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The quantity of tax paid by individuals with non-dom standing hit £8.9bn in the 2022-23 monetary 12 months, up 6 per cent on the earlier 12 months and the best stage since rule adjustments had been launched in 2017.
Statistics from the UK tax authority printed on Tuesday confirmed the whole quantity of UK revenue tax, capital good points tax and nationwide insurance coverage contributions liabilities by non-doms had elevated by £474mn in 2022-23.
The knowledge additionally revealed an uptick in the variety of non-doms to 74,000, up from 68,900 the earlier 12 months.
There just isn’t but any knowledge on how non-doms are responding to the brand new authorities’s plans to abolish non-dom standing and clamp down on tax privileges for these affected.
Since adjustments had been first proposed to the regime in March by the earlier Conservative authorities, advisers to the rich have reported a rise in non-doms deciding to leave the UK.
The present regime permits individuals resident in Britain, however with their everlasting residence or “domicile” exterior the nation, to pay UK tax solely on their UK revenue and capital good points. They don’t pay UK tax on their overseas revenue or good points, except they convey these again — or “remit” them — into the nation.
In its manifesto Labour mentioned it might exchange the prevailing guidelines “with a modern scheme for people genuinely in the country for a short period”. It additionally pledged to take away the flexibility of non-doms to completely protect overseas property held in a belief from inheritance tax.
Anthony Whatling, managing director at Alvarez & Marsal Tax, mentioned the rise in non-dom numbers revealed in HM Revenue & Customs’ statistics was “likely to be shortlived given the Labour government’s upcoming tax reforms”.
“While it may take two years for these proposals to be reflected in official statistics, anecdotal evidence already suggests a substantial number of non-doms are seriously considering relocating from the UK,” he mentioned.
“We have already seen several non-doms accelerate their plans to leave the UK and expect the numbers of departures to increase over the coming month,” added Elsa Littlewood, a personal shopper tax companion at BDO, an accountancy agency.
Nicholas Hyett, funding supervisor at Wealth Club, mentioned regardless of the statistics being a “glimpse into the past”, they confirmed “how important it is to get [the] new regime right”.
“£8.9bn of tax revenue is not to be sniffed at, and while taxing the rich might raise more revenue it also runs the risk that the global elite decide to move their taxable wealth somewhere with a lighter touch tax regime,” he added.
However, others welcomed Labour’s plans for tax reform.
Rachael Henry, head of advocacy and coverage at Tax Justice UK, a stress group, mentioned: “It is only right that those choosing to make their lives in the UK, benefiting from shared services, infrastructure and opportunity, pay their fair share. This will help channel much needed revenue into the key services we all rely on like hospitals, waste collection and everything in between.”
Since 2017, people who’re “deemed domiciled” — overseas nationals residing in the UK for not less than 15 of the previous 20 years — should pay tax on all revenue and capital good points. Annual costs apply to any overseas nationwide who has been resident for greater than seven years, however needs nonetheless to profit from non-dom standing.
Non-doms and people deemed domiciled collectively contributed £12.3bn in the 2022-23 tax 12 months, HMRC’s figures revealed, down barely from the £12.4bn paid the earlier 12 months.
