As Mittal shifts base, UK minister says tax hikes are driving wealthy out

Britain's Business and Trade Secretary Peter Kyle admitted that it is Labour's taxation regime that is causing the exodus of the super-rich

As Indian-origin steel tycoon Lakshmi N Mittal prepares to leave the United Kingdom (UK), Britain’s Business and Trade Secretary Peter Kyle on Monday acknowledged concerns that wealthy individuals are exiting the country partly due to tax increases under Keir Starmer’s Labour government.

 

In an interview with Sky News, Kyle was asked if he admits that it is Labour's taxation regime that is causing the exodus of the super-rich. "I do. I'm not going to duck the fact that we have put up taxes, and we've closed some of the loopholes for non-doms," he said.

 

Kyle’s remarks come as UK Chancellor of the Exchequer Rachel Reeves is expected to unveil a package of about 30 billion pounds in tax increases and spending curbs to steady Britain’s public finances. This follows her first budget last year, which sharply raised business taxes and scrapped the non-dom regime, measures that have accelerated an outflow of wealthy residents.

 

"Some people are going to leave because they are here because of how the old non-dom system worked," Kyle said.

 

The non-dom regime was a policy that allowed foreign nationals living in the UK to claim non-domiciled status for tax purposes, enabling them to avoid higher UK tax rates. The policy has been scrapped.

 

People feel the need to leave the UK to succeed: Kyle

On being asked about Mittal’s decision to shift his tax residency to Switzerland, Kyle said he is concerned "whenever somebody feels they have to leave the UK in order to succeed".

 

"We've gone through a period where thousands of doctors have left the country. What I don't want to do as a country is focus just on the billionaires, because there are other people who have needed to leave," he added.

 

Kyle further pointed out that entrepreneurs, particularly early-stage founders, have been heading to the United States “in their droves” due to a lack of adequate funding at home. He said the government is working to reverse this trend by recapitalising financial markets to ensure businesses can grow in the UK rather than relocating overseas.

 

Mittal's exit

Indian-origin steel magnate Mittal, long based in Britain and a fixture on the UK’s richest billionaires list, has chosen to leave the country as the Labour government’s anticipated tax overhaul for the super-rich draws closer, according to a report by The Sunday Times.

 

Rajasthan-born Mittal has now taken up tax residency in Switzerland and is expected to spend much of his time in Dubai. With an estimated net worth of 15.4 billion pounds, he joins a growing list of business leaders exiting the UK due to tax concerns.

 

(With inputs from agencies)