Tax

Data Shows Non-Doms Are Valuable Taxpayer Group; Don't Mess Up The System, Urges Law Firm

Tom Burroughes Group Editor London 7 September 2015

Data Shows Non-Doms Are Valuable Taxpayer Group; Don't Mess Up The System, Urges Law Firm

Figures on income tax payments from non-domiciled residents in the UK suggests that changes to this status will backfire, a firm argues.

Debate about the status of non-domiciled residents in the UK has been given a new twist by figures showing these persons paid more income tax in the 2013/14 financial year than a year before, standing at £6.6 billion ($10 billion).

Law firm Pinsent Masons, using a Freedom of Information Act request from HM Revenue & Customs in the UK, unearthed the figures, arguing that the government’s recent changes to the non-dom regime could endanger such tax payments in future. In his post-election budget, UK finance minister George Osborne changed the non-dom regime so that long-term non-dom status will cease to exist. Any non-dom taxpayer resident in the UK for 15 or more out of the last 20 years will be deemed domiciled for the purpose of income tax, capital gains tax and inheritance tax.

The total number of UK taxpayers indicating a non-domiciled status on their tax returns reached 114,300 in 2013/14 up by 3 per cent from 110,700 the year before. Some 5,000 non-doms also paid £223 million in the remittance based charge (non-dom levy) in 2013/14 on their overseas incomes, the same sum collected in 2012/13.  

Most non-doms are “highly mobile”, Pinsent Masons argues, which increases the likelihood that they will be prepared to leave the UK if it comes to be perceived as a hostile environment. 

In the 2012/13 tax year around a quarter of those claiming non-dom status were doing so for the first time, even though the total number of non-doms had actually fallen by 1,000 compared with the previous year. This suggests that significant numbers of non-doms may have left the UK during that period, the firm said.

 

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