number of uk non doms falls 16

19th March 2012

|

The news of the decline in the number of non-doms comes as the annual levy they pay is due to rise to £50,000 from April 2012, which McGrigor argues the Government should not allow to go ahead.

According to the data, which was obtained by McGrigors through a Freedom of Information Act request, the number of non-doms has slumped to 118,000 in 2009/10 from 140,000 in 2007/08 (see chart, below), and the numbers, McGrigors says, are continuing to fall.

McGrigors says that annual £30,000 levy on non-domiciles, sometimes referred to as the remittance basis charge, is thought to be a “significant contributory factor” in the decline in the number of UK-resident non-doms.

Just 4% of non-doms are paying the charge, and the number is still falling. It dropped to 5,100 in 2009/10 from 5,410 in 2008/09, the data obtained by McGrigors reveals, while the amount of tax collected by the charge also fell, to £153 million in 2009/10 from £162 million in 2008/09 – a drop of almost 6%.

Ray McCann, Director at McGrigors, says the “sharp decline” in the number of individuals claiming non-dom status “points to non-domiciles leaving the UK in their thousands”.

“A lot of the wealthiest non-domiciles are highly mobile,” he adds. “Many of them will have taken the £30,000 charge as a signal that they are no longer welcome in the UK.

“The charge was touted as a ‘flea bite’ when it was first mooted – but that flea bite has clearly been sufficiently irritating to drive thousands of non-domiciles overseas.

“With the amount of tax collected from the charge diminishing, there will come a point at which you have to question whether any additional revenue is being raised at all.

“Non-domiciles often have huge spending power, but if they’re not in the country, they can’t spend or pay any tax here.”

Worried about the numbers’

In arguing that the government should consider dropping the increase in the annual non-dom charge to £50,000, McGrigors notes that certain "significant tax changes" coming in April, which among other things will allow non-doms to remit income to the UK to finance commercial investments tax free, suggest that the Government may in fact be "worried about the numbers" of non-doms it is losing.