Tax Loss from Millionaires Leaving the UK Last Year Equivalent to Over Half a Million Average Taxpayers
According to New World Wealth, 10,800 millionaires left the UK in 2024;
New analysis by the Adam Smith Institute (ASI) shows that, in order to make up for the shortfall in income tax, replacing just one millionaire would require at least 49 average taxpayers;
This means that the Exchequer is already losing the equivalent income tax take of over 528,000 taxpayers;
This is approximately the size of the population of Manchester;
Alongside being huge tax contributors to the UK, many millionaires are entrepreneurs, and job and wealth creators. If the government continues to drive them away, this could severely impact the UK’s public services and economy.
According to new analysis from the Adam Smith Institute (ASI), the lost annual income tax revenue from millionaires leaving the UK is equivalent to the annual income tax take of over half a million average taxpayers.
Figures from New World Wealth have shown that 10,800 liquid millionaires, meaning they hold over 1 million dollars in liquid assets, left the UK in 2024. If, as is highly likely, all these millionaires were all earning over one million pounds a year, they would have been paying at least £393,957 in income tax, which equates to the same income tax take as 49 average taxpayers. This means the Exchequer is now facing a shortfall in income tax revenue which is the equivalent of the income tax taken from over 528,000 average taxpayers.
The actual figure is likely to be higher, if other taxes such as corporation tax, VAT and national insurance were included.
This will have a significant impact on our economy. The top 1% of taxpayers currently pay 29.1% of the UK’s income tax, which is the highest source of tax revenue for the Exchequer. The increasing loss of revenue will put added pressure on public services, and the remaining taxpayers and businesses who are already paying record rates of tax to fund them.
These millionaires are leaving due to a number of factors, including the upcoming abolition of the non-dom tax regime, high rates of tax on businesses and individuals, and the UK’s increasingly hostile attitude towards wealth creation.
Andrew Griffith, Member of Parliament for Arundel and South Downs and Shadow Secretary of State for Business and Trade, said:
"Our entrepreneurs and businesses are fleeing this socialist government’s tax raid in droves.
This research shows that Rachel’s Marxist maths has put the economy in real danger of drowning in Labour’s tepid bath of decline. Unless she changes course, every taxpayer will be getting soaked as a result.”
Maxwell Marlow, Director of Research at the Adam Smith Institute, said:
“The rate at which millionaires are leaving the country is alarming. This will have serious implications for our wider economy and the public services which their taxes have been funding. And if the Treasury is losing money from these departing individuals, they may decide that they need to tax the average taxpayer even more than they already are.
Our analysis has only measured the minimum amount of income these millionaires were likely to be paying- and didn’t take into account the other taxes that they are paying into the Exchequer at very high rates. So the fiscal hole caused by these high net worth individuals leaving is likely to be much larger.
Our findings underline the urgent need to attract more millionaires to the UK, for example by introducing an italian-style flat rate fee or cutting anti-business taxes.'“
-ENDS-
We took the top 1% of income tax payers, supposing they make £1,000,000 in income. This means that these individuals would pay at least £393,957 in income tax. As the average income tax bill for the average taxpayer is £8,048.13, this means that you would require 48.95 tax payers to make up for a single income millionaire departure, we find that 528,662 households are required to replace the lost income tax revenue.
Given the top 0.25% of income taxpayers earn above a gross £1,000,000 in income, we are confident that these individuals will also be liquid millionaires. We apply the average tax rate for top 1% taxpayers, and thus liquid millionaires; consistent with the observed rate for million-£ earners in Advani, Hughson, and Summers (2023).
Notes to editors:
This analysis was undertaken by Mitchell Palmer, Research Associate at the Adam Smith Institute Maxwell Marlow is Director of Research at the Adam Smith Institute. Mitchell Palmer is a Research Associate at the Adam Smith Institute.
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