On the eve of the Chancellor’s Autumn statement, which is expected to see increases in various taxes, including a rise in capital gains tax, a recent report highlights the number of people fleeing the UK to avoid the ever-growing burden on high earners. This is in addition to the recent abolition of the non-dom tax status, which previously allowed the wealthy to protect overseas income from UK taxes.
A report in The Times this week says UK entrepreneurs are “leaving the UK in droves,” and there is an “exodus of the wealthy.”
Of course, innovative risk-takers drive extraordinary value creation in an economy. They create jobs and wealth while growing the economy. While the UK has long been the hottest spot for entrepreneurs in Europe, the write-up shares a concern that policy may diminish the benefits these individuals provide to the UK market.
Secretary of State for Business, Energy and Industrial Strategy and President of the Board of Trade, Peter Kyle, is quoted as expressing concern about the wealthy voting with their feet. Mentioned specifically is billionaire Lakshmi Mittal, who has left the UK. Mittal is a Labour supporter, having recently contributed £5 million to the party. But his wealth makes it simple for him to dodge the punitive nature of Labour’s tax policies, something not everyone can do.
The Office for National Statistics (ONS) recently reported that 257,000 British nationals left the UK in 2024. This is a far higher number than previous estimates.
Henley & Partners monitors the movement of the wealthy as they seek more welcoming jurisdictions. Out of the top ten wealthiest cities in the world, the top two are in the US – New York City and San Francisco, followed by Tokyo and Singapore. London is ranked 6th and declining. The millionaire growth metric shows a 12% decline over the 10-year period ending in 2024. The group shares that Britain’s economy has “struggled to create new wealth ever since the 2008 global financial crisis, with per capita wealth in the country down by ‒10% since its 2007 pre-crisis peak (in USD terms), according to our in-house wealth tracker (2007 to 2024). This compares particularly poorly to the USA, which saw its wealth per capita rise by +121% over the same period.”
While the UAE and the US led the world in receiving an influx of millionaires, the UK appears to be chasing them away. The UK leads the list of losers, according to Henley & Partners, beating out even China.
Henley believes that around 142,000 millionaires globally will choose to move during 2025. These migrations impact everyone as the multiplier effect is undeniable:
“Perhaps most importantly, high-net-worth individuals indirectly create thousands of well-paying jobs via their spending power, especially in high-value sectors such as luxury hotels, fine dining, luxury retail, high-end fashion, prime property, hi-tech, wealth management, and family offices.”
The Tax Foundation researches the impact of government revenue and tax policy. In the 2025 International Tax Competitiveness Index, the UK lands near the bottom in 32nd place. And this is before the anticipated tax increases, which may be announced tomorrow.
The 2024 European Tax Policy Scorecard showed the UK in a bit better place, ranking 17th, just ahead of comrades Germany and France.
The advocacy group Foreign Investors for Britain states that the UK’s foreign income and gains (FIG) and inheritance tax (IHT) regime is making the UK uncompetitive. They state that tax policy will not drive new revenue but rather cost revenue over time.
Competition Counts.
So why does the Labour government pursue new taxes on the affluent? It is because it is a popular rally cheer. Making other people pay for services you desire simplifies the decision for some. Calls for the wealthy to “pay their fair share” typically do not yield a specific percentage or amount. Another part of the challenge is that it will take years to measure the impact of higher taxes on the wealthy and entrepreneurs. But by the time the score is calculated, it may be too late, as people take their money and innovations elsewhere… it does not matter that empirical information is readily available in other countries. Just look to the US, where high-tax states are losing businesses in droves as they move to low-tax states like Florida and Texas.