The total number of UK taxpayers with non-domiciled status grew 3% to 114,300 in 2013/14.
There were also 5,000 non-doms who paid £223m for the remittance based charge on their overseas incomes which totalled the same sum year on year, Pinsent Masons further revealed in its report.
This “considerable contribution to the UK economy” could be put at risk if the erosion of non-doms’ special tax status announced in the summer Budget encourages many of them to leave the UK, it said.
UK chancellor George Osborne announced in July that long-term non-dom status would be abolished from April 2017, aimed in particular at non-doms whose status has been inherited.
Under the these changes, any non-dom taxpayer residing in the UK for 15 or more of the last 20 years will be deemed domiciled for income tax, capital gains tax and inheritance tax.
For those people, the remittance basis of taxation will no longer apply to non-UK income and gains, and all UK residential property owned via an offshore company or other structure will be subject to UK inheritance tax.
Pinsent Masons highlighted how the majority of non-doms are highly mobile, which increases the likelihood that they will be prepared to leave the UK if it comes to be perceived as a hostile environment.
In 2012/13 around a quarter of those claiming non-dom status were doing so for the first time, even though the total number of non-doms had actually fallen by 1,000 compared with the previous year.
This suggested that significant numbers of non-doms may have left the UK during that period, Pinsent Masons said.
Fiona Fernie, partner and head of tax investigations at Pinsent Masons, said each year non-doms contribute a far greater amount than many realise.
“As a group they bring a wealth of skills, connections and knowledge to the UK. They also create jobs through investment in UK-based businesses. If they relocate to a more welcoming tax regime, even if they choose to retain some of their UK operations, they will inevitably take the best-paid management jobs with them to a new headquarters.”
She added that the changes in the Budget had led many non-doms to re-assess their position: “A large proportion are internationally mobile and will not hesitate to re-locate if a better deal can be found elsewhere. Any mass exodus of non-doms would be a substantial hit to the UK economy. Even the departure of a few of those who have invested the most in the UK would be damaging.”
