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\t\tRumours of a non-dom exodus have plagued the Treasury since the government announced its non-dom crackdown last October (Photo by Hollie Adams\/Getty Images)\t<\/p>\n
Since the Chancellor announced her non-dom crackdown, advisers, campaign groups and economists have warned an exodus of wealthy foreigners is afoot. But after a report claimed that departures were less extreme than feared, Ali Lyon digs into the data.<\/p>\n
There are lies, damned lies, and statistics. <\/p>\n
Popularised by Mark Twain, the phrase describes people\u2019s tendency to cherry pick from data to bolster an argument they were already intent on making.<\/p>\n
Just this month, Donald Trump fired the boss of America\u2019s most important economic data agency<\/a>, accusing her of \u201crigging\u201d jobs data to make him \u2013 and his Republican party \u2013 \u201clook bad\u201d.<\/p>\n Closer to home, there have been few areas where the witticism has been more painfully evident than across one of the year\u2019s most salient economic debates: just how many wealthy foreigners have left \u2013 or are leaving \u2013 the UK in the wake of Rachel Reeves\u2019 decision to abolish the non-dom regime in the Autumn Budget<\/a>?<\/p>\n Ever since, and indeed long before, Britain\u2019s first female Chancellor ploughed ahead with Labour\u2019s promise to end the centuries-old tax status, ranks of accountants, advisers and lawyers have been warning it would cause their well-heeled, footloose client base to flee.<\/p>\n It was even the catalyst for the formation of the UK\u2019s first ever non-dom lobby group<\/a>, which has campaigned doggedly, if unsuccessfully, to secure a U-turn or replacement scheme from the government.<\/p>\n But a paucity of official data has meant officials, economists and journalists have had to rely on a sub-optimal blancmange of anecdotal evidence, unempirical studies and, most recently, official numbers briefed to the media which only show part of the story, to establish what is going on.<\/p>\n Foreign Investors for Britain, the aforementioned lobby group, has itself commissioned a series of useful \u2013 albeit not wholly statistically significant \u2013 papers from the independent data firm, Oxford Economics.<\/p>\n Each polled non-dom members \u2013 and their advisers \u2013 on how close they were to leaving and the key factors driving them away. They also collected potential solutions that respondents suggested might simultaneously manage to keep them in the UK and ensure they contribute more to the UK\u2019s creaking public finances than under the outgoing regime.<\/p>\n These findings have been accompanied by a smattering of research from relocation experts like Capgemini<\/a> and \u2013 most controversially \u2013 Henley & Partners, whose \u2018Wealth Migration Reports\u2019 have been the subject of intense scrutiny. While the studies reflect a growing bank of anecdotal evidence, their methodologies have been found wanting. In lieu of other data points, Henley & Partners\u2019 \u2018Wealth Migration Reports\u2019 \u2013 for example \u2013 relied in part on individuals\u2019 stated locations on Linkedin when it warned the UK had lost the most millionaires of any country in the world in 2024.<\/p>\n The steady stream of these papers, warnings<\/a> and individual departures becoming public<\/a> has naturally triggered fears that an exodus of non-doms \u2013 and indeed wealthy individuals more generally \u2013 from the UK was afoot, and that the fiscal picture was worsening with every departure. But it has also sparked an impassioned rearguard action from campaigners and think tanks from the other side of the political divide.<\/p>\n Some \u2013 understandably \u2013 have sought to question the shaky data on which a portion of the \u2018pro-exodus\u2019 narrative is based<\/a>. Others \u2013 less understandably \u2013 have jumped with alacrity on data which suggests those warnings are overdone, wilfully ignoring the fact that their numbers of choice also suffer from methodological flaws. <\/p>\n All of which is to say, absent official data \u2013 data that won\u2019t surface from our pedestrian tax authority until 2027 \u2013 we have been forced to rely on a thin gruel of partial numbers hand-picked by both sides of the political divide.<\/p>\n This phenomenon was especially evident in the aftermath of a newspaper report that surfaced last week<\/a>. Citing unnamed sources who had been \u201cbriefed on findings\u201d of an HMRC data scrape, the story revealed that payroll numbers had found no evidence to suggest that more non-doms left Britain than official forecasts had predicted.<\/p>\n Roughly a quarter of wealthy foreigners with foreign-held trusts \u2013 the cohort most affected by Labour\u2019s more draconian interpretation of the Conservatives\u2019 similar policy \u2013 had left in response to the Chancellor\u2019s maiden budget, it said. This was, the report continued, in line with unpublished Office for Budget Responsibility (OBR) predictions \u2013 cited but not shown \u2013 about the number of departures.<\/p>\n Unsurprisingly, it solicited a flurry of follow-up stories<\/a> and statements<\/a> from voices who had always wanted to be sceptical of the exodus narrative. Fears of a tidal wave of non-dom departures had been overblown, they argued; a confection of the media and non-doms\u2019 advisers, eager for the exposure a punchy intervention would earn them.<\/p>\n But leaving aside any philosophical debate over what constitutes an \u2018exodus\u2019 (a quarter leaving the UK in just a few months is not insignificant, no matter how it is framed), experts have pointed to several flaws in the report. Much like the opposing Henley & Partners research that preceded it \u2013 unnamed government officials responsible for leaking the story were leaning on convenient numbers rather than necessarily accurate ones.<\/p>\n Dominic Lawrance, a partner at Charles Russell Speechlys, said the story\u2019s reliance on payroll data means it \u201cneeds to be carefully questioned\u201d.