Posts Tagged ‘UK tax’

Labour’s decision to abolish non-doms is tactically astute but strategically risky

08/04/2015, 05:54:55 PM

by Samuel Dale

There are 116,000 individuals resident in the UK but not domiciled here.

It means they pay no UK tax on their overseas income as their permanent home is judged to be in another country.

High profile non-doms include HSBC chief exec Stuart Gullliver, Tory peer Lord Ashcroft and Roman Abramovich.

Labour wants to restrict the maximum temporary resident status to two or three years. The only restriction today is to pay a £30,000 charge when a non-dom has been UK resident for seven years.

It’s good policy for three reasons.

Firstly, it is morally justified that everyone plays by the same tax rules.

Non-don rules are arcane, unfair and widely abused.

Business people support the change too to level the playing field – notably Dragon’s Den’s Duncan Bannatyne who signed a letter to the Telegraph last week but has switched his vote to Miliband after the move. That’s a big endorsement.

Secondly, it should raise some revenue although it is highly uncertain.

Some tax lawyers say up to £1bn, Labour says hundreds of millions and the IFS says it will raise more than zero.

And, incredibly, Labour will use the extra cash towards the deficit. Hallelujah! Even though it’s a tiny amount it is the first time in months a tax rise hasn’t been immediately spent elsewhere.

Thirdly, and in an election battle this is the most important, it’s politically astute.

I was convinced George Osborne would simply adopt the policy, claim it as his own and move on. The Crosbyite focus on the long-term economic plan has ruthlessly removed distractions.

Cameron pledged not to rise VAT last month while Osborne used the Budget to shoot every Labour fox out there from “1930s spending” to “falling debt”. Except non-doms.


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