Almost three in four (73 per cent) High Net Worth individuals (HNWIs) think taxes will increase in the next 12 months, according to a new survey by Wealth Club, with 84 per cent of wealthier individuals of the view that they will pick up the bill for future increases1.
If taxes rise, nine in ten HNWIs are concerned about the impact this will have on their wealth, and of this group 17 per cent say they are extremely worried. Looking more broadly, 43 per cent think an increase in taxes is one of the biggest threats to their wealth, but the biggest threat cited was a possible change in Government (69 per cent).
Should taxes rise significantly, two in five (40 per cent) say would consider emigrating from the UK.
Alex Davies, CEO and founder of Wealth Club comments: “The UK’s top earners paid a total of £54.3 billion in income tax last year. They are now bracing themselves for further tax rises and have no doubt as to who will foot the bill.
“Whether or not they will pay up and shut up remains to be seen. However, the fact that 40 per cent would consider moving abroad if tax rises further, perhaps suggests that the goose can be squeezed no more. If 40 per cent of wealthier individuals really did leave the country £20 billion could be lost in income tax revenues alone.”
Reflecting further on UK taxes, the majority (67 per cent) of HNWIs think income tax is the fairest tax, and 42 per cent think the rate income tax is charged is about right. Unsurprisingly, inheritance tax fares worse – 73 per cent think it’s unfair or grossly unfair and 85 per cent consider the rate too high.
Alex Davies: “If nearly half the people consider a tax “grossly unfair”, as is the case with IHT, then there is a real problem. Any attempt to increase inheritance tax will be hugely unpopular and politically suicidal for the party that tries to introduce it.