‘I moved to the US for a better salary, and pay just 10pc tax'

Telegraph

11 hours ago

The American dream is still luring thousands of British workers across the Atlantic every year, in the hope of finding the success they lack in the UK.
Between 2022 and 2024, America was the most popular destination for British expats, surpassing countries like Australia and the UAE, according to the US census.
There are approximately 700,000 British citizens living in the US, spread across the country – with some 120,000 British born residents living in New York, 35,000 in Los Angeles and 15,000 in Washington DC.
One of the main draws, as Patricia Casaburi, chief executive of migration consultancy Global Citizen Solutions, points out, is that the US offers significant professional and academic opportunities for British workers – particularly in finance, technology, medicine and the arts.
'Salaries average 40pc to 50pc higher than in the UK, and while healthcare concerns previously deterred some, NHS challenges have made this less of an issue – as well as the fact that US healthcare is often paid by the employer,' says Casaburi. The firm she runs helps people find the best residency or citizenship to diversify their investments.
But there are downsides, as the British expats working state-side tell us. Some states, particularly New York and California, have 'hideous' taxes that eat into your higher salary, and of course there's healthcare insurance to factor in.
Plus, there have recently been hints from President Donald Trump that inflated taxes for the rich could be on their way.
'Despite hideous taxes, I'm never moving back'
Peter, a surgical device start-up co-founder who has been living in the US since 1999, considers himself more American than British. Bearing citizenship and a slight transatlantic twang, the 70-year-old doesn't miss his mother country at all.
He first began visiting in the 1980s for business, but it was meeting his wife-to-be on a flight to Denver in 1997 that redirected his path across the pond for good.
'I was coming out of my second marriage, and not looking for any form of relationship, but after several hours of talking, we knew it was right,' he says. After getting married and spending some time in Britain together, the couple moved to Washington DC, then San Diego and eventually settled in New York City in 2009.
As an entrepreneur, Peter earns three to four times what he would in the UK, while his wife, a broadcast journalist, earns eight to 10 times more.
This tracks with current data – according to the American compensation data firm Payscale, the average annual salary in New York is $93,000 (£70,000), compared to London, where it is £46,000 ($61,121). In a Northern city like Manchester or Leeds, it's more like £34,000 ($45,173).
Peter and his wife rent an apartment in a quiet part of Manhattan by the river, and own a beach house in Jersey Shore, but 'hideous' triple taxes are by far the most expensive aspect of life in New York. They pay a combination of federal, state and city tax, which equates to around 49pc of the couple's combined gross income – although, he notes, it's not as bad as in California.
'I'm fine with the high tax in principle here, but it's definitely the reason so many people leave New York – there are tons of US states where we could be paying considerably less,' he says, adding that his business is based in San Antonio, Texas, which provides some tax relief.
Although Peter now gets health insurance through his wife's employer, they were stung when the Affordable Care Act (otherwise known as Obamacare) was introduced in 2010. As co-owners of a business, the policy pushed the pair's health insurance costs up by 90pc, to around $2,000 each a month.
When they employed an assistant, the overall insurance dropped to $1,100 for all three, per month. 'I feel privileged to get good spousal coverage now,' says Peter.
His wife's job is likely to keep them in New York City for the foreseeable, but even if she were to leave, he'd never move back to the UK. 'In my view, Britons are always glass half empty – people have their lot in life and settle for it,' he says. 'They want to retire as soon as they can because they hate their job and have a state cushion.'
He finds people in America to be more ambitious and happy to continue working beyond retirement age. Launching a start-up as a septuagenarian, for example, has been viewed as completely normal behaviour by his peers, while in the UK, he believes he'd be an anomaly.
'Americans wear their salary like a badge of honour'
Katy McQuade, now 59, moved to the US from London in 1990, and agrees that one of the biggest differences is the drive to be successful and 'make your mark' – although it took her a while to get used to the characteristic braggadocio.
'You wouldn't wear your salary like a badge of honour in the UK, whereas here there's no shame in telling someone outright, whether they want to know or not,' she says.
Working as a realtor for the last 20 years, Katy lives in a small town called Carefree, near Scottsdale, Arizona. And carefree it often can be, as Katy pays a fraction of the tax charged in East Coast states like New York or Washington.
Arizona's income tax is just 2.5pc, property tax is 0.45pc of a home's assessed value, and the average tax and local sales tax comes to 8.38pc.
