Almost 69,000 taxpayers told HMRC they were leaving Britain permanently last year, as the number of people filing departure paperwork surged by 32 per cent.
The sharp rise comes amid a series of tax increases, with more Britons questioning whether they would be financially better off living abroad.
The figure is up from 52,000 the previous year, according to data compiled by national accountancy group UHY Hacker Young.
The findings are based on P85 forms submitted to HMRC, which taxpayers use to notify the tax authority that they are leaving the UK.
The increase comes after a series of tax changes introduced since the last General Election, including rises in Capital Gains Tax, Inheritance Tax and employers’ National Insurance contributions.
Higher Stamp Duty on rental properties and VAT on private school fees have also added to the financial pressures prompting people to consider moving overseas.
Changes to the UK’s non-dom tax regime have also played a significant role, with countries such as Italy and Switzerland offering more competitive tax arrangements for people who can move internationally.
Under the new rules, the period of favourable tax treatment available to new arrivals has been significantly reduced.
Previously, those benefiting from preferential treatment on income tax and Capital Gains Tax could receive relief for up to 15 years.
That period has now been cut to just four years. For Inheritance Tax, the period has been reduced from 15 years to 10 years.
Changes to the UK’s non-dom tax regime have also played a significant role
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Neela Chauhan, Private Client Tax Partner at UHY Hacker Young, said the changes were prompting more people to question whether remaining in Britain made financial sense, particularly amid concerns about further tax increases.
“More and more people are looking at the ‘tax deal’ they get in the UK and deciding they can do better overseas,” Ms Chauhan said.
“That’s as true for working people who do not consider themselves wealthy as it is for business owners.”
The trend is not limited to the ultra-wealthy, with ordinary families also increasingly considering a move abroad.
Inheritance Tax has become a particular concern for those looking to leave Britain
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GETTYInheritance Tax has become a particular concern for those looking to leave Britain, with some countries offering significantly different arrangements.
Ms Chauhan highlighted Sweden, which has no Inheritance Tax, as one destination attracting growing numbers of people leaving the UK.
“One major draw for people is a less-harsh inheritance tax regime than we have in the UK,” she said. “We’ve seen more people choose to move to Sweden, for example, where there is no inheritance tax at all.”
The true scale of the exodus is almost certainly larger than the official figures suggest. Many people who leave the UK permanently do not file a P85 form with HMRC.
Ms Chauhan said the number of forms submitted nonetheless serves as a useful indicator of the broader trend in taxpayer departures
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GETTYMs Chauhan said the number of forms submitted nonetheless serves as a useful indicator of the broader trend in taxpayer departures.
“We generally advise anyone leaving the UK permanently to file a P85 form to avoid confusion at HMRC,” she said.
“It also prompts HMRC to do a tax calculation. That can result in a tax refund in some circumstances.”
Ms Chauhan warned the Government that continuing to drag more ordinary families into the inheritance tax net will only accelerate the outflow.
“The Government must remember that increasing taxes will push more people to leave the country,” she said. “Inheritance tax in particular is a very unpopular tax.
“Continuing to allow more ordinary families to fall into the IHT net incentivises them to look elsewhere for a tax regime that gives them more for their money.”