Lobby group urges Rachel Reeves to rethink non-dom tax hikes to prevent wealthier citizens from leaving.
Chancellor Rachel Reeves is facing pressure from campaigners representing 74,000 UK residents (non-constituencies) to reverse her planned tax reforms, ahead of her next budget.
A newly formed group, Foreign Investors for Britain, is expected to meet with government officials this week to urge the return of Reeves’ proposal for an independent tax law, which would include an inheritance tax on foreign assets.
Non-doms, UK citizens but considered to be living overseas for tax purposes, are currently exempt from paying UK taxes on overseas income. However, Reeves’ proposed changes have sparked fears that wealthy non-locals will leave the UK, possibly resulting in a net loss of tax revenue rather than a boost to the Exchequer. In 2022-23, non-doms contributed £8.9 billion to UK tax revenue.
The lobby group, which was formed in June and has already met with Treasury officials, is proposing another phased tax plan. This will enable non-doms to pay a fixed annual sum, measured against their wealth, for a period of 15 years. Under the scheme, a person with a fortune of up to £100 million will pay a fee of £200,000 a year, while those worth more than £500 million contribute £2 million a year. Currently, non-doms pay up to £60,000 a year.
Leslie MacLeod-Miller, a spokeswoman for Foreign Investors in Britain, said: “We’re glad the government is listening because this is a real issue. Britain is becoming a haven, and without change, we risk losing important investment and tax money. “
The government has so far defended the proposed changes. A spokesman for the Department of Finance said: “We are tackling unfairness in the tax system to raise money to rebuild public services. The outdated non-residential tax regime will be replaced by a new residential regime focused on attracting the best talent and investment to the UK.”
The non-Dom debate comes amid wider concerns about Reeves’ first budget, which is expected to include significant tax changes as Labor seeks to rebuild the nation’s finances.
