Top rate tax: Should you stay or should go... to Gibraltar?

By James Bennett, Managing Online Editor, Melcrum

I’ve just come back to London following three and a half years in the United Arab Emirates, but it seems that many more of you are thinking of heading in the opposite direction. And all thanks to Alistair ‘Robbing Hood’ Darling and his decision to raise the top level of tax to 50%, a number not seen since Belinda Carlisle rather ironically warbled ‘Heaven is a place on earth’ in 1988.

The measure comes into effect in a year’s time, but doing this and simultaneously cutting pension tax relief for the land’s wealthiest money makers, including some of the chief executives internal comms industry high-flyers report to on a daily basis, could well spark the beginning of the end for London as one of the world’s most competitive business and financial centres.

The ‘50p rate’ coupled with the effect of last year’s tax rises on non-domiciles, or ‘non-doms’ – wealthy foreigners living in the UK who can keep overseas income out of the British tax system – could send thousands of lolly loaders, the ones that have nowhere to put their spare cash (may I suggest my pocket, Jasper Conran espresso cups aren’t cheap) to places like Dubai, Singapore or even Baboon-riddled Gibraltar. I recommend, however, you don’t head to one of the most bizarre places on the planet. It would be a bit like telling your wife and children that you were moving from Battersea to the Moon and that your neighbours would be a blend of in-fighting smuggling Spaniards and thieving primates. Not unlike some parts of Britain I’m sure you’ll agree.

If this happens then the Brain Drain to end them all could well ensue. Bad news on one hand because a long line of top level and highly experienced CEOs and internal communicators could jump ship to pastures new but perhaps good news on the other. This could leave a temporary senior communicator vacuum but one which would soon be filled by eager, young, fresh, innovative minds, overflowing with ideas ready to tackle an age where social media is rapidly becoming more important than talking to any of your relatives.

@motherdearest> I for one won’t be twittering my mum anytime soon, but then again I’m sure some of you in the internal comms sphere already are. Do you or some of your company’s high-ranking leaders remember 1988 and, in a similar vein to Bros’s hit that year, have you been shouting ‘I owe you nothing’ whenever Darling’s mug pops on TV, are you considering escaping taxing times for warmer climes, and if so what would this mean for business and the internal comms industry? Let me know by either replying to this blog or emailing me at james.bennett@melcrum.com.

Comments

[Lindsey Simpson]

Interesting blog although I find your anger a bit of a turn off, particularly as it seems to me (and I'm not even a socialist)that it's quite fair for high earners to pay more. Although the bankers and government are at the root of the problem, as an electorate, and as business people, we have taken advantage of the booming years and extensive credit, and no doubt benefitted from the housing boom and other ways in which many people have got materially wealthier. We can't now just point the finger and moan.

In the 80s Geko said greed is good. Actually it isn't. It has destroyed the world's economy. Genuine talent and success is good - let's use this opportunity to redefine what success is and build a stable and healthy social and economic future.

I'm not going anywhere. I'm actually quite pleased that my children are going to grow up without the ridiculous, soul-destroying levels of consumption that were about even six months ago. Perhaps they'll be happier, more fulfilled people. When I was a kid no-one was a bit worried about looking good or brands. We were out on bikes and roller-skates. And it was great.

I'm not letting the government off the hook by any means and I do think some of bankers and members of government should be spending some time at her majesty's pleasure. I am sure if I had been as incompetent in one of my roles, I would have been rightly pursued for compensation.

But we are where we are and isn't it easy to be wise after the event. Let's use the wisdom and get on with it. We're all in it together.