On that 50 p tax rate

Mr Hands, who is chairman of Terra Firma Capital Partners, has moved to Guernsey in recent weeks, according to people close to him. His decision to relocate makes him the most high-profile City executive to quit Britain over the new tax rules amid growing fears of an exodus of talent. A friend of Mr Hands said last night: "Guy has gone offshore to Guernsey in view of the new tax regime.

"With two thirds of his income, including national insurance, now going to the taxman, he did not have much choice."

It doesn\’t take too many such people moving to reduce the take from the higher rate to nothing. Or even a negative number.

4 thoughts on “On that 50 p tax rate”

  1. The article is carelessly worded – it should obviously read “quit the United Kingdom”.

    The point clearly still stands though.

  2. Hands is clearly grandstanding here (a bid for Tory office in a few years?): unless he’s adopted the most insane income structure possible for the sheer hell of it, only a tiny proportion of his income [*] will be subject to UK income tax – he’s an investor/entrepreneur, not a salaryman, and his money comes from investment gains.

    This is the whole point about the 50% rate: the only people who’ll have to take it are those who get enormous salaries for taking risks with other people’s money whilst putting none of their own at risk (or kicking a ball well), not the entrepreneurs, the investors, the Bransons and the Dysons, or even the PE and hedge fund partners…

    [*] ie net change in wealth over a year. Accepted, this could be negative in aggregate for 2008 and 2009, but either way taxed income will be a negligible proportion of his net change in wealth.

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