Income tax rise could cause a fresh wave of Brits to move abroad
Income tax rises in the upcoming Budget would force an increased number of Brits to consider a move abroad, a leading international removal company has warned, adding that hiking the tax would lead to “a great Q4 for companies like mine.”
Speculation surrounding a rise in income tax in Chancellor Rachel Reeves’ November Budget has gathered speed in recent weeks, with discussions surrounding a tax rise reportedly underway.
But John Mason International has warned that an increase to income tax would ultimately “backfire” and result in an influx of people leaving the country in order to escape the UK economy “doomloop”.
Rumoured changes include a 2p rise in income tax offset by a cut in National Insurance, despite repeated promises from the government that it will not to break its manifesto pledge and raise income tax.
Growing appetite to leave
Simon Hood, director of John Mason International, said: “The economic conditions of the Chancellor’s current dilemma aren’t envied…but this move would be ultimately counter productive.”
The Treasury have found themselves increasingly limited on capital raising options, due to the “iron clad” commitment to fiscal rules, coupled with previous failed attempts to fill the estimated £20bn fiscal black hole.
This included a U-turn on cuts to welfare spending and removing the winter fuel payment from pensioners.
However, a number of businesses and think tanks have called on Reeves’ to break the commitment in order to generate higher levels of revenue.
Between 2020 and 2024, the international removal company has seen an average 30 per cent year on year increase in exports, with customers fleeing for the UAE, Qatar and United States in particular, as they are typically viewed by Brits as low-tax destinations.
In particular, the company has reported a wave of young people looking to leave at an accelerated rate.
David Ozard, general manager of John Mason International, said: “The demographic of our clientele has shifted.
“A post-Covid mover is more likely to be an individual under 35…this is something we’ve always catered to but never at the rate we’re seeing in 2025.”
Among reasons cited for leaving, young people credited the inability to get on the housing ladder, due to the increase in both house and rent prices, and hiked taxation.
Hood said: “The only thing raising income tax would achieve is a great Q4 for relocation companies like mine.
Measures like this are reinforcing the perception that the UK isn’t a hospitable place for growth, and makes Brits start to believe that the grass is in fact greener abroad.”
The tax trap
While younger Brits are feeling pressure to escape, pensioners are also suffering from the income tax trap, despite not considering themselves wealthy.
According to a freedom of information request from HMRC by Interactive Investor, 77,000 pensioners found themselves paying 60 per cent income tax last year, up from just 34,000 three years ago.
It was also a 13 per cent jump from the 2023/24 financial year where 68,000 working pensioners were also slapped with a large tax bill.