Non-dom numbers registered with HMRC plummet
11 Mar 2013
11 Mar 2013
The number of UK taxpayers registered with HMRC as non-domiciled (non-doms) has fallen by 2,000 in a year as the impact of the £30,000 annual non-dom levy continues to bite, government figures reveal.
The latest snapshot comes as a result of a freedom of information (FoI) request by international law firm Pinsent Masons, and shows that the number of non-doms in the UK has tumbled by 17% from 140,000 to 116,000 since the levy was introduced in 2008.
Jason Collins, head of tax at Pinsent Masons, says: 'The UK's tax code is seen as becoming increasingly hostile to "high net worths", especially those from overseas. There is a conflict here with the prime minister's promise to roll out the red carpet for wealthy foreigners, and it is also potentially undermining new tax rules introduced in 2012 to attract non-dom investment in UK businesses.
'The non-dom levy is part of a series of measures - both implemented and threatened - including the annual property tax and mansion taxes, the 50/45p tax rate and capital gains tax increases, which are driving highly mobile wealthy individuals from the UK.'
The £30,000 annual levy applies to all non-doms that have been in the UK for between seven and 12 years. From April 2012, the levy for non-doms in the UK for 12 or more years increases to £50,000. Non-doms can opt out of the levy if they agree to pay UK tax on their worldwide income and gains instead.
Collins added: 'Non doms are more important to the UK economy now than ever before. They have a choice about where to live. 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.'
'Policy on attracting high net worths to the UK is inconsistent. On the one hand we have entrepreneur visas and investor visas trying to boost the numbers of wealthy migrants, but on the other hand, wealthy migrants are being driven away by the non-dom levy and the constant stream of new measures to tax them more heavily, creating lots of uncertainty.'
The law firm said only a fraction of UK non-doms actually pay the annual charge, with the rest opting to pay income tax on their global earnings. It said 4.8% of non-domiciles paid the levy in last year, generating £168m for the Treasury.