UK Tax Rise Could Increase Immigration to Singapore

The 25% tax rise proposed for upper income UK tax payers will result in a tax rate differential of 36% between Singapore and UK thereby creating enormous incentive for UK residents to consider immigration to Singapore.

Singapore (PRWEB) June 25, 2009 -- GuideMeSingapore.com has released an analysis of the recently proposed tax changes in UK and its potential impact on UK residents who are considering immigration to Singapore.

As the UK economy faces its worst years since the Second World War, the UK chancellor - Alistair Darling - unveiled his 2010 budget in April. The budget includes a 25% tax rise on those earning above £150,000. The tax rate for these payers will rise to 50% from its current level of 40% starting in 2010. As reported by BBC (http://news.bbc.co.uk/2/hi/uk_news/politics/8011321.stm), the chancellor also scrapped tax relief on top earners' pensions.

These tax increases are in addition to the country's 17.5 percent VAT on virtually everything a resident buys - except petrol, alcohol, cigarettes and other items which are covered by even higher "sin taxes". Furthermore, the tax on new car purchases which was previously calculated at 35 percent for only the first £80k will now be computed at 35 percent on the complete purchase price.

GuideMeSingapore.com's analysis shows that the change moves Britain to near the top of the world league for taxes on the affluent and predicts that the rise will cause damage to the UK economy. As reported by the Times (http://business.timesonline.co.uk/tol/business/economics/budget/article6150968.ece), many business leaders believe that the Government is taking a big risk. Hugh Osmond, the pubs and pizza entrepreneur, said it was very likely that he would move his Sun Capital investment vehicle offshore, as a result of Labour's tax changes: "I don't feel happy about being driven out of the country that I love, but there comes a point when thousands of pounds a week becomes compelling." Luke Johnson, the entrepreneur and chairman of Channel 4, said that the changes sent an awful signal to wealth creators: "The world is dramatically more mobile than it used to be and dramatically more international. The possibility of people migrating out of Britain because tax rates are lower elsewhere is a real risk." It is not just the country's financial services sector that could suffer. People in the entertainment industry warned that it could trigger the sort of exodus of talent seen in the 1970s after Dennis Healey raised the top tax rate to 83 per cent in his first Budget as Chancellor in 1974.

Many other countries have been reducing their top rates recently; according to the accountancy firm Ernst & Young the recent rise will move Britain from nineteenth to seventh in the league of highest marginal tax rates. It is not just those earning more than £150,000 who will face high rates. Because of the removal of personal allowances, those earning £100,000 will pay 60% in tax for every extra pound that they make.

Andrew Chen, Head of Public Relations at GuideMeSingapore.com contrasted the UK situation with that in Singapore by pointing out that Singapore income tax (http://www.guidemesingapore.com/corporate-taxation/c321-corporate-taxation-system-overview.htm) rates have been steadily going in the opposite direction in recent years. The corporate tax rate has fallen from 26% in 2000 to 17% today. Additional tax exemptions are available for small and mid sized companies with the result that a typical Singapore company with £500,000 in taxable income will pay approximately £75,000 (15%) in taxes. The individual tax rates are similarly very attractive; a person with £200,000 taxable income will pay approximately £31,000 (15.5%) in taxes. Furthermore, there is no double taxation at the corporate and personal level - post tax company profits can be distributed to the company owner without any further taxation at the individual level. To top it all, Singapore does not have any capital gains tax.

Historical links to the United Kingdom, the strong influence of British culture, and the widespread use of English make Singapore an attractive immigration option for those UK residents who are seeking relief from high UK taxes. GuideMeSingapore.com provides detailed and up-to-date information on Singapore company registration (http://www.guidemesingapore.com/company-setup/c312-singapore-company-registration-details.htm) and immigration (http://www.guidemesingapore.com/singapore-immigration-toc) processes and can help individuals and businesses with their relocation to Singapore.

About GuideMeSingapore.com

GuideMeSingapore.com is a Singapore-focused portal that provides comprehensive, accurate and up-to-date information to global business professionals and entrepreneurs about starting a business, relocating, and living in Singapore. The site is a unit of Janus Corporate Solutions Pte. Ltd, a leading professional services firm that specializes in company incorporation, work permits, taxation, and related services. For more information, visit their Singapore Company (http://www.guidemesingapore.com/) website.

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