Rich plot exodus from Britain to escape Labour’s wealth tax raids which risk hitting investment while drivers brace for fuel duty hikes – and Rachel Reeves orders Whitehall to draw up massive public spending cuts

Millionaires are looking to flee the UK in their droves to escape Labour’s tax raids – with a record number of wealthy Britons tipped to leave the country this year.

Advisers to the UK’s richest households told yesterday how phones are ringing off the hook as their clients rush for the exit, as Chancellor Rachel Reeves plans to hike levies in its autumn Budget on October 30.

It follows Keir Starmer‘s speech this week in which he painted a woeful picture of the state of the country’s economy, referring to financial ‘black holes’, as he braced the UK for a difficult Autumn budget. 

Finance experts have told high-net-worth families are packing their bags in a bid to protect their hard-earned assets – and some have already made the move.

One tax adviser, who asked to remain anonymous, said: ‘I almost feel like I should contribute to the Labour Party because of what they’ve done for our business.’ 

Rachel Reeves, seen at the Treasury on July 8, is preparing for tax hikes in her October Budget

Keir Starmer gave a gloomy speech in the garden of 10 Downing Street on August 27 

The fears come as drivers are also bracing themselves for fuel duty hikes, while the Chancellor has also ordered hefty savings targets for government departments.  

Sources told The Times the Department of Health has been asked to find savings worth around £1.3billion in time for the October budget, while officials at the Department for Education are also looking at how to save around £1billion. 

However, in Berlin yesterday, the Prime Minister insisted that, despite his doom-laden speech this week, he is optimistic.

‘This is actually a project of hope,’ he said, despite warning that the upcoming autumn budget will be ‘painful’. ‘But it’s got to start with the hard yards of doing the difficult stuff, of clearing out the rot first.’

But there are mounting fears that Labour is planning a slew of tax increases on pensions, property and investments.

‘Those with the widest shoulders should bear the heaviest burden,’ the PM said in his address from the Downing Street rose garden, a signal that wealthier homes would face the brunt of incoming tax hikes.

Advertising mogul Martin Sorrel, the founder of agency WPP, said he has friends who are fleeing the UK. The exodus ‘started with non-dom changes’ and is ‘inevitable given coming tax hikes’, Mr Sorrell, who now runs S4 Capital, said.

Charlie Mullins, the founder of Pimlico Plumbers, who has already left the UK for Spain, said it is ‘a typical socialist money-grab’.

‘But, like most such policies, it won’t raise what they think, but it will kill off investment.’

He added: ‘People will pay over the odds to live in their native country, but even the most loyal Brit will abandon ship if the environment becomes too hostile.’

It has also been reported that Rachel Reeves could use the Autumn Budget to bring capital gains tax in line with income tax rates, which would hike the upper band to 45 per cent.

Charlie Mullins, the founder of Pimlico Plumbers, who has already left the UK for Spain, described Labour’s tax plans as ‘a typical socialist money-grab’

The gain made is taxed, rather than the amount of money received, and it must be paid on a series of ‘chargeable assets’. 

These are currently defined as most personal possessions worth £6,000 or more, apart from a car,; property that’s not your main home; your main home if you’ve let it out and any shares that are not in an ISA or PEP.

Pensions are also expected to be a priority area for Labour in the budget, with rumours over a raid on pension tax relief that high earners receive on contributions. 

And the Government is also considering raising inheritance tax, currently 40 per cent on estates worth in excess of £325,000. 

Current rules mean there is normally no inheritance tax to pay if either the value of your estate is below the £325,000 threshold; or you leave everything above this mark to your spouse, civil partner, a charity or a community amateur sports club.

The £325,000 threshold has been frozen since 2009 – and the standard tax rate is 40 per cent, which is only charged on the part of the estate above the threshold.

Another potential target is Individual Savings Accounts (ISAs) which allow people to save up to £20,000 a year in shares or cash, which are tax-free for gains and withdrawals.

While the annual amount you can save is not expected to be varied, there are suggestions that the Government could impose a lifetime cap.

The Resolution Foundation think tank previously said this could be set at £100,000, suggesting the current setup mainly benefits those with high disposable income. 

