Research for Lloyds TSB International has found 15% of Britain's 5.5 million expatriates have cancelled plans to return home
Diageo chief Paul Walsh has attacked the 50% income tax rate on high earners, saying it will do "long-term damage" to Britain's ability to compete and may force him to relocate the world's largest spirits maker overseas.
His remarks came as a study published today showed 15% of Britain's 5.5 million expatriates have cancelled plans to return in the last year, with 69% planning to stay abroad indefinitely, a 13% increase on a year ago.
Walsh, who has run Diageo for 11 years, told a Sunday newspaper he was no longer creating senior jobs in Britain because of the top rate of tax, which affects those earning over �150,000 a year. "I believe the 50% tax rate will lead to the long-term damage to this nation's competitive edge. We will not be able to base people here and increasingly we will have to look at locating our quality people in lower tax jurisdictions."
The owner of Guinness, Johnnie Walker, Smirnoff and Baileys operates from a head office in the London borough of Brent. Asked if the income tax rate would force him to consider moving abroad, Walsh said: "It may do. At the moment, if I am going to create jobs, I am not going to create them in the UK because it's a high-cost environment. If I employ staff in Singapore with a 10% tax rate, I don't have to pay them as much for them to feel good and to go home with more money."
Walsh believes a trickle of high earners have begun to leave Britain and many more are deciding against moving here because of the tax rate. "There are more people moving offshore than the press or the government recognise."
His view is reflected in research commissioned by Lloyds TSB International which showed 825,000 Britons living overseas have postponed their homecoming because they believe they are financially better off living abroad, the cost of living is lower and the quality of life higher. About 64% of expats interviewed said they were financially better off abroad, as opposed to 12% who said they were wealthier in Britain.
"From economic woes to August's riots, the UK has faced a catalogue of bad news in recent months," said Lloyds expat banking managing director Tony Wilcox. "Coupled with expats' view that the quality of life is higher and they are financially better-off abroad, it's not surprising that so many have cancelled their plans to return to the UK."
Source: http://www.guardian.co.uk/business/2011/oct/24/diageo-senior-jobs-tax-rate
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