Abolishing the non-dom regime would raise more than £3.2 billion each year, finds new report | London School of Economics

29 comments

  1. Excerpt:

    >Non-domiciled residents in the UK (‘non-doms’) receive at least £10.9 billion in offshore income and capital gains each year, which they are not required to report to HMRC or pay tax on in the UK. Taxing this income would raise more than £3.2 billion in additional tax revenue each year and also remove the current disincentive to invest in the UK.

    >Refuting concerns that abolishing non-dom status could lead to a mass exodus from the UK, researchers calculate that only 0.3% of those affected would leave the country (fewer than 100 people), most of whom are paying hardly any tax under the current regime.

    > 

    >These findings come from [new research](https://warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/bn38.2022.pdf) which gained unprecedented access to the anonymised tax records of the UK’s non-doms. The study, by researchers from the University of Warwick and The London School of Economics and Political Science (LSE), analysed the anonymised personal tax returns of everyone who claimed non-dom status for tax purposes between 1997 and 2018.

    >The researchers used evidence from reforms to the non-dom rules in 2017 to estimate how many non-doms would leave the UK as a result of abolishing the regime altogether or restricting it based on number of years residence.

    >On average, a non-dom using the ‘remittance basis’ tax break has £420,000 in unreported income and capital gains. This is more than ten times their UK investment income and gains – which do not receive a tax break – highlighting the cost for investment in the UK.

  2. That’s always assuming people don’t adjust their arrangements accordingly. It’s like whack-a-mole but sometimes the option you have isn’t as bad as some of the others.

  3. It would raise nothing, because these people would either a) leave the country or b) start to funnel all their income through a shell company in the Caymans.

  4. I’d like to understand on what basis they have calculated that only 0.3% of non-doms would leave the country for tax purposes if they changed the law.

    The reality is most non-doms are the exact type of international millionaire that would find relocating their income (if not their physical person) relatively easy.

    To hear someone confidently say that out of the 68,300 individuals with non-dom status in the UK they have calculated that only 205 of them would leave is quite a claim.

  5. Not sure why people are disagreeing with this.

    If people leave the country because they refuse to pay tax they are contributing nothing anyway so it’s still a win

  6. The guy who can close this loophole has a wife who has net worth of 750 million and receives 50 million a year in income overseas. There is no way he will close this.

  8. I honestly thought it would be more than that. I mean that’s like half a dodgey PPE contract for the tory government.

  9. Non dom regime is needed there’s a reason it exists it’s scope just needs to be made smaller

  10. I love how when people say they can leave people react with “but they take all their money with them as they pay tax on what they make in the UK and that would be lost”. But the thing is if they make money in the UK where does it come from? Is it a job based in the UK? Then if they go someone else will take that job and pay the tax. Do they run a company and will take that with them? Fine there will be a gap in the market for someone else to pick up. The only issues with people leaving is when they move their capital to another country but keep doing their business here, which is precisely what these individuals are already doing.

  13. Cue Tories making the argument that £3.2 billion is not that much in the grand scheme.

    Along with all the other schemes that would raise billions….. But “aren’t that much in the long run”.

  14. I have little doubt that it would raise significantly more than that. By definition, they dont have to declare it. Its a very conservative estimate of what isnt declared to them.

  15. I worked and lived in the Middle East for several years. I fail to see any reason why HMRC should have had a penny of my earnings when I didn’t even set foot on British soil for three years.

  16. An interesting study with predictably little attention paid to the relocation of wealth.

    If you want to do a scheme like this to target the wealthy, you need to look at Ireland and their coorporation tax progression and subsequent laws taxing those who leave, far in excess above those who stay.

    If you just delete a tax code, fold your arms and say pay me or leave, it’s pretty obvious what alot of very wealthy people will do.

  17. While I think this is morally and fiscally a step in the right direction it is by no means a complete solution. The UK needs to close the gap on about -£29B. Alot more tax revenue needs to be found or public spending cuts, probably the latter.

  18. So let’s be straight. No push for this to be removed. But now that we have a PM with skin in the game it should be removed or he is a baddy?…

  23. Abolishing the non-dom regime would raise fuck all each year finds new report from Professor of Common Sense at University of Life as they would relocate.

  24. Finding 10% efficiency in the social protection budget would save 10 times more than this. 21-22 social protection spend: £300Bi. 10% of that is £30Bi, which is roughly 10 times more than £3.2Bi.

  25. The Uk should mirror usa tax laws…. Tax all citizens on their world wide income regardless of residence and all residence in their world wide income. Remove the incentive for brain drain

  26. they throw a lot of money at the conservative party to keep this sort of thing off the law book

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