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Are we set to see a future brain drain from the UK?

The introduction of the new 45% income tax band which will come into force in 2011 has put many of the higher earners in the UK on red alert. A number of reports of late have highlighted the fact that when you take into account VAT, income tax, national insurance and other unavoidable taxes in the UK the top earners in the UK are paying tax in the region of 60% on their earnings.

There are serious concerns that we will see a substantial brain drain from the UK over the next two or three years with more than enough overseas countries willing to accommodate the high earners on better rates. Not only will we see income tax receipts reduce for the Treasury but the potential for UK business as a whole will also be dented as the more entrepreneurial business minds move elsewhere.

This does not seem to have been an issue which the government has considered over the last few days although to be fair the UK economy is by far and away the most important project at the moment. However, once the dust settles and the UK economy starts to rise there is every chance that more and more companies and individuals could be looking overseas where the tax situation is not as aggressive.

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