Non-doms face new levy

A flat rate levy on an estimated 120,000 non-domicile individuals is being considered by Chancellor George Osborne.

The Treasury is targeting people who use links abroad to avoid paying taxes.

The government hopes this levy will help them avoid tax rises for middle class families. The Telegraph reported.

In 2007, Osborne called for a levy of £25,000 a year on those who live in this country but do not pay full taxes. Former prime minister Gordon Brown introduced his own flat rate levy of £30,000 a year, but this only applied to people who had lived in the UK for seven years or more. But, according to the Treasury, only one out of five non-doms pay the levy as most of them leave the country before the seven year limit is up.

A Treasury spokesman said the potential levy was “pure speculation”. But the Telegraph quote the Liberal Democrat Treasury spokesman Lord Oakeshott as saying: “It is decision time in the Budget. We must get on top of the £42bn tax gap Labour left us – non-doms paying their fair share instead of an almost free ride would be a great start.”

Prime Minister David Cameron promised over the weekend that there would be no “significant” tax raises.

“It’s no good saying we’re going to cut the deficit by cutting spending, but then we’re going to make things worse again by cutting taxes. I’m afraid it doesn’t add up,” he said.