Moore Stephens: '26% of non-doms could leave UK'
Moore Stephens has revealed that the UK’s increasingly tough tax regime is having a huge impact on the non-domiciles
The government has been cracking down on non-domiciled individuals with stricter taxing regulations, Moore Stephens has recently reported.
In 2018, non-doms tax receipts are now at their highest level for the past decade, and tax regulations has been given as the most common reason for dissatisfaction within the sector. With such extreme changes, the percentage of non-domiciled individuals planning on leaving the UK in the next 12 months is now listed at 26%.
In recent years, the UK has introduced several new taxation rules that have solidified the government’s strict stance.
For example, the ‘failure to correct’ legislation which has allowed for heavy new penalties (some up to 200% of the tax owed) for non-compliance around offshore assets. As well as this, there is a £60,000 annual charge for non-doms who pay tax who have been a resident in the UK for more than 12 out of the last 14 years and have been paying tax on a remittance basis. Finally, the government has restricted remittance basis to non-doms who have had residency in the UK for 15 or fewer of the last 20 years. Those who are considered ‘longer- term’ non-doms must now pay the UK income tax rate for their entire worldwide income.
All of these changes have directly led to more non-domiciled individuals considering leaving the UK in the short-term.
According to Moore Stephens, “this risks triggering a significant hit to tax receipts – non-doms paid £9.4bn in income tax, capital gains tax and national insurance contributions in 2016-17. This is the highest level since 2007-08, and more than the entire total raised through inheritance tax, tobacco duties or customs duties over the same period.”
Simon Baylis, partner and head of private client services at Moore Stephens, concluded: “As non-doms have the ability to leave the country at very short notice, the government must be alive to the risk of losing them and the income they provide to the UK.
“Non-doms make an enormous contribution to the Treasury through the tax they pay directly. On top of that, the impact they make indirectly through their businesses, investments, and job creation is also very substantial.
“Non-doms understand the role they have to play in being responsible taxpayers, and the statistics show that they more than do that. It’s important that the government does not go too far and treat them as unwelcome guests.”