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Thursday
Aug052010

The Levy on Non Doms Leads to More Leaving the Country

When Labour introduced the levy on non doms – a £30,000 charge for the tax year that enabled them to dodge any taxes they would have paid on earnings from abroad – there were mixed feelings about whether it would work or not.

The idea was obviously to ensure that a certain sum of money was earned from the non doms, while keeping them free of the taxes on those earnings.  But instead of receiving the payment they expected, only around a fifth of those who were eligible to pay it actually did.

What I find more interesting in this situation is the fact that a significant number of non doms decided not to pay the levy and not to pay taxes here either.  Instead they left the UK and opted to live in popular tax havens abroad instead.  A typical example was Switzerland.

I am not surprised this was the case, as there was every chance of some non doms leaving to avoid the levy altogether.  Many people do not like the fact that the government is essentially making it impossible for them to stay and invest in the UK.  Some of those who did leave have mentioned they felt ‘unwelcome’.  With this kind of feedback I hope the present government does something more positive to tackle the problem.

Many non doms own businesses that are playing a key role in helping the UK to recover from the recession.  If they go abroad they may no longer invest in businesses and opportunities in the UK.  Thus this is a key battle that the government needs to find a solution for.

Whether you have non dom status or not, you can consult us here at St Matthew for advice on all matters pertaining to taxation.

 



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