Cover of MoneyWeek magazine issue no 433

Dodging Darling

1 May 2009 / Issue 433

Keep your money out of the Chancellor's clutches...PLUS:

  • The one oil services stock to buy now
  • How the 'Mad Butcher' made his millions
  • Bill Bonner: how to make a depression great


Stop tinkering with tax

If you’re planning to leave Britain for sunnier climes in the coming months, you’d better book now. City bigwigs have been making noises about abandoning London following the Budget’s imposition of a 50% income tax band, while Michael Caine is threatening to leave for the US. To judge by some reports, you’d think every plane in the UK was filling up with would-be tax exiles.

I’ve nothing against Mr Caine. But celebrities and business people should have learned by now to keep quiet on this topic. The hint that the rest of us are somehow over a barrel because a few entertainers and a handful of financiers might swan off elsewhere is guaranteed to bring out the worst in everyone. As Anthony Hilton put it in the Evening Standard this week, if they want to uproot their entire lifestyle for the sake of “a few thousand pounds” then good luck to them.

Of course, it’s ridiculous that the government is now taking even more of our money, particularly when it’s already spent so much on so little. But the real problem with Britain’s tax system isn’t the size of the tax take. It’s that the government just won’t stop fiddling with the system and adding new bits. One of our biggest problems right now is that it’s very hard to predict what’s going to happen to the economy over the next three months, let alone longer.

And by constantly changing the rules, the government just makes this uncertainty worse.

• Read the full editor’s letter here: Stop tinkering with tax