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If Labour wins where do I emigrate to?

Tom Winnifrith
Friday 2 June 2017

If you are an entrepreneur whose business makes a profit then having risked your capital and sweated blood to create such a profit is it not right that you get to spend those profits? Of course it is. 70% of businesses starting today will go bust within the next five years. That is the risk so you need a reward. If there is no reward why would anyone start a business? Reduce the reward fewer folks will take the risk. It's so simple even Jeremy Corbyn should get it. But he does not.

That and the mobility of business is something Labour just does not understand. Right now £100 of profit is taxed at 19% and if the £81 is paid out as a dividend it is taxed at another 25% so for every £100 of profit the taxman grabs £39.25 and the risk taker gets £60.75. That is more tax efficient than taking the £100 out as a bonus and facing a PAYE bill on it.

If Jeremy Corbyn enters No 10 he wil hike the corporation tax rate to 26%. I bet he will increase taxes on dividends too but let's be generous and say that he resists the urge to "soak the rich." Even so the taxman then grabs a total of £44.50 leaving the entrepreneur with just £55.50.

What Corbyn and his shadow chancellor, the self proclaimed Marxist, "Semtex" John McDonnell fail to grasp is that many businesses can move. In the 1970s under high tax Labour lots of folks did just that but today it is far easier to up sticks. I am in Greece for long periods and it makes no difference at all to the way I do business. Relocating to a Greek Island with a population of less than 3,100 would see me facing a Corporation tax bill of 19% and a tax on dividends of 15%. So I get to keep £68.85 while the Greek taxman gets £31.15 and Jeremy Corbyn's Britain gets nothing at all.

But there is an option far closer to home - Ireland where corporation tax is just 12.5% and dividends are taxed at 20%. So head to "The Old Country" and suddenly I am keeping £70, the Irish taxman gets £30 and once again Jeremy Corbyn's Britain gets nothing at all.

If you have real money you can head off to Monaco or Andorra and pay sod all tax but you don't need real money or to be making vast profits to consider a move to Ireland. That is what folks like Corbyn and his Guardian reading supporters just do not understand. Since none of them have ever risked a cent to start their own business they fail to grasp that it is not only about the money for we entrepreneurs , it is about the idea of risk reward and anger with the idea that the State just views as as a source of cash that can be tapped at will. We entrepreneurs are not fat cats to be abused , we are the folk that take risks to create jobs and generate taxes for the Government to piss away.

If Labour wins the General Election on June 8th, one reason why its sums just do not add up is that material numbers of high earners and mobile businesses will simply quit Britain and it is those folks who currently the largest contributors to the exchequer. We are the golden geese who Jeremy Corbyn threatens to put to flight.

Ireland or a Greek island? It is a hard call. The Mrs - being a card carrying member of the Labour party - is rather looking forward to bumper pay rises for her and her fellow public sector workers in Corbyn's Britain.

But I am not sure she has worked out how much better off we would be in Ireland or on that Greek Island than in a Labour run Britain. And in the end when, like all socialist Governments, Team Corbyn runs out of other people's money they will be forced by the IMF - as was Healey in 1976 - to take an axe to a bloated public sector wage bill. At that point, the Mrs might just thank me for that dividend stuffed bolt hole I established in Co Donegal or somewhere in the Aegean.

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About Tom Winnifrith
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Tom Winnifrith is the editor of TomWinnifrith.com. When he is not harvesting olives in Greece, he is (planning to) raise goats in Wales.
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