The UK is expected to see an unprecedented net loss of 9,500 millionaires in 2024, according to consultants Henley & Partners. Tax and citizenship advisers to some of the UK’s wealthiest families have seen a sharp increase in enquiries about moving abroad, to lower tax regimes, since Labour won the election.

Chancellor of the Exchequer Rachel Reeves, seen during her visit to the National Manufacturing Institute Scotland on August 28, has called for Whitehall spending cuts

Favourite destinations include Italy, Dubai and Ireland. Peter Ferrigno, director of tax services at citizenship advisory firm Henley and Partners, said his firm has gone from receiving very few queries before the election to several-a-week since.

‘Judging by how busy we are, it is a concern for absolutely everyone,’ Mr Ferrigno said. ‘It is the difference between having enough money to retire or not having enough money to retire. [Clients feel it is] forcing their hand’.

He added that an increase in Capital Gains Tax would be ‘the last straw… people who were prepared to pay 20 per cent are now considering leaving.’ It is ‘desperately, desperately sad’, he said.

There are fears that Labour could bring capital gains tax rates – the levy on the profit made when someone sells an asset – in line with income tax rates, pushing the upper band up to 45 per cent – up from 28 per cent.

David Lesperance, the founder of tax and immigration advisory Lesperance and Partners, said enquiries about leaving the country doubled when it became clear that Labour would win the election in July.

‘Ever since Rachel Reeves started talking about a ‘fiscal black hole’, my wealthy UK non-dom and domiciled clients have been looking anxiously at the exit door,’ he said.

‘Sir Keir’s warnings about a ‘painful budget’ just reaffirms their concerns that major IHT and capital gains hits will be coming soon.’

Mr Lesperance added: ‘The UK’s richest families are getting out while the getting is good.

‘You don’t wait until the fireman confirms your house is on fire before fleeing. Similarly, UK high net wealth individuals are not waiting for the Autumn budget to confirm that their fiscal house is about to be engulfed.’

Jason Porter, of Blevins Franks, a financial advice firm specialising in cross-border wealth management, said the fear was now ‘palpable’ among millionaires, with growing numbers planning to relocate to shield their pension, property and investment assets.

Prime Minister Sir Keir Starmer, pictured visiting the Siemens Energy plant owned by German industrial conglomerate Siemens in Berlin on August 28, has warned of a ‘painful’ Budget

Mr Porter said he had received an influx of calls from wealthy families planning to relocate outside of the UK ahead of the autumn Budget. He said: ‘Families with large pensions or investments in shares are feeling under threat and interest in moving abroad is ramping up every month.

‘There were certainly a lot of people coming to us with big concerns over changes to capital gains tax, pension rules and inheritance tax, who are worried about what their situation could soon be like if they stayed.

‘In most cases they were people in the middle bracket of wealth, with a couple of million pounds, for whom it can take time to move their assets.’

Former Tory business secretary Jacob Rees-Mogg said: ‘Capital taxes damage economic growth and will force wealth investors to look elsewhere.

‘They are no more than an illustration of socialist envy.’

With significant fuel duty hikes also on the horizon, the RAC forecast Ms Reeves has ‘no option but to put fuel duty back up to 58p a litre in October’s Budget’. 

A 5p per litre cut in fuel duty was introduced by the Conservative government in March 2022 while, before this, the levy had been frozen at 57.95p since March 2011.

Meanwhile, The Times reported Ms Reeves has warned that ‘public spending is not sustainable’ and is setting out detailed savings targets that ‘really scrape the bone’.

Several departments have reportedly been told to find more than £1billion in savings each, with others ordered to find hundreds of millions of pounds. 

According to the Financial Times, over half of Britons disapprove of the new Labour government.

A survey revealed the share of UK adults who have a negative view of Sir Keir Starmer’s government has surged by about 20 percentage points in a month to 51 per cent, YouGov said, with the proportion of people who approve of it falling from 29 per cent to 23 per cent.

Separately Ipsos polling for the Financial Times showed three-quarters of the UK public think chancellor Rachel Reeves will increase the taxes they pay personally, up from just over half in May.