A quarter of non-doms considering leaving the UK in the next 12 months

As featured in Accountancy Age – 26.11.18
  • Tougher tax regime biggest reason for non-doms considering leaving
  • Non-dom tax receipts now at highest level for a decade
A quarter (26%) of non-domiciled individuals are planning on leaving the UK in the next year.
The most common reason given by non-doms for considering leaving the UK was changes that have been made to the UK’s tax system.
The firm explains that rules on taxation of non-doms in the UK have become considerably stricter in recent years, with changes including:
  • a £60,000 annual charge for non-doms who pay tax on the so-called ‘remittance basis’ and have been resident in the UK for more than 12 of the last 14 years.
  • restricting the ‘remittance basis’ to non-doms who have been resident in the UK for 15 or fewer of the last 20 years – longer-term non-doms now must pay UK income tax on all their worldwide income.
  • new ‘failure to correct’ legislation, which introduced heavy new penalties for non-compliance around offshore assets, including penalties of up to 200% of the tax owed.
These changes have directly led to more non-doms considering leaving the UK in the short term. This risks triggering a significant hit to tax receipts – non-doms paid £9.4bn in income tax, capital gains tax and national insurance contributions in 2016/17. This is the highest level since 2007/08, and more than the entire total raised though inheritance tax, tobacco duties or customs duties over the same period.
The other most common reasons given by non-doms for considering leaving the UK were the less welcoming environment from the Government (26%) and Brexit (23%).
Simon Baylis, head of private client tax, comments: “As non-doms have the ability to leave the country at very short notice, the Government must be alive to the risk of losing them and the income they provide to the UK.
“Non-doms make an enormous contribution to the Treasury through the tax they pay directly. On top of that, the impact they make indirectly through their businesses, investments and job creation is also very substantial.
“Non-doms understand the role they have to play in being responsible taxpayers, and the statistics show that they more than do that. It’s important that the Government does not go too far, and treat them as unwelcome guests.”
To speak to a member of the team about this topic please contact Simon Baylis.

Leave a comment

 Security code