The great tax tug-of-war: Should I stay or should I go?

KPMG International hosted a dinner in February 2026 in London as part of the Global Responsible Tax Program to explore how tax policy, mobility and wider public policy shape the UK’s competitiveness in an era of heightened global contestation.

The discussion brought together stakeholders from academia, civil society, professional services, media and policy. It was held under the Chatham House Rule. The write-up below summarizes the personal views expressed and does not necessarily represent the position of any organization, including KPMG International Limited or any KPMG member firm.

The conversation took place against a backdrop of fiscal constraint, geopolitical fragmentation, technological change and rising public concern about inequality and public service performance. Participants were invited to consider whether the UK is witnessing meaningful “tax flight”; how far tax influences mobility decisions relative to wider societal factors; and what policy choices might reconcile competitiveness, fairness and fiscal sustainability.

Better evidence could elevate the quality of debate.
 

Across ideological perspectives, there was agreement that improved access to timely, granular data would support more informed policymaking. Tax data lags, limited transparency on behavioral responses and reliance on anecdote were seen as debilitating barriers to rigorous evaluation.

Individuals file tax returns up to nine months after the end of the tax year. HMRC (His Majesty's Revenue and Customs) processing and publication cycles can add a further 9-18 months before usable statistics are available. In practical terms, this means it can take two to three years to observe the full fiscal effect of a policy change.

Some participants argued for enhanced investment in analytical capacity within government and independent research institutions, enabling scenario modelling and clearer assessment of trade-offs.

Mobility decisions are multi-factorial. Tax influences behavior, but rarely in isolation.
 

Participants drew on research, professional experience and anecdotal evidence to assess whether the UK is experiencing “tax flight”. While mobility headlines often focus on “millionaires leaving”, participants highlighted structural facts about the UK tax base. Roughly one third of UK income tax receipts are paid by the top 1 percent of earners. Approximately 25 percent of those in the top 1 percent were born abroad. Among the top 0.01 percent of earners, around 38 percent were born outside the UK.¹ For a sense of scale, the 0.01 percent represents roughly 5000 people.

This concentration means that relatively small movements within a narrow cohort can have meaningful fiscal implications, even if the absolute number of individuals involved is modest.

There was recognition that tax changes can generate behavioral responses, particularly among those who are already internationally mobile. Following non-domicile regime reforms in 2017, the emigration rate among affected long-term non-doms temporarily increased by six percentage points from a base of roughly 5%, before returning to its pre-reform level. Overall, an estimated 4.9% of affected individuals left because of the reform (although it was pointed out that 95.1% remained). Those who remained UK-resident increased their UK-reported income and income-tax liability by around 50%.²

Some saw this as evidence that moderate reform need not trigger large-scale flight. Others noted that marginal outflows could still matter fiscally if concentrated among particularly high contributors.

Policy volatility may have a greater deterrent effect than headline tax rates.
 

A recurring theme was the importance of stability. Even participants who accepted the case for reforming legacy regimes argued that repeated revisions (and public debate around possible future changes) can undermine long-term planning.

For internationally mobile individuals, decisions about residency, investment and family arrangements often span decades. Where tax frameworks are perceived as unpredictable, this can weigh heavily in location decisions, even if overall tax burdens are not out of line with peer jurisdictions.

Comparisons were made with jurisdictions perceived to offer greater certainty through advance rulings or negotiated clarity. The point was not that lower-tax models are universally preferable, but that clarity itself carries economic value.

Debate over wealth taxation reflects deeper tensions about inequality, opportunity and social cohesion.
 

The discussion moved beyond mobility to consider the broader context of inequality and intergenerational wealth.

