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Tax system is hostile to rich individuals, claims law firm
The UK tax system is “becoming increasingly hostile” to the wealthy, according to international law company Pinsent Masons in response to figures that show a noticeable reduction in non-domiciled taxpayers since the introduction of a levy on overseas individuals.
Data obtained by the firm show that number of taxpayers registered to pay the on non-doms has dropped by almost a fifth (17%) since the annual remittance basis charge was introduced in 2008 at £30,000 a year for non-doms who had been in the UK for seven years or longer. A second band of £50,000 was added last year for those who have lived in the UK for 12 or more years.
“The levy is part of a series of measures, both implemented and threatened, which are driving highly mobile wealthy individuals from the UK,” said Jason Collins, Pinsent Masons’ head of financial services.
He highlighted the conflict between the government’s approach and “the prime minister’s promise to roll out the red carpet for wealthy foreigners”.
“Non-doms are more important to the UK economy now than ever before. They have huge spending power, invest in businesses and create jobs; they can't do this if they aren't here - and there are plenty of other countries competing to welcome them to their shores," warned Collins.
Only 4.8% of non-doms paid the charge last year, with the remainder opting to pay income tax on their global earnings, according to official figures, meaning the annual remittance basis charge generated £168m.
"The threat of the levy is driving away high net-worth individuals. To make matters worse, it is not even a significant revenue generator," said Collins, who added that non-doms are increasingly making shorter term investments and leaving the UK sooner than they would have done previously.
