Wealthy UK Entrepreneurs Mull Emigration After New Tax Hike - Report

Tom Burroughes

27 April 2009

Two of the UK’s best known entrepreneurs are considering leaving the country in protest against UK finance minister Alistair Darling’s new 50 per cent top income tax rate, as leading figures from business and wealth management warn of a talent exodus, the UK newspaper, The Sunday Times, said.

The report coincided with that newspaper’s annual survey of rankings of the UK’s richest individuals and families, as reported elsewhere by WealthBriefing.

Hugh Osmond, the private equity entrepreneur, is thinking about a move to Switzerland. Peter Hargreaves, the co-founder of Hargreaves Lansdown, the financial advisor and wealth management firm, is looking at the Isle of Man or Monaco.

Last week, wealth managers told WealthBriefing that a number of individuals will leave the UK. There has already been pressure stemming from the UK government’s new £30,000-a-year annual levy on non-domiciled residents.

Mr Osmond, whose net worth is estimated at £230 million ($335.6 million), was quoted as saying: “A lot of people will be off. It’s highly unlikely that I will continue to have the UK as my country of residence. It’s just as easy to work from any close location — Switzerland or wherever.”

Mr Hargreaves, facing an extra £500,000 on his tax bill, warned: “I won’t pay, I’ll leave.”

Robert Pfeiffer, a partner at Compass Advisers, a mergers and acquisitions firm, said that businesses such as his did not need to be based in Britain. “We all love living in London but in the end it becomes an economic decision. The clients don’t care.”

He and his partners were discussing a move to Geneva. “Do we want the hassle of moving? Probably not. But there comes a point economically when it’s hard to justify being here,” Mr Pfeiffer said.

And Philip Lambert, chief executive of Lambert Energy, said his consultancy was “seriously considering” relocating abroad, saying the state had “total hostility or apathy towards entrepreneurs”.

Dozens of Britain’s best-known business figures have condemned the new tax rise. Sir Richard Branson said it was a “block to the next wave of entrepreneurs”. Tim Waterstone, founder of the Waterstone’s bookshop chain, slammed the tax as a “disincentive to entrepreneurs”.

Stanley Fink, the former chief executive of hedge fund Man Group, said: “Nobody believes that 50 per cent is a natural stopping point. There’s nothing to say for the richest it won’t go to 60 per cent, say for those earning over £200,000.

“There will be some successful entrepreneurs who decide to move to Switzerland or Ireland. I’m aware of one or two people who made active plans to decamp when Labour announced 45 per cent and will put those plans in motion,” Mr Fink said.