Top tax rate ‘exodus’ fails to materialise

THE 50% TOP rate of income tax did not lead to the “exodus” that had been predicted, leading lawyers have said.

The chief executive of Tullett Prebon brokers, Terry Smith, told Financial News that the first UK-based team has accepted the company’s offer of moving to “more certain” tax regimes. The initial offer was made 18 months ago following the increase in the top rate of tax to 50%, as announced in the previous year’s Budget.

David Jervis, partner and head of tax at international law firm Eversheds, said that “there has not been an exodus on the scale predicted”.

“This is not actually that surprising,” he added. “The 50% rate has often been referred to as temporary, and recent statements from the chancellor and other senior members of the Coalition continue to back this up. The hope that the 50% rate will not last long, coupled with the significant inconvenience associated with relocating and London’s continuing position as a leading financial centre, has probably served to keep the migration floodgates closed for the time being.”

Related reading