Govt moves to calm fears of non-doms – more sucking up to the super-rich from Labour

After Lord Bigby’s intervention in the debate, and much panic on the pages of the FT, here’s the U-turn:

The Treasury has been accused of climbing down over its plans to tax wealthy foreigners living in the UK, after it moved to clarify its position.The government aims to target non-domiciled foreigners who live in the UK but say their real home or “domicile” is elsewhere.

At present, these “non-doms” pay no tax in the UK on their overseas earnings.

The Treasury wants them to pay £30,000 a year, but now says it will not need full earnings details or back payments.


Treasury Chief Secretary Yvette Cooper made the clarification in an interview with the BBC.

We don’t need to know the detail of people’s worldwide income if they are going to be paying the £30,000
Treasury Chief Secretary Yvette Cooper

She admitted that there had been “misunderstandings” over the government’s plans, because of the wording in the draft legislation document drawn up by officials.

Ms Cooper insisted there had never been any plans to “snoop” on the global earnings of wealthy foreigners living in the UK, nor to seek payment of taxes for previous years.

Under the government’s plans, wealthy non-doms will be eligible to pay a flat £30,000 in tax a year – once they have lived in the UK for seven years – or else sign up to the existing British tax structure.

“We don’t need to know the detail of people’s worldwide income if they are going to be paying the £30,000,” said Ms Cooper.

‘Common sense’

Shadow chancellor George Osborne said the Treasury’s clarifications amounted to a “climb-down” by Chancellor Alistair Darling.

The Treasury had faced mounting criticism over its non-doms tax plans, including from one of its own ministers, Trade and Industry Minister Lord Jones.

CBI deputy director general John Cridland, said the Treasury’s clarification was “a victory for common sense”.

“The proposals were clearly cobbled together in a hurry and went a lot further

than the 230,000 headline figure, with the clauses on trusts and the retroactive aspects for taxing gains particularly punitive.

“It was not just a tax on the ‘super-rich’ but affected tens of thousands of accountants, lawyers and managers who work hard in the UK and help generate huge amounts of wealth for the economy and the Treasury.”


2 Responses to “Govt moves to calm fears of non-doms – more sucking up to the super-rich from Labour”

  1. DA Says:

    I’m an American who has lived and worked in England for eleven years. Actually I work two jobs, full time in banking and part time as a University lecturer, tutoring finance Masters degree students.

    I pay higher rate taxes on both paycheques, full NHS (in spite of having private insurance) and my Indefinite Leave to Remain is clearly stamped “no recourse to public funds”, which means I can’t go on the dole or ask for council accommodation.

    And that’s ok. After I – and many like me – didn’t come here then DEMAND a flat with full benefits like the economic refugees we’re all familiar with.

    From my back of the envelope calculation, I fully support – via taxes paid on money earned here in England – three economic refugees.

    But now I shift that burden to you folks. I’ve quit my job effective March 31st, and I’m outta here.

    So buckle up and pay up. Someone else will now pay to support what previously were MY economic refugees.

    And what’s even scarier? I’m effectively a middle wage earner, and there are LOTS more like me who either have already left or are in the process of leaviing.

    This poorly planned, ineptly executed move will achieve nothing except markedly raise taxes for those of you who still reside – and work – in England.

  2. charliemarks Says:

    I have to say, I am not familiar with the term “economic refugee” and have never met anyone who can to live in England because they wanted a flat and full benefits… Perhaps this is an impression gained from the tabloids more than a common occurance?

    Naturally, hard working individuals like yourself who hail from overseas should not pay more taxes on earnings here because of your nationality – nor should you be denied access to social housing, unemployment benefits, or the National Health Service.

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