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The UK’s super-rich are moving offshore
The number of super-rich residents who pay no UK tax on their offshore accounts has fallen to its lowest level ever, according to Treasury figures.
Last year, there were 78,300 non-domiciled taxpayers, or “non-doms”, in the UK compared with 98,500 in 2016-17.
And the £9.5bn they paid to the taxman in 2016/17 fell to £7.5bn last year.
International law firm Pinsent Masons said the reason was Brexit and nervousness over the chances of a Labour government.
‘Internationally mobile’
New “deemed domicile” rules, which can draw non-doms fully into the UK tax net, may also have contributed to the drop.
Josie Hills, senior tax manager at Pinsent Masons, said: “Non-doms are internationally mobile and if the UK is no longer an attractive place for them, then they can easily relocate.”
Most non-doms are wealthy UK residents whose permanent home, or domicile, is outside of the UK.
They pay a “non-dom levy” – a remittance basis charge – of between £30,000 and £60,000, which allows them to pay no tax on offshore income and capital gains, unless the money is brought into the UK.
Revenue from that levy was £315m last year.
However, they have attracted controversy, with some claiming that the super rich use the status to avoid paying tax.
Mr Hills said “Brexit uncertainty” was driving out many of the wealthiest non-doms “who are not prepared to hang around to find out the outcome”.
She added: “The prospect of a Labour government is also very unappealing for high net worths – talk of monetary controls and wealth taxes are not well received. Given that there could be a general election in the near future, many will not be willing to take the risk that this becomes a reality.
“Non-doms make a huge contribution to HM Treasury’s coffers; this small group has contributed £45bn in tax over the last five years. The impacts of falling tax receipts from non-doms may only be felt once it’s too late.”