Bristol's richest man won't pay 50p tax rate

Bristol's richest businessman, Peter Hargreaves, is threatening to leave the country rather than hand half his income to the taxman.

Chancellor Alistair Darling announced a 50 per cent tax rate for those earning more than £150,000 in last week's budget.

It means the 63-year-old entrepreneur, co-founder of financial adviser Hargreaves Lansdown, would have to pay an extra £500,000 a year in tax.

He told The Times business supplement: "I won't pay. I'll leave. Why wouldn't I? If I stay I'll pay half a million more a year in tax.

"If I leave the country I can save £3 million a year. It's almost like the Government is offering me a bribe worth £3m a year to go and live abroad."

Mr Hargreaves, who started his business in a bedroom in Clifton in 1981, is now the fifth richest man in the West Country, according to The Times Rich List.

If Hargreaves was starting out in business now, he wouldn't have chosen Britain.

"I sat down with my wife on Wednesday night (after the budget) to start talking about where we are going to go," he said.

"I paid £13m in tax last year. I wouldn't mind if it was money well spent.

"Does the Government not realise that any time any country in the world has raised taxes the people in the upper echelons pay less tax, because they avoid it.

"The tax take from the very wealthy will go down and they will end up taxing the poorer people because the wealthy people will just avoid it."

The Isle of Man and Monaco are two locations he is looking at.

Hargreaves sold shares worth £75m last year, but kept a £281m stake in his company.

His partner, Bristol City chairman Stephen Lansdown, 55, also sold shares but kept a major stake in the firm which employs more than 600 people and is the largest independent stockbroker outside London.

When the company floated on the stock exchange in May 2007, just before the credit crunch struck, the two entrepreneurs pocketed £150m between them. About 20 of their staff also became millionaires.

Bristol is still benefiting from the company's success.

Only two weeks ago Stephen Lansdown sold £47m of shares in the company to finance the construction of a new stadium for Bristol City football club.

Head of Research at Hargreaves Lansdown, Mark Dampier, said: "We all feel the same way. It's certainly a disincentive to work any harder."

Mr Hargreaves is not alone.

Leading accountancy firms have been inundated with calls from business people running firms both large and small worried about the tax hike.

"Lots of people, who have paid taxes in good faith and helped make the UK a lot of money, are now saying 'enough is enough'," said Michael Wistow, head of tax at the City law firm Berwin Leighton Paisner.

But Simon Woodroffe, founder of Yo! Sushi and former star of Dragons' Den, doesn't agree.

He said: "The 50 per cent tax rate is the right thing to do. We live in this blame culture, forever pointing fingers at politicians. It's all our faults. Anyone who is earning more than £150,000 is very rich and ought to spend more.

"Does it stop an entrepreneur? I think not. I met very few people who did it for the money. I've met a lot who did it for the fear of not having any money.

"There's lots of reasons that drive people, whether it's ego or trying to prove something to someone."