The Daily Telegraph - Saturday - Money
Quitting high-tax Britain? Here’s where to go
Telegraph Money’s Charlotte Gifford reveals the best countries to relocate to for a higher disposable income
Faced with rising taxes and falling living standards, many British workers may be wondering if it is time to pack up their bags and take their career in a more international direction.
Over the past year, the UK has recorded higher levels of inflation than any other economy in the G7, leaving workers experiencing a painful drop in their spending power. Record wage growth of 7.8pc should offer some consolidation.
However, the Government’s decision to freeze income tax bands – and cut the threshold at which the top 45pc rate kicks in – means any pay rise a worker receives is soon eaten up by soaring tax bills.
Labour has ruled out introducing a wealth tax or increasing the top rate of income tax if the party gets into power, Shadow Chancellor Rachel Reeves recently revealed. But in the unlikely event the party refrains from tinkering with the tax system, the Government’s tax freeze will still leave Britain on track for the highest tax burden since the Second World War.
Many workers have had enough. An estimated 557,000 Britons emigrated last year, according to the Office for National Statistics, and higher earners and entrepreneurs are among those jumping ship. This year, consultancy Henley & Partners forecasts that 3,200 millionaires will abandon the UK – double the number seen last year.
But working out where to relocate can be a challenge. Beyond salary, it is important to factor in the cost and quality of living, as well as how much tax you are likely to pay on income earned.
Here, we outline the best countries to move to for a higher disposable income.
£115,000-£123,000 Average monthly rent £1,872
Dubai of the United Arab Emirates (UAE) is an increasingly popular destination among British expats. Living there is expensive, and workers will need to pay for medical insurance, but with no income tax, they can keep more of what they earn.
Among the UAE’s biggest industries are oil and gas, real estate and hospitality. Bob Parker, of Holborn Assets, a financial advice firm, said the majority of expats are in Dubai but many are also in Abu Dhabi and the lesser known but fast- growing Emirate of Ras Al Khaimah, an hour’s drive from Dubai, has much cheaper housing.
HOW MUCH TAX WILL I PAY? There is no tax on income in the United Arab Emirates.
COST OF LIVING
The average apartment price per square foot is 1,294 dirhams (£ 282) according to property consultancy CBRE. Emirati nationals can access public healthcare for free, but British expats must pay.
MOVING THERE
To work and live in the UAE, you need a residence visa. A company can sponsor you but there are green visas for suitably skilled workers. Golden visas are available to investors who buy a property worth more than £431,485 and qualifying entrepreneurs.
Switzerland
Average yearly salary £60,000 Average monthly rent £1,400
Salaries in Switzerland are the highest in Europe and among the world’s highest, making it a top destination for migrants looking to bump up their pay cheque. Major companies based in Switzerland are Nestlé, Zurich Insurance Group and Glencore.
HOW MUCH TAX WILL I PAY? Working out your rate of income tax in Switzerland is complicated. The maximum overall rate of federal income tax is fairly low, at 11.5pc. However, each of the 26 cantons also has a separate law for cantonal taxes.
COST OF LIVING Switzerland is widely considered the
most expensive country in Europe. The median monthly rent for apartments in Switzerland is CHF 1,580 ( just over £ 1,400), according to the platform RealAdvisor. In Zurich it may be more common to spend more than CHF 2,000 (£1,800).
However, based on an average salary, this would still leave someone with a decent amount of disposable income. You should also expect to pay around
CHF 400 (£ 360) a month on health insurance, which is compulsory in Switzerland.
Depending on how many zones you travel within, an annual public transport pass in Zurich could cost between CHF 460 (£412) and CHF 2,226 (£2,000).
You will need a company to sponsor you in order to work in Switzerland. Generally, the State Secretariat for Migration ( SEM) will only give authorisation if you are a manager, specialist or otherwise skilled worker.
MOVING THERE
If you want to be self- employed in Switzerland, then you will need to show that your self-employment “will have a lasting positive effect on the Swiss labour market”.
To do this, you will need to submit a range of documents including a business plan, planned investment, projected turnover and profit.
Australia Average yearly salary £30,500 Average monthly rent (Sydney) £1,514)
Australia is expected to attract the highest number of millionaires from other countries this year, according to Henley & Partners.
Among those heading for Australia’s sandy beaches are British doctors. An anaesthetist working as a consultant for the NHS and earning £ 115,000 could double their salary in pounds by moving down under.
Australia has the world’s highest minimum wage, and set salary requirements for expats.
HOW MUCH TAX WILL I PAY?
If you reside in Australia for more than half of the year and you intend to stay, you will be considered a resident for tax purposes. Whereas the income tax rates for non- residents range from 32.5pc to 45pc, for residents the range is between 0pc and 45pc.
COST OF LIVING
Average rental costs in Sydney are £340 a week, according to data from Domain – making the city significantly more expensive than Australia’s other biggest cities, such as Melbourne and Brisbane, where average weekly rents are £250 and £270.
Living in either of these cities on an average salary of £30,500, you might expect about half of your monthly take-home pay to go on rent.
Australia’s healthcare system is a blend of public and private. Its public health system, known as Medicare provides essential hospital treatment, doctors appointments and medicine for free or for a reduced cost.
The UK has a Reciprocal Healthcare Agreement with Australia, so while in the country, Brits can access emergency healthcare for free. However, additional services such as dentistry, ophthalmology and physiotherapy are part of the private system.
Cost for health cover varies depending on your age, and the level of care you want to pay for. For just hospital treatment, a person can expect to pay £1,160 for those under 36, £1,390 for people between 36 to 59, and £1,580 for those aged 60 and over, according to financial comparison site Canstar.
For combined hospital and extras, it’s £1,550 for those under 36, £1,770 for those between 36 to 59, and £1,970 for those aged 60 and over.
You could choose to get just insurance for “extras” – at a cost of £450 for lower level of coverage, £537 for mid- level coverage and £ 595 for higher level of coverage – given that Medicare covers emergency treatment.
MOVING THERE
The Employer Nomination Scheme visa lets companies nominate workers to stay in Australia permanently. To be eligible, your job must be on the relevant list of eligible skilled occupations, which includes accountants, engineers and doctors.
“People that move to Australia generally need to fill some kind of critical skills shortage,” said Andrew Amoils, of residence and citizenship experts Henley & Partners. “Migrants to Australia also need to show they financially support themselves.”
You can also get a temporary visa for up to four years if you are filling a role for which the company is struggling to hire.