The Tory press can publish all the tax avoidance guides it wants: the rich won’t flee a Labor government | Polly Toynbee

IIt’s a done deal – pretty much. At bookmakers you can get 14/1 on a Conservative majority at the next general election, while still betting on Labor to win, the chances are a measly 1/6. If you need further confirmation that Labor will form the next government, just listen to the clamor of wealth advisors telling their wealthy clients that it’s time to pack up their Louis Vuittons.

It is traditional that when a Labor government takes office, a loud and obnoxious handful of super-rich threaten to leave the UK, taking all their treasures with them. “Workers are coming for your wealth – here’s where to escape their taxes,” says yet another Telegraphic Scare Coin on “options for worried middle-class workers.” Middle class? The article goes on to discuss VAT on private school fees (only 7% of children) and non-dom tax (68,800 people apply for non-UK domiciled taxpayer status). The Conservative press uses the term “middle class” to describe the richest few percent, ignoring the UK’s actual median income. is £34,963 – barely non-dom territory. But it is politically convenient to claim that Labor is going after any homeowner, any taxpayer or anyone with an Isa, disguising the wealth of the super-rich under the guise of the general middle class .

In WealthBriefing, the “leading publication for the global wealth management industry,” private wealth manager warns that his customers will leave. She says: “While Labor seeks to abolish the non-domiciled tax regime, other countries seek to attract new immigrants with favorable tax regimes… many will leave. » And of course, here’s the thing: “It is essential to obtain legal advice as early as possible, plan the move and overcome immigration, tax and lifestyle obstacles related to migration to their new country. » Labor can swear blindly that there will be no rise in income tax, national insurance or capital gains tax, but business advisers like to warn that the shadow chancellor’s assertion that ‘we have no plans’ for further taxes hides unspeakable Labor horrors. Spear’s, the wealth management and luxury lifestyle magazine, reports: “‘Fire escape plans’ are being developed, alternative jurisdictions being considered and tax relief programs are discussed.

Here is a salutary story of the multi-millionaire Guy hands, who founded the private equity firm Terra Firma. In 2009 he fled with a bang, fearing Labor would target wealthy investors, as Gordon Brown struggled to cope with the financial crash. He chose Guernsey, with its 20% flat tax rate and zero capital gains tax. There was ridicule when he left his wife and children behind, asking them to come and visit him. But credit to him for admitting that it didn’t end well. He recently wrote: “Moving to Guernsey greatly impacted my ability to build and maintain strong relationships with contacts, on which my business success was based. I lost the flow of the market and ultimately was never able to raise a blind fund again. It’s better to make deals and fundraise face to face…I also lost connection with my team. He added: “For me it was a disaster. »

Private equity is using all its firepower to intimidate Labor into stopping their plan to close the ‘carried interest’ loophole, which allows private equity executives to describe their income. as capital gains, which results in less taxes. Hands tried to scare Labor into backing down, writing in the Telegraph that “although, miraculously, the UK largely retained the (private equity) sector after Brexit”, cities in The EU is “actively competing to get people to leave London on favorable terms”. tax regimes”. He nonetheless urged his fellow private equity barons to heed his experience, warning: “If taxes rise, while private equity executives can see themselves better off elsewhere on paper, they risk drifting away from their business ecosystem. »

In this context, the FT reports that Labor is under pressure to water down his private equity reform. But returning to yet another policy after giving up on £28bn-a-year green investment would be a big mistake: capital gains tax must be leveled to more closely align with income tax. income, as recommended by Tax Simplification Office. This loophole has helped capital gains almost triple over the past decade to £65 billion: today’s research from Arun Advani’s Department of Economics at the University of Warwick shows that only 0.5% of people made a capital gain last year. An area of ​​Kensington has made more capital gains than Liverpool, Manchester and Newcastle combined.

Taxes will increase the one who wins the next election, says the FT – because the spending cuts Jeremy Hunt has proposed for 2025 are impossible. YouGov finds most people expect it. But the mega-rich are right to fear that Rachel Reeves’ closing of their many loopholes will mean sky-high tax increases for them. If it cleans up tax havens, there will be fewer places to hide or hide your money.

Will they flee? They are not as mobile as they claim to be, with families, friends and roots that resist being uprooted. In addition, they are tired of London, tired of life, and they fear being very bored in these “culturally sterile” tax havens, notes Sam Friedman, professor of sociology at the London School of Economics. His team interviewed a raft of the richest one percent and found none who were considering making Guy Hands’ mistake.

Attitudes towards taxation are changing with the disappearance of Thatcherite petty statism. The British Social Attitudes Survey reveals that 52% of the population support higher taxes. Listen to the Confederation of British Industry and serious business who are calling for infrastructure investment today, not cuts. Patriotic millionaires may be a progressive vanguard, but its maxim is influential: “The country deserves proper investment; What better way to do this than by taxing the richest people? Hunt will waste public money on tax cuts that are not on voters’ agenda.

Labor has little to fear from wealth advisers, even though one of the richest people most likely to flee after the general election is the Prime Minister himself.

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