James Moore: Osborne's Budget bonanza will not bring tax exiles sailing back to Britain


Outlook Business has reasons to be rather pleased about the emergency Budget. It was given a small handful of sweeties while everyone else was given nine-inch nails (rusty ones, at that). No surprise, then, that the Institute of Directors rushed out figures yesterday showing an overwhelming endorsement from the company directors that make up its membership (well, just over 600 or so of them, anyway).

Apparently, 83 per cent felt that the Budget would have a positive impact on the economy, and 90 per cent thought it would have a positive impact in reducing the government deficit. Some 82 per cent were more positive about the long-term economic outlook and 61 per cent were more positive about the short-term. Perhaps they just didn't notice the VAT increase and the cuts which might usually be expected to feed through to customers' wallets.

Miles Templeman, the IoD's director-general, duly gushed about the "emphatic endorsement" of George Osborne's work. It has been years since the IoD's Thatcherite heyday when its views counted for something. But now he will no doubt be dusting down his best suit for that invitation to a reception at No 11 Downing Street.

With Labour's national insurance rise gone, corporation tax coming down and the highly contentious way foreign profits are taxed under review, the Tory party's coffers ought to be positively bursting thanks to a nice injection of corporate largesse.

Who knows, perhaps the Liberal Democrats might get a banana or two. Perhaps not. They're probably the reason why that irksome 50 per cent top rate of tax remains on the statute book. Democracy, what are you going to do with it?

But while business groups were crowing yesterday (with the possible exception of banks, but see below) the proof of the pudding will very much be in the eating.

The past few years have seen a chicken-run of companies departing Britain for offshore boltholes. The biggest beneficiary by far has been Dublin, but Jersey and Guernsey have both made themselves home to a number of exiles, and Switzerland has not proved unattractive.

But now the voice of business has been heard in Britain. So will there be a quid pro quo? Will these measures prevent future departures? And, having loudly complained about Labour's taxes, will the likes of WPP's chief executive, Sir Martin Sorrell, be considering a return to the UK? He has hinted as much but the problem with hints is that, as politicians are only too well aware, they come with all sorts of caveats attached.

It is worth noting that while businesses have done remarkably well out of a bruising Budget, the directors that run them have been rather less fortunate. That 50 per cent rate is likely to be with us for some time to come. And capital gains tax is going up, which will hit one of their favourite tax dodges: finding clever accountants to classify income as capital gains.

So while Mr Osborne might hope for some payback for the fairy dust he has been sprinkling around, he is likely to be disappointed. Because when directors come to review questions of domicile, they are just as likely to consider their personal circumstances as they are those of companies they run. And that means that most of the exiles will probably stay put.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Admin Assistant

£12000 - £15000 per annum: Recruitment Genius: An expanding Insurance Brokerag...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders