Six out of 10 higher earners in the UK, or those living overseas who have financial links to Britain, are concerned about the adverse impact on their wealth of the November Budget, according to a new survey undertaken by deVere Group.
663 deVere clients who earn more than £75,000 from the UK, Europe, Asia, Africa, Latin America and Australasia took part in the survey.
When asked if they had worries that UK chancellor Rishi Sunak would be forced to raise taxes to help plug the UK government's funding gap, the majority (62%) said ‘yes', with just 17% responding ‘no'. 21% responded with didn't know.
Many are concerned about how their wealth might be impacted and are therefore now considering the available international financial planning options to safeguard," deVere CEO Nigel Green
Of the findings, deVere Group CEO and founder, Nigel Green, pictured below left, said: "The ‘whatever-it-takes' [UK] chancellor Rishi Sunak has been pushing hundreds of billions of pounds into the UK economy since March to shield it from the worst effects of the pandemic.
"But now attention is fixed upon the ballooning deficit, which some predict to be a staggering £350bn this year.
"Due to the magnitude of the funding black hole, it should be expected that taxes will rise and reliefs will be slashed. Potential targets for increases could include income tax for higher earners, capital gains tax, inheritance tax, and VAT.
"Also, there could be new wealth taxes introduced - something Boris Johnson was reportedly mulling even before the pandemic.
Green believes that it is "almost inevitable" that pension tax relief will also be a target. He points to highly unusual times economically and feels that taxes will need to be raised to fund the gap, with those who will be likely expected to carry the burden will be higher earners.
"As such, as the poll found, many are concerned about how their wealth might be impacted and are therefore now considering the available international financial planning options to safeguard," Green added. Though he says that raising taxes might not necessarily be the best way to manage the deficit.
"The chancellor should not try to tax his way out of the downturn - instead he must drive long-term sustainable economic growth policies," he added.
"In ever more competitive global trade, the UK needs to become increasingly tax competitive. This would fuel economic growth more effectively than tax rises and relief cuts."
The deVere CEO concludes that it is likely to be safer politically for the Chancellor to "tinker around with taxes" rather than make bold moves to boost the UK's growth and competitive edge.
"Therefore, we should expect to see an increasing number of higher earners in the UK, or those living overseas who have financial links to Britain, to explore international options," he said.