A growing number of British professionals and entrepreneurs are preparing to leave the UK to escape what has been branded Labour’s “stealth tax bombshell”, according to independent financial advisory firm deVere Group.
The warning comes as new figures suggest nearly two million workers will be dragged into higher tax brackets by the end of the decade, due to the continued freeze on income tax thresholds. But deVere says those projections could fall short — because many of those affected are already plotting their exit.
“There’s a major assumption at play here — that people will simply accept being pushed into higher brackets without taking action,” said Nigel Green, deVere’s CEO. “That’s not what we’re seeing. On the contrary, the appetite to move abroad and legally restructure finances has soared since Reeves’ first Budget and the momentum is not slowing.”
The Office for Budget Responsibility (OBR) has estimated that fiscal drag — where inflationary wage growth pulls more people into higher tax bands — will generate £8.9 billion for the Treasury. But Green suggests that forecast overlooks a critical factor: mobility.
“Relocation is no longer the preserve of the ultra-wealthy. Remote working, global hiring and dual citizenship have significantly lowered the barriers,” he said. “We’re now seeing more middle-income professionals considering their options abroad, particularly in higher cost regions like the south-east.”
According to internal deVere data, client relocation consultations have risen by 36% in the south-east since January, with Italy, Portugal, Switzerland and Dubai among the most popular destinations. These jurisdictions offer favourable regimes, including flat tax options or exemptions on foreign income.
“A skilled Londoner earning 50% above the median salary now faces £2,700 more in annual income tax than two years ago — a rise of nearly 25%,” Green said. “For families already squeezed by mortgage and childcare costs, it’s proving a tipping point.”
Green argues that the government is misjudging the resilience of its tax base. “That £8.9 billion figure depends on a static population and passive taxpayers. Neither of those assumptions holds true,” he said.
“People, entrepreneurs, capital — they all move. Tax policy doesn’t operate in a vacuum.”
The warning follows growing political pressure over the use of frozen thresholds as a way to raise revenue without increasing headline tax rates. Labour’s continuation of this policy, introduced by the Conservatives, has led to accusations of a stealth tax raid on working families.
“Governments betting on bracket creep as a stealthy source of cash may need to rethink the maths,” Green added. “The real story isn’t just how much more tax Brits will be forced to pay — it’s how many will quietly leave before they do. That £8.9bn figure? It’s already shrinking.”
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UK stealth tax hike risks exodus of high earners, deVere warns