Farewell Non-Doms: How non-dom reforms can damage Britain’s finances

If the Government enacts its plans to abolish non-dom tax status, this could cost the UK £6.5 billion by 2035, and 23,000 jobs by 2030;

• This will be due to lower investment in capital, a drop in tax revenue, reduced consumption across the economy, and a corresponding loss of jobs;

• These figures are drawn from new research by the Adam Smith Institute, a leading economic think tank, which assessed the potential economic impact of just 5,800 of the 21,100 remittance basis non-doms exiting the country;

• Non-doms are expected to leave for a number of reasons, including the abolition of their current tax status, increased taxes on High Net Worth Individuals (HNWIs), the UK’s poor economic outlook, and hostility towards wealth-creators;

• It is in Britain’s interest to attract and retain as many non-doms as possible, given that the contribute billions each year through taxes and economic activity;

• However, the UK’s current offering to HNWIs is uncompetitive, especially when compared to European rivals such as Switzerland, Spain and Italy;

• This paper proposes an Italian-style annual flat fee of £150,000 for highly mobile wealthy individuals who are resident, but not domiciled, in the UK. If all current non-doms were willing and able to afford this fee, this could raise £12.45 billion a year in tax revenue, while attracting more non-doms to our shores;

• Former Chancellor of the Exchequer Nadhim Zahawi calls on the Chancellor to heed these warnings, and consider the Adam Smith Institute proposals to prevent an exodus of  High Net Worth Individuals from the UK,  and to boost revenue and investment in the UK.