years ago.
People like me who saw the writing on the wall have already made the move and thousands more are getting shot of assets before Capital Gains Tax (CGT) hits 45%, up from the current rate of 20%.
As recently as 12 months ago now-chancellor, Rachel Reeves, said Labour had no intention of ramping up CGT. One of many lies surfacing since the General Election! This non-sensical socialist tax-grab, shows again Labour’s lack of understanding of even the most basic laws of business .
It is driving out those established entrepreneurs and wealth creators, and who wants to build a new business from scratch, pay corporation tax, employ people, and then hand 45% over to the Government when you sell up?
In CGT when I sold Pimlico Plumbers, under Labour it would have likely been closer to £50 million!
Yes, I made a lot of money on the sale. But that was the payout for half a century of grafting and taking risks. I was never guaranteed a big payday, and a few times I almost lost everything.
People like me become entrepreneurs because it’s in our DNA. So I’m not going to say many will jack it in, because like me they physically can’t. But they will take their risks elsewhere, in places where they understand business, and the mindset of the people who start and run them.
