If the Government enacts its plans to abolish non-dom tax status, this could cost the UK £6.5 billion by 2035, and 23,000 jobs by 2030;This will be due to lower investment in capital, a drop in tax revenue, reduced consumption across the economy, and a corresponding loss of jobs;These figures are drawn from new research by the Adam Smith Institute, a leading economic think tank, which assessed the potential economic impact of just 5,800 of the 21,100 remittance basis non-doms exiting the country;Non-doms are expected to leave for a number of reasons, including the abolition of their current tax status, increased taxes on High Net Worth Individuals (HNWIs), the UK’s poor economic outlook, and hostility towards wealth-creators;It is in Britain’s interest to attract and retain as many non-doms as possible, given that the contribute billions each year through taxes and economic activity;However, the UK’s current offering to HNWIs is uncompetitive, especially when compared to European rivals such as Switzerland, Spain and Italy;This paper proposes an Italian-style annual flat fee of £150,000 for highly mobile wealthy individuals who are resident, but not domiciled, in the UK. If all current non-doms were willing and able to afford this fee, this could raise £12.45 billion a year in tax revenue, while attracting more non-doms to our shores;Former Chancellor of the Exchequer Nadhim Zahawi calls on the Chancellor to heed these warnings, and consider the Adam Smith Institute proposals to prevent an exodus of High Net Worth Individuals from the UK, and to boost revenue and investment in the UK.
Authors
- Pages
- 32
- Published in
- United Kingdom
Table of Contents
- Mitchell Palmer 2
- Maxwell Marlow 2
- The views expressed in this report are those of the authors and do not necessarily reflect any views held by the publisher or copyright owner. They are published as a contribution to public debate. 2
- Copyright Adam Smith Research Trust 2024. Some rights reserved. 2
- Published in the UK by ASI Research Ltd. 2
- 23 Great Smith Street London SW1P 3DJ 02072224995 infoadamsmith.org 2
- Executive Summary 3
- Introduction 4
- What is a non-dom 6
- WHAT IS TURNING NON-DOMS AWAY 8
- FTSE vs. Global Markets 2007 Peak 2013 2023 FTSE 100 GBP 6457 6749 7733 FTSE 100 - adj to USD 12783 11203 9821 MSCI world development index USD 1587 1640 3169 SP 500 USD 1447 1810 4745 9
- Economic Impact 17
- The result is a smaller economy in the long run. 18
- This analysis is based on a variety of public data. 19
- Impacts on consumption employment and investment are based on ONS data and a relatively old estimate of investor home bias and the savings rate. 21
- Assumptions and limitations of our modelling 21
- Dynamic Modelling 23
- Our Non-Dom Regime Competition 25
- Switzerland 25
- Italy 26
- Spain 28
- Our Recommendation 30
- Conclusion 32
