The number of non-domicile residents who reside outside the UK has fallen over the last year by 13% to 78,300.
This has hit Treasury revenues and tax paid by non-domicile residents has dropped by 21% to £7.5bn, Pinsent Mason law firm said.
Josie Hills of Pinsent Mason warned, “Brexit uncertainty is driving out many of the wealthiest non-doms who are not prepared to hang around to find out the outcome.
“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.”
Chris Gillman, private client senior manager at accountancy firm, Menzies LLP, said, “The rule changes effective from April 2017, which mean people are treated as domiciled in the UK far sooner than before, have begun to have an impact on non-dom numbers and in some cases, we are finding that non-doms are considering leaving the UK sooner than otherwise planned.
“HMRC has indicated that these figures have been skewed by people who are switching to domicile status and continuing to pay tax in the UK. With this in mind, we believe the value of these people’s contribution to the UK economy is under stated.
“Despite this understatement, these figures confirm the valuable contribution that non-doms continue to make to the UK economy, with tax and national insurance receipts in fact in excess of the £7.5bn figure quoted for 2017/18.
“For many years, the UK has been an attractive place to live due to its comparatively stable economic and political system. Now, with Brexit dominating the political and economic agenda, non-doms have been left feeling somewhat unwanted and the UK economy is losing out as a result.”
Leave a Comment