Non-doms’ tax bill to rise as charges go up
NON-DOMICILED UK residents paid £178m in tax in the last full financial year, according to new figures from Vestra Wealth.
The bill for the tax year to April 2012 was up £10m on the previous 12-month period.
The residents pay the taxman a fee of £30,000 per year in exchange for their overseas earnings being exempted from British taxes.
And that fee is set to rise to £50,000 for the following tax year, ending in April 2013.
However, analysts believe the higher levy will still not persuade large numbers of the non-doms to leave Britain, as the levy is below the level of tax they would otherwise expect to pay.
In addition, the fee is very transparent as a flat charge on residency.
“Most clients see it as a ‘rent’ for the privilege of being in the UK but, given the other advantages of residence, a price generally worth paying,” said Vestra’s Jenny Tozer.
“The UK is still hugely attractive for inward investment. The question is whether the higher levy will make the UK less appealing.”
She expects international competition will help the UK hold on to the global rich who make use of the status and its exemptions – property taxes in France, Spain and Italy are all higher than Britain’s charges.
“Many non-doms are entrepreneurs. Allowing them to bring in money to fund businesses and create jobs is a very pro-business policy,” Tozer said.
“This has undoubtedly persuaded many of the value of the UK as a base.”