Non doms in the UK paid £6.57bn in income tax in 2014/15, ten times more than average taxpayers, although the group is currently facing further tax changes pending final HMRC consultation
Pinsent masons, a law firm, reveals that HMRC collected an average of £56,589 per nom-dom in income tax this year compared to the average £5,152 collected from the rest of the population.
In 2014/15 there was around 116,100 non-doms that submitted tax returns, which was up 2% from 114,300 the year before.
As well as income tax they also pay significant amounts in capital gains tax and VAT.
However, there are concerns that this tax revenue, as well as investment and job creation brought by non-doms, may be lost if the government’s proposed changes to the status prompt too many to leave the country.
From April 2017, government reforms mean that long-term non-dom status will no longer exist and any non-dom taxpayer resident in the UK for 15 or more out of the last 20 years will be deemed domiciled for income tax, capital gains tax and inheritance tax.
In addition, all UK residential property owned via an offshore company or other structure will be subject to inheritance tax.
Fiona Fernie, partner and head of tax investigations at Pinsent Masons, said: ‘Non-doms make a highly valuable contribution to the UK economy and any substantial exodus could have serious long-term impacts. Policymakers need to consider what they might lose by placing the status under threat.
‘As a group, non-doms pay billions in tax and bring huge combined spending power, skills and valuable connections to the UK. Many are highly successful entrepreneurs and businesspeople meaning they establish or invest in UK-based companies, thereby creating thousands of jobs.
‘The availability of non-dom status awards the UK a real competitive advantage when it comes to attracting wealthy and talented individuals. Removing or altering it now, especially in the wake of uncertainty generated by Brexit, will mean many look seriously at relocating.
New York, Hong Kong and other major financial centres are always looking to attract these people, and will be keen to show they can offer a better deal. Many non-doms are internationally mobile and will not hesitate to move if the grass looks greener. Dismantling the tax status will do little to keep them here in the UK.’
