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
ebooks
ebooksAn introduction to the ground rules of British democracy
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: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'