Labour’s non-dom plans put wealthy off UK

LABOUR’S plans for a £2bn tax raid on non-doms are already putting off wealthy foreigners from coming to Britain, international lawyers warn.

Tax lawyers working with billionaires and multimillionaires have already noticed a “substantial” drop in interest from overseas clients in coming to the UK, according to Withers.

Labour has long warned that it plans to change the scheme, which allows foreigners to live in the UK without paying tax on their overseas income for up to 15 years. The party, which is 20 points ahead in the polls, initially said it would abolish the non-dom tax status. However, shadow business secretary Jonathan Reynolds earlier this week instead suggested Labour would “modernise” it and make it less generous.

Ceri Vokes, a private client and tax partner at Withers, said: “I have probably 60pc to 70pc fewer clients looking to move to the UK than I would normally have at this time of year. It is a substantial drop.”

Clients who had considered coming are instead looking to destinations such as Jersey, Guernsey and the Isle of Man. Switzerland, Italy and Dubai also tend to be top contenders, she said.

Italy has a simpler system than the UK where wealthy foreign nationals can pay a flat fee of €100,000 (£85,500) a year on their foreign source of income.

Ms Vokes said: “There is not a huge amount we can say in terms of what the new regime might look like. But it is uppermost in clients’ minds when thinking of staying or leaving the UK.”

Some 68,800 taxpayers were classed as non-doms in 2022, according to figures from HM Revenue and Customs.