“Their arguments about the potential loss of revenue have not been well received, especially given the current economic climate,” the insider added.
Foreign Investors for Britain, however, remains undeterred. It is planning to commission further research and continue its lobbying efforts in the hope of influencing the final decisions on the tax regime for wealthy foreigners. The group believes that its proposals are not only fair but also necessary to ensure that the UK remains an attractive destination for high-net-worth individuals.
As the debate over the taxation of non-doms in the UK continues, the outcome remains uncertain. But one thing is clear: the efforts of groups like Foreign Investors for Britain are shaping the conversation and influencing the decisions that will ultimately determine the future of the UK’s tax regime for wealthy foreigners.
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The second phase of the OE report, which was released last week, revealed that the 95 non-dom respondents paid an average of £800,000 in UK VAT during the 2023-24 tax year, and an average of £890,000 in UK stamp duty over the past five years. Wealthier non-doms contributed significantly more to these taxes, and the respondents indicated that they were already divesting from UK assets and pausing their investment and philanthropic activities due to concerns about potential tax increases.
Foreign Investors for Britain is scheduled to have a call with Varun Chandra, who is Sir Keir Starmer’s business adviser, this week to discuss the matter further. The organization is also keeping the Treasury informed about any additional data and research findings.
This week, OE plans to release the third phase of its research, focusing on the potential fiscal impact of a tiered tax system. A recent report from the free-market Adam Smith Institute proposed the introduction of an annual flat fee of £150,000 for non-doms, valid for 15 years, which it estimated could generate a minimum of £12.45 billion in direct revenue annually.
“This issue doesn’t just affect the wealthy,” stated MacLeod-Miller. “The funds collected will be directed towards essential services like schools and hospitals.”
However, time is running out for Foreign Investors for Britain’s lobbying efforts. With the Budget looming in less than two weeks, the most they can