'I'm in quite a high tax bracket, but I try to find workarounds nonetheless – such as creating a PLC,' she explains. 'I pay 10pc tax on what I earn, although when I was making closer to $100,000 a year, I would have nudged into the 20pc tax bracket.'
Katy says she would happily pay higher taxes for better services and community upkeep, though.
'While we say we have a great tax rate, we're 42nd in education out of 50 states, and we don't get certain public services because they're not funded,' she explains. 'I'd prefer to live in a more educated state, and I think that's an important base for the general public.'
'There's a focus on entrepreneurship, which Labour is sucking away'
Although Paul, 64, has worked in a number of US cities for business, he's never lived in the US permanently. However, his position at a boutique marketing tech agency saw him make the switch from Exmoor, Somerset to New York City at the end of April.
'We're seeing more business opportunities in the US than in the UK or continental Europe, so I'll be here for around three years to concentrate on that,' he says. 'I also see more optimism and positivity towards earning money here, and certainly a focus on entrepreneurship, which Labour is sucking away in the UK.'
Soon to be joined by his wife, Paul is flat hunting in central Manhattan, and expects to pay $6,600 (£5,000) a month for a two-bedroom apartment.
'Back at home, we've been paying off our properties, and have rented them out while we're here, so although we're paying 10 times the costs for somewhere to live than in the UK, it feels doable,' explains Paul. 'All our children have grown up and left home, so we can enjoy the flexibility by coming here and taking advantage of everything.'
While there's often the impression that American employees get very little holiday, Paul will get roughly the same allowance as he does in Britain, with his company offering 20 days, plus the eight US public holidays. He's planning to spend big on trips to North and South America – first up is Yellowstone National Park, inspired by the couple's Netflix drama favourite Yellowstone.
His taxes will be slightly lower than in the UK, although that didn't sway his decision to accept the relocation. He hopes Trump will reduce them further, but recent hints from the president suggest otherwise.
He may let tax breaks for the richest Americans expire, returning their top income tax rate to 39.6pc – the same as before Trump's 2017 tax overhaul – from the current 37pc. It's a concern for Peter. 'It would be an extra 2pc on everything over $2.5m, or $20,000 for every million,' he says. 'It would really affect us.'
Casaburi says the proposed 'millionaire's tax' has surprised many clients and prompted wealthy British expats residing in the US to consider relocating to more tax-friendly jurisdictions.
'Rather than returning to the UK, which has significant taxes itself, British clients are exploring alternatives like Malta and Cyprus,' she says.
Those wishing to stay closer to the US for family or business reasons are considering Caribbean nations that offer favourable tax terms like St Kitts and Nevis, Antigua, Barbuda and Grenada.
'While the US remains attractive for Britons seeking professional and financial advancement, its appeal for high-net-worth individuals fluctuates with changing fiscal policies,' she adds.
Is the US losing its shine?
While there may be more money to be had in America, it doesn't win across all metrics that make a happy life. The US dropped form 23rd to 38th in terms of quality of life, according to data from Global Citizen Solutions.
'In contrast, the UK has remained firmly in the global top 10 across the quality of life, investment potential, and mobility dimensions, maintaining strong institutional trust and healthcare access, despite Brexit,' says Casaburi.
'For British nationals already living in the US or considering transatlantic relocation, these shifts are prompting more nuanced evaluations, not just of economic opportunity, but of long-term wellbeing, security, and stability.'
For Matthew, the American lifestyle was untenable. He relocated from London to New York in 2000, enticed by the fact that when he demanded double his already high programming salary to be doubled, 'they didn't blink', he says. 'I should've asked for 200pc.'
However, the relentless New York lifestyle – 6am workouts, 11-hour workdays, nights out with brokers, and just four hours of sleep – took their toll, and Matthew was eventually diagnosed with supraventricular tachycardia, a serious heart condition which can be triggered by stress.
In 2020, he and his family left New York for Bath, escaping a lifestyle that cost $20,000 a month – including $70,000 in school fees and $30,000 for health insurance.
Now, life is calmer and far cheaper. 'Even if someone offered me 10x what I'm on now, I wouldn't move back permanently,' he says. The kids love school, play in open fields, and have Olympians as coaches. 'Bath's been the death of aspiration,' he jokes. 'There's nowhere else I'd rather be.'
Peter, Katy and Paul are not planning a return to Britain any time soon. However, Katy says she makes regular trips back to the UK to visit family, and keeps a close eye on life across the pond.
'Right now, there is a lot of trepidation and nervousness about how to play your cards in the US, for expats and locals alike,' she says. 'We just have to wait and see how the cookie crumbles.'