For years, we were told that a more managerial brand of Conservatism would deliver stability. Instead, the latter Conservative years quietly ratcheted up the tax take via frozen thresholds, and the new Labour government has doubled down on payroll costs. From April, employers pay 15% National Insurance, and the threshold was cut to £5,000, while the National Living Wage rose to £12.21 for 21-plus. That is a material hit to every PAYE run, not a rounding error.

The difficulty for businesses is not just the tax burden. The past year has also seen clear U‑turns in policy on workers’ rights. Few dispute that workplace protections deserve periodic overhaul, but when reform is weighted almost entirely from the employee perspective, it risks distorting the balance between sustainability and fairness. Sudden changes without transition planning or meaningful employer input feed into already fragile confidence in the UK as a stable base for employment. For some owners, this becomes another argument for shifting headcount abroad. The danger now is an irreversible domino effect: once offshoring decisions are made at scale, bringing those roles back onshore becomes unlikely.

You can see the consequences in the data points that do exist. Companies House records show 3,790 company directors left the UK in the months after the autumn 2024 Budget, up 40% year on year. April 2025 alone saw a 75% jump from the previous April. This is not noise. It is behaviour.

Broader migration figures set the context. In the year to June 2024, 79,000 British nationals emigrated, according to the ONS. Meanwhile, the OBR expects the overall tax burden to climb to a post‑war high by 2027–28. When you layer rising wage floors, higher employer NIC, and sudden regulatory shifts on top, owners of small and mid‑sized firms do what owners have always done: preserve margins and optionality.

Where do they look? The signals are clear. Dubai’s DIFC is booming, crossing 7,700 active firms with 1,081 new registrations in H1 2025. It offers speed, regulatory clarity, and a business community that is hungry for growth. South Africa is the other big winner for UK operators. It has become the fastest‑growing offshore location for UK contact centres, with the UK accounting for over half of SA’s GBS headcount and cost savings often in the 60–70% range. The economics are difficult to ignore.

Some will cite headline‑grabbing claims of a millionaire exodus. Use them carefully. Henley & Partners forecasts a record outflow this year, but early HMRC payroll data suggest fears of a mass non‑dom flight are, so far, overstated, and tax experts have challenged parts of Henley’s methodology. Regardless, boardrooms are already acting on payroll cost reality, not just wealth migration headlines.

The harder question is service. Offshoring can save money and create resilience, but clients do not buy our spreadsheets. They buy outcomes. If British firms push too far, they risk hollowing out the “high-level, service-oriented” edge that wins and retains accounts. The fix is unglamorous but proven: ring‑fence UK client pods with accountable UK leads; use SA or Dubai for scale and 24‑hour coverage; embed joint QA with call listening and CSAT tracking; and invest in deep domain training so offshore teams are not just cheaper but genuinely expert. Combined with regular in‑person rotations and transparent SLAs, this preserves intimacy while taking 20 to 40 points out of the cost base.



Policy makers should be honest about trade‑offs. With the PAYE bill rising by design, and worker‑rights policy shifts often executed without long‑term balance, owners will continue to redraw their delivery maps. The choice is not between offshoring and standards. It is whether we build delivery models that keep British relationship management at the core while sensibly arbitrating cost where it makes no difference to the client experience. Done right, we keep the trust at home and the admin where it is most efficient. Done badly, we export the heart of the service as well as the headcount.