Hostility Towards Capital

Opinion by Tshepo Magagane

Carried interest (NB: The UK has always had rule of law, unalienable property rights and good schools, the “trifecta” for capital)  – I think the best line was from an MP of a key fund a few months back “we have people in offices around the world, so it wont be much of an issue” – you have to read what he is saying there!

The sad part about Labour tax policies is that there is zero economic rationale to it; just like we saw with “Brown-last-day-50p’ – just politics of envy “I went to Oxbridge/Redbrick with these PE guys, why is their life better than mine” – that is all!

From friends who are seniors at megafunds – NB: remember, as much as you may froth at the mouth “CARRY IS JUST LIKE EQUITY IN THE BUSINESS” – the stress these guys come under to come up with the cash for this…phew; then why would they just let politicians treat their investment in a business as income? They have no choice but to move out of the UK for tax purposes!

A. [If it was only 28 to 32 I think most people could live with that tbh……

It’s worse than this article suggests – further changes coming in 2026

Look at the drawdown article 

Tax advisors are still digesting the info as the headlines have a ton of small print with them….”qualifying carry”]

B.[The bigger issue for the UK economy imho is it scares off the foreign people who may have accepted the non-dom regime (similar to comment above on exit options). The UK has always had rule of law, unalienable property rights and good schools, the “trifecta” for capital -it’s so important, its the very bedrock of growth, you often lament the lack of capital pointing at Africa, imho the main reason for that is confidence in rule of law, its the very bedrock.

Let’s break it down

1) Pushing the national insurance tax cost on employers so you can tell people “we didn’t increase taxes” – great but hardly attractive to people looking to hire people in the UK if you are getting farmed for tax to suit their manifesto

2) VAT on public schools, total own goal, ideological move > but doesn’t cost them votes because the numbers aren’t big enough and you can bet hell will freeze over before Surrey returns a Labour MP…. UK private schools are a huge asset and appeal to the foreign investor choosing to move to the UK. Take an asset and make it worse, not the smartest move you could imagine but one of the few things these extremists are good at….. Plus the cost to the taxpayer of schools is next to nothing – ideology

3) IHT on farms, signals something sinister versus unalienable property rights, sure you own it, but you want to hand it on, pay. Asset rich versus cash. The thin end of the wedge? You are happy to go after non cash “gains” what next a wealth tax…… I know lots of people who are very well off, I can guarantee its not sat in HSBC paying 0.55%. The simple fact that the majority of the cabinet has never ever worked in a business which has to generate revenue is precisely the problem. No fan of the Tories but at least they understood the basics

4) Minimum wage has increased by c. 30% over the last three years, add in the NIC and employing someone is 10% more expensive based on a minimum wage/standard 37 hours – so where does that go? Inflation coming down, not likely going back up which robs every man and woman in the country blind. But don’t worry your £7 pint is now £6.99 but will be actually £7.20 so I can afford to absorb the staff costs you just put in. Only people who benefit from inflation is the government debt stack….

5) Look at the recent riots and allegations around Southport motives etc. The biggest thing that comes up in conversations is a concern around the UK and free speech, the UK, the mother of parliaments. Pre-budget the Speaker quashed discussion because of the ongoing proceedings, unheard of. Rule of law, application of such > confidence > belief. This is probably the biggest single issue > the lack of confidence. Tax is a number, confidence in due process is a feeling, people are starting to have doubts on the UK

So overall a self own, cutting into muscle and bone, simply because they have no idea what actually generates value. Good public services require a healthy growing economy

P.S Sheffield University was funded in part by contributions from steel workers to establish an institution to better people and create opportunities. Sheffield was an industrial power house. Today the two biggest employers in Sheffield are the NHS and University. No revenue is generated, just cost absorbed, a parable for the UK if ever there was one. Labour will destroy the very fabric of the UK.]