Participants referenced research suggesting that inheritances are becoming a more significant share of lifetime resources for younger cohorts, reinforcing structural disparities. A particularly striking statistic used was that if all wealth transferred in a given year were evenly distributed across a single age cohort (e.g., all 25-year-olds), the average inheritance would be approximately £120,000 per person. However, distribution is highly unequal. Children of the poorest fifth of parents inherit on average around £2,000. Children of the richest fifth inherit on average around £380,000. For individuals born in the 1960s, inheritances accounted for roughly 9 percent of lifetime resources. But for those born in the 1980s, that share is closer to 16 percent of lifetime resources.³

For some, this strengthened the case for more active wealth taxation to address perceived imbalances and fund public services. Others cautioned that poorly designed measures could be economically distortive or politically counterproductive.

There was shared recognition that public support for taxing “extreme wealth” appears strong in survey data. However, translating attitudinal support into durable policy remains complex, particularly given concerns about capital mobility, international arbitrage and administrative feasibility.

Competitiveness is intertwined with perceptions of institutional performance.
 

A notable point of convergence was the importance of public service quality and institutional trust. Participants reported that high-income individuals often frame dissatisfaction less in terms of tax levels and more around perceived decline in infrastructure, health services, judicial timeliness or education quality.

Younger cohorts, meanwhile, face structural challenges (notably housing affordability) that shape life choices and perceptions of opportunity. While not solely a tax issue, housing supply constraints and asset price dynamics intersect with wealth inequality and fiscal design.

Trust in government’s ability to use tax revenues effectively was described as a critical variable. Where trust is low, resistance to higher taxation intensifies, even if redistribution arguments are accepted in principle.

Tax competition unfolds within a broader geopolitical realignment.
 

The mobility of individuals was situated within wider global shifts — technological sovereignty, subsidy competition and evolving trade blocs. Some participants questioned whether mid-sized economies can meaningfully insulate themselves from global tax competition without coordinated action.

The experience of the OECD’s global minimum corporate tax (Pillar Two) was referenced as an example of complex, politically contingent cooperation. Extending similar coordination to personal taxation was viewed as significantly more challenging, particularly in a fragmented geopolitical environment. It was advised not to wait until there’s a problem (as it was suggested happened with corporation tax) to begin collaboration — or it will be too late.

At the same time, some argued that overemphasis on tax competition risks obscuring more structural determinants of attractiveness: sectoral strategy, research ecosystems, regulatory clarity and social stability.

The structure of incentives may matter as much as their scale.
 

Discussion touched on the design of the UK’s foreign income and gains regime, and whether current arrangements optimally encourage productive domestic investment.

Some participants suggested that if preferential regimes are retained, greater alignment with domestic investment objectives could enhance legitimacy and economic impact. Others warned that layering complexity onto an already intricate system could exacerbate administrative burdens.

More broadly, there was interest in whether the UK should focus less on defensive retention of existing wealth and more on proactive attraction of talent and entrepreneurship aligned with long-term growth sectors.

The discussion made clear that mobility decisions sit at the intersection of fiscal design, institutional trust, quality of life and long-term economic opportunity. Tax is a lever, and in a highly concentrated tax base, even marginal movements matter. But it operates within a broader ecosystem of certainty, public service performance and strategic clarity.

There was no consensus on the optimal balance between competitiveness and redistribution, nor on the appropriate scale or form of wealth taxation. Yet there was notable convergence on several points: that policy volatility carries costs; that inequality and housing pressures are reshaping public expectations; that trust in institutions is central to any durable fiscal settlement; and that better data is urgently needed to ground debate in evidence rather than anecdote.

• Arun Advani, Director, CenTax
• Caitlin Boswell, Head of Advocacy & Policy at Tax Justice UK
• Adelle Greenwood, Technical Manager - Tax, ICAEW
• David Murray, former head of Tax Policy and Sustainability, Anglo American
• Matt Painter, Managing Director, Risk & Reputation, Echo Research
• Michael Simmons, Economics Editor, The Spectator
• Heather Smith, Communications Director, 99% Organisation
• Tim Sarson, Head of Tax Policy, KPMG UK
• Conrad Turley, Head of Global Tax Policy, KPMG International
• Becky Holloway, Partner, Jericho
• Neal Lawson, Partner, Jericho