The current tax environment in the UK could mean more clients consider moving abroad, according to Tony Wickenden, managing director at Technical Connection.
Speaking at the SJP Chartered Symposium today (January 25), Wickenden said while the majority of clients will look to stay in the UK, some clients may be interested in finding out what it would be like from a financial perspective to emigrate.
He said: “We have an obligation to try and help our clients and give answers to their questions about whether the grass is greener on the other side.”
Wickenden pointed out while there were many other reasons people may want to move abroad, he said tax was ‘definitely’ a contributor.
He said: “Countries want to encourage people to go there by creating an attractive tax system and it definitely does have an influence.”
The ‘frozen tax world’ we currently find ourselves in is causing more people to pay tax, which Wickenden said is generally making more people seek advice on saving.
You don’t want to be the adviser that says I don’t know.Tony Wickenden, Technical ConnectionChancellor Jeremy Hunt announced in the Autumn Statement he would cut NI taxes by two pence, which came into effect January 6.
While this aimed to put more money in Brits’ pockets, for some the cut in NI was offset by frozen income tax thresholds which pull many into higher tax brackets.
IHT nil rate bands are also frozen, dragging more people into higher bands with a recent YouGov survey finding that IHT is the most disliked tax.
Cutting or abolishing IHT is a topic that many people expected to be touched upon in the Autumn Statement but it was left alone, with many now looking to the Spring Budget.
With a general election on the horizon, Wickenden pointed out a change in government might be what is driving interest in people looking at what is on offer abroad.
He said: “I know anecdotally it has piqued some interest from people due to them thinking that it will not be too great here in the UK if we get a Labour government.”
In his New Years speech Keir Starmer said he would prioritise economic growth before tax cuts.
When asked if he would be scrap or reduce IHT, Starmer replied he was "fundamentally opposed" to this idea.
He said: “I would not be doing what the Conservatives are floating.
“Further tax breaks for those who are the best off with nothing on offer for working class people is not a good idea.”
Many countries like Portugal, Spain and Italy introduced flat rate tax for a certain amount of years for people who choose to relocate there.
Wickenden said: “Tax is used as a way to make countries look more attractive.”
He made clear while there was only a marginal interest from clients to find out what life could be like outside of the UK, the current economic climate mean advisers need to be equipped to be able to answer any concerns.
He added: “You don’t want to be the adviser that says I don’t know.”
alina.khan@ft.com
