As Labour looks to hit non-doms in one of the few substantive policy announcements of the campaign so far, some experts are warning Labour not to kill the goose that lays the golden egg.
According to international law firm Pinsent Masons, non-doms paid a whopping £6.18bn in income tax alone in 2012-13 despite the actual number of non-doms falling. The number of people claiming non-dom status fell from 139,000 in 2007-8 to 110,700 in 2012-13.
Non-doms also pay substantial sums in capital gains tax and VAT. Those who enjoy non-domiciled tax status pay the same UK taxes as any other British citizen – but their foreign income that isn't remitted to the UK is tax exempt.
“Non-doms are often portrayed as a group who exploit loopholes to pay little or no tax. In fact they make a significant contribution to the Exchequer," said Paul Noble, tax director of Pinsent Masons.
“If UK taxes on non-doms are increased then at the very least they are very likely to review their exposure to UK taxes and how their assets are held," he added.
The firm said the biggest impact of Labour's policy might be to deter chief executives and other high net worth individuals from relocating to the UK.
It's unclear how much revenue Labour's policy of abolishing non-dom status would raise. The party claims the sum could be in the hundreds of millions.
Labour was embarrassed today after a video surfaced showing shadow chancellor Ed Balls warning that abolishing non-dom status could "cost Britain money".
Ed Miliband told an audience at the University of Warwick the rule was "arcane" and allowed "a few at the top" to play by a different set of rules. The Labour leader claimed his policy would introduce more "fairness" into the tax system.