THE number of people registered as non-doms in the UK dropped for the first time in five years in the 2008-2009 tax year, as the rich fled higher taxes and the credit crunch, figures show.
The data, obtained by a freedom of information request, show that there were 139,000 people registered in the UK as non-doms in 2008-2007, but by the next year that figure had fallen by 16,000, or 11.5 per cent.
Experts say that the financial crisis can only account for a small part of the fall, with the majority attributable to a raft of complex regulations, including a £30,000 annual charge for longstanding residents, that came into effect in April 2008.
Critics warned at the time that the rule changes would lead to an exodus of highly mobile millionaires that would cost the UK economy more than it raised in tax receipts.
The Treasury said yesterday that roughly 5,400 people have opted to pay the £30,000 charge instead of leaving, amounting to revenues of £162m.
Phil Berwick, a director at McGrigors law firm, said: “The spending power that has been lost to the UK economy is surely going to be far in excess of the income gained by the Treasury.”
Since the General Election last year, the coalition has promised to crack down further on non-doms “to ensure they make a fair contribution to reducing the deficit”.
But Deloitte director Nicole Roberts said: “£162m is not that much in the grand scheme of things. It kind of gets lost in the rounding.”
Observers are particularly concerned about rules accompanying the charge that make it harder to bring money earned abroad into the country.
Ernst & Young’s Andrew Tailby-Faulkes said: “There are onerous conditions for bringing funds in even if it’s to invest in UK assets or businesses.”
He also says that the drop is especially surprising because the rule changes should in fact have brought more non-doms onto the books and reduced the number present that the Treasury does not know about.