In May 2013, just as my wife and I were starting to try for children and plan family life with hectic city jobs in Central London, a large multinational company head hunted me to join their research team near The Hague. While my research experience was strong, potentially, the key skill I brought was my intimate knowledge of their business through working for a major supplier on their account. The net income I would receive would enable me to provide for my family, while my wife could stay at home to bring up our children. Along with the ability to afford a reasonable family house 10-15 minutes from work, made the life the Netherlands offered attractive. We arrived in October 2013, my wife already 4 months pregnant with our first child.
We left our friends and family behind to do what was right for us based on all information provided. Within 2 months, we had bought a brand new car (our left hand drive car not being ideal when driving on the right and not knowing who to trust in an unfamiliar country and language, we did not have the confidence to buy second-hand). A few months later we bought a house with a mortgage offered based on my net (30% ruling) salary. In February, our first son was born. Nearly five years on and our second son joins us in a house that we've spent money improving, from re-doing the garden and bathroom, re-plastering the entire downstairs, having new windows fitted and re-decorating throughout. Similar to the car purchase, for all we know, we paid well above average for not knowing where to look or what was a good price. My point being, we contribute to the economy and did so above normal prices - something the 30% ruling alleviates to an extent. Similarly with insurance policies, Internet, mobile phones, utilities, none are particularly competitive because we didn’t know better. These small things add up and the 30% ruling helps here. But even without these investments and naiveties, the 30% is something we have taken a mortgage based on and taken all our decisions around. I have a signed letter confirming we have this benefit until 2021, which you trust inherently.
But now, out of nowhere, we are informed that all this may change in January 2019, our net income will drop by around 25-40% (20% income drop plus another 20% in tax on international schooling fees). And to some extent the worst part was the uncertainty. I believe nothing will be confirmed until the third Tuesday of September when the tax plans are unveiled. Assuming the worse and the communications to date are confirmed (that it will be applied retroactively, and thus we will lose the benefit on 01/01/2019 instead of 30/09/2021) we cannot afford to stay without considerable changes to how we finance our household income. In doing so, the benefits of being here versus home in the UK dwindle. But with a notice period of three months, we cannot wait until the third Tuesday of September to know we will have a big drop in income 3 months later. Instead we began looking for jobs back in the UK. Our preference was to stay for at least the remaining 3 years of our 8 years, and by then hopefully to be suitably settled to stay in the long term. We really loved the life we have here, but with the uncertainty, when offered a role back in the UK, we have decided to take it and relocate.
From happily enjoying life in the Netherlands with no consideration for leaving just a few months ago (prior to the announced retroactive change) to now preparing to move back, I cannot complain strongly enough about both this potential change when our whole financial planning and move to the Netherlands was founded on this promise for 8 years, but also the dreadful way it's been communicated with so much uncertainty and short timelines involved. Whatever the decision, we needed certainty on what to expect, so we could properly prepare accordingly. On top of this, we fundamentally lost trust in the government. Trust underpins a lot in society, and without this we just didn’t feel we could stick around to be screwed again in the future.
But as well as the impact on our lives, this whole 30% ruling change has made me reflect a lot about the benefit and legislation itself. Fundamentally a socialist, I have been very conflicted by complaining about a loss in benefit when there are people far worse off in the country. Also, many people who lose benefits in a government change, whether it be unemployment, disability benefit of something else. It is absolutely unfair to retroactively remove a benefit, but at least we have the ability to do something about it and leave. Yes, we were promised something that helped us decide to relocate our lives here, but equally it is not fair that I pay less tax than my neighbours.
Which brings me onto the long term horizon for the 30% ruling and skilled migrants. I have really struggled to understand the long term aim of the 30% ruling. Is it purely to attract 'skilled migrants' for a short period to then leave again? If there's a desire for 'skilled migrants' to settle (and when we moved here that was very much our plan, buying a house within our first year), it would make more sense for the 30% to reduce every year - regardless how long it lasts - so that the change isn't so dramatic from one year to the next. So whether it's five years or eight years, what is the wished position of the Dutch government? Are we simply a temporary solution to fill skill gaps or is there any long-term interest in having us here?
Anyway, we now plan our move back to the UK. I hoped to stay in the long-term, but while the income drop has the short-term impact, it is the removal of trust in this government that has completely changed our outlook on life here. Who knows what else might change? What and who can we ever trust?
To those who stay, good luck to you – and I hope the government do something to try to repair the trust that they have severely broken in the expat community.