The top 100 earners in the UK paid a significant amount of £3.9 billion in income and capital gains tax in the year 2022/23, which averages out to £39 million each. This data was revealed through a Freedom of Information Request made by Wealth Club to HMRC in September 2024. Additionally, the top 1,000 taxpayers paid an average of £10.4 million each, contributing more than 4% of HMRC’s total tax revenue. The top 10,000 taxpayers paid an average of £2.5 million each, collectively covering nearly a tenth of HMRC’s annual tax revenue.
Founder of Wealth Club, Alex Davies, highlighted the importance of tax collection without causing economic or political damage. He emphasized the reliance of the tax system on a small number of individuals and the potential consequences if these high earners were to leave the country. It is estimated that 9,500 millionaires may leave the UK in the current year, leading to a significant loss in tax revenue.
The departure of top taxpayers could result in billions of pounds less in receipts for HMRC, creating gaps in the country’s finances and impacting the economy. This situation is exacerbated by the existing perception of the UK as an unattractive place for wealthy investors due to high levels of taxation and lack of support for wealth creators.
As the Chancellor prepares for the Autumn Budget, it is crucial to consider the implications of tax policies on top earners and the potential consequences of their migration. Maintaining a balance that encourages investment and entrepreneurship while ensuring fair taxation is essential to prevent the loss of valuable contributors to the economy.
In conclusion, policymakers must approach tax policy with caution to prevent the flight of high earners and preserve the country’s financial stability. Finding the right balance between tax revenue and economic growth is key to retaining top taxpayers and fostering a supportive environment for wealth creation in the UK.