A top City economist has warned of a potential fiscal shock in the coming months as a wave of billionaires leave Britain, potentially destabilizing public finances. Simon French, chief economist at Panmure Liberum and former Cabinet Office economist, cautioned that the tax revenue figures in early 2027 could be unexpectedly low due to the recent departures of high-net-worth individuals.
"Next February could be quite the shock for fiscal headroom if the big self-assessment returns (for January) come in much softer than forecast as a result of some [very] big UK taxpayers moving offshore in recent times," French stated.
This warning follows news that hedge fund tycoon Chris Rokos, estimated to be worth £3 billion, has relocated his residency to Greece, where he plans to open a new office. Rokos is identified as the UK's third-highest taxpayer. His departure echoes that of other prominent figures, including steel billionaire Lakshmi Mittal and Nassef Sawiris, the second-richest man in Egypt, both of whom left the UK after reforms to the non-dom tax regime were implemented in 2024.
Official data indicates a decline in the UK's millionaire population, which has fallen to 442,000, the lowest figure recorded since 2007 and a decrease of approximately 7 percent compared to the previous year. While some of this reduction can be attributed to weaker asset values, an increasing number of wealthy individuals are choosing to leave the country.
The situation arises amid speculation of further tax increases intended to fund government spending commitments, such as council house construction, social care reform, and defense spending enhancements. Despite stated desires from figures like Andy Burnham and Chancellor John Healey to foster wealth creation in the UK, some lawmakers within the Labour party have advocated for an annual wealth tax.
However, the implementation of a wealth tax is considered unlikely. Instead, the Treasury is expected to focus on adjustments to capital gains tax (CGT). Previous changes to CGT rates by former Chancellor Rachel Reeves, which raised levies for basic-rate taxpayers to 18 percent and higher-rate taxpayers to 24 percent on disposals, were described as a one-off "sugar hit" that could leave public finances vulnerable as investors and landlords alter their behavior to minimize annual tax bills.
Speculation surrounding potential tax changes in the lead-up to recent Labour budgets reportedly contributed to an 89 percent increase in CGT liabilities, as individuals accelerated asset disposals. However, this early realization of gains could lead to lower overall receipts in subsequent years, particularly as wealthy individuals seek to avoid higher taxes by relocating.
Research from Wealth Club suggests that over 60 percent of millionaire investors have contemplated leaving the UK due to concerns about rising taxation.