Tax from non-doms falls by £2bn as wealthy f lee over Corbyn fears

THE number of non-domiciled taxpayers has dropped to a record low as the super-rich leave the UK.

Some 78,000 had the tax status at the end of April last year, down 13 per cent from 2017.

Those who have left – many said to be fearful of a Jeremy Corbyn government or a No Deal Brexit – have cost the country £2billion in lost tax revenue.

The status recognises the fact their permanent home – or domicile – is abroad.

A domicile is usually the country which the taxpayer’s father considered his home when he or she was born, meaning the status can be inherited. It is possible to become a non-dom by moving abroad, if there is no intention of returning.

Non-doms do not pay UK tax on money earned abroad, as long as they do not bring it onshore – potentially saving them millions of pounds a year.

They can work in the UK and spend time here without paying the same taxes as everyone else.

HM Revenue and Customs statistics show that non-doms fell to a record low of 78,300 in 2017-18, down from 90,500 the year before. Tax from non-doms fell 21 per cent to £7.5billion, from £9.5billion over the same period the year before.

Josie Hills, of law firm Pinsent Masons, said: ‘Brexit uncertainty is driving out many of the wealthiest non-doms who are not prepared to hang around to find out the outcome.

‘The prospect of a Labour government is also very unappealing for high net worth people – talk of monetary controls and wealth taxes are not well received.

‘Given that there could be a general election in the near future, many will not be willing to take the risk that this becomes a reality.’

She said that non-doms had made a ‘huge contribution to HM Treasury’s coffers’ – £45billion in tax over the last five years and warned: ‘The impacts of falling tax receipts from non-doms may only be felt once it’s too late.’

But the drop could also be because of new rules, which can draw non-doms fully into the UK tax net if simple conditions are met, Mrs Hills added.