<\/p>\n In using numbers from PAYE tax receipts, it only tracked the number of non-doms paying income tax up front, in the same way any worker on a full-time contract would. It could be a useful \u2013 albeit still flawed \u2013 early indicator as to how many non-doms were leaving, but only if all non-doms worked in salaried jobs.<\/p>\n But according to Lawrance, \u201cmany of the wealthiest and most economically significant non-doms are not employees at all\u201d. <\/p>\n \u201cMany are successful business owners and choose not to take a salary, others generate their income overseas or from other sources,\u201d said Kate Johnson, private client partner at Wedlake Bell.<\/p>\n \t\t\t\t\tRead more<\/p>\n \t\t\tOfficial statistics have become useless<\/a><\/p>\n Arun Advani, a senior academic from the University of Warwick whose research helped form the intellectual bedrock of Labour\u2019s non-dom policy, believes approximately 80 per cent of non-doms will receive at least some income.<\/p>\n \u201cMost remittance basis users [a category of non-dom who paid \u00a390,000 a year to keep all their foreign assets and gains outside of HMRC\u2019s orbit] have some earnings, with roughly four out of five appearing in the PAYE data,\u201d he told City AM.<\/p>\n This, he added, leaves an \u201cimportant minority\u201d who would not appear in PAYE data, albeit one whose tax bills are likely to be lower.<\/p>\n \u201cThose on payroll will tend to be bigger taxpayers \u2013 a superstar banker will typically pay more tax than someone living off a trust,\u201d he said.<\/p>\n That notwithstanding, several wealth advisers \u2013 including David Lesperance, founding partner at tax advisory Lesperance & Associates \u2013 have warned that, by definition, salaried non-doms are likely to have more ties to the UK, making them less likely (or slower) to leave. Thus, a greater proportion of the 20 per cent not included in the payroll data, will have quit the UK.<\/p>\n \u201cA \u2018millionaire\u2019 non-dom dentist in Manchester has a significant amount of life inertia,\u201d he told City AM. \u201cAlong with having their entire client base within 10km of their office, they probably own a dental clinic and have significant capital investment in difficult to move equipment.<\/p>\n \u201cIn comparison a centi-millionaire non-dom is less likely to have to remain in the UK to make and maintain their wealth.\u201d<\/p>\n \u201cWhen this group looks at the loss of the remittance basis but more importantly the IHT hit in the October Budget, they are much more likely to leave,\u201d he added.<\/p>\n Lesperance\u2019s is a conclusion with which Lucy Woodward, a partner in City auditor Saffrey\u2019s private wealth team, agrees.<\/p>\n \u201c\u2018The ultra-high-net-worth, high-profile cases of departing non-doms typically won\u2019t be working under PAYE therefore will not be reflected in PAYE record,\u201d she said.<\/p>\n Above and beyond whether payroll data is an accurate picture, there are even questions in Whitehall over whether HMRC is able to collect the payroll numbers in question.<\/p>\n \u201cThe data doesn\u2019t exist\u2026 the analysis won\u2019t have been done. And if it has, it won\u2019t have been shared with the Treasury yet,\u201d one senior official said. HMRC did not deny the claims when City AM put them to the tax authority, and declined to comment.<\/p>\n In lieu of any reliable, accurate data, anecdotal evidence \u2013 like plummeting super-prime property valuations<\/a> and a dearth of work for London-based butlers<\/a> \u2013 has become important.<\/p>\n In that realm, the direction of travel has constantly pointed towards a substantial number of former non-doms choosing to leave in the face of the changes.<\/p>\n \u201cAlmost all the sellers in luxury London property are non-doms looking to leave,\u201d one buying agent for high-end foreign nationals told City AM.<\/p>\n And Magda Wierzycka, a Polish-South African entrepreneur who this month ploughed ahead with plans to leave the UK having lived in Britain since 2017, told this newspaper of one drinks party she attended in London where 45 of 50 attendees had either technically left already or were planning to do so soon.<\/p>\n \u201cOne friend [one of the richest men in South Africa, who was based in the UK] called me last week asking to go for dinner. I thought, \u2018Absolutely, we\u2019re neighbours,’\u201d she said in the same interview in the aftermath of the Autumn Budget.<\/p>\n \u201cAnd he says to me, \u2018No, I\u2019m in Geneva. I\u2019ve relocated to Geneva.\u2019\u201d<\/p>\n Anecdotal evidence must \u2013 of course \u2013 be treated with a handful of salt, too. But if Mark Twain made it fashionable to hold a magnifying glass up to the tyranny of shoddily compiled statistics, it was another household name \u2013 less renowned for his contribution to the English language \u2013 who produced an illuminating line on what to do when stats and hearsay appear to diverge.<\/p>\n \u201cWhen the data and the anecdotes disagree,\u201d Jeff Bezos said in 2023<\/a>, \u201cthe anecdotes are usually right.\u201d <\/p>\n \u201cIt\u2019s usually not that the data is being miscollected. It\u2019s usually that you\u2019re not measuring the right thing.\u201d<\/p>\n \t\t\t\t\tRead more<\/p>\n![\"Rachel](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/GettyImages-2181228503-e1737741294330.jpg\")
Rachel Reeves announced her changes to the non-dom regime at last year\u2019s Budget (Photo by Leon Neal\/Getty Images)Unreliable data on non-doms<\/p>\n![\"Picture](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/resize-1739356775109163009gettyimagesruchardgnodde.jpg\")
Goldman Sachs\u2019 Richard Gnodde is one of several high-profile non-doms that have indeed left the UKPayroll numbers must \u2018be carefully questioned\u2019 <\/p>\n![\"London's](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/08\/london-prime-property-1200-x-800-1.jpeg\")
London\u2019s super prime property market has plummeted in the wake of the Chancellor\u2019s crackdown (Credit Beauchamp Estates)Anecdotal evidence points one way<\/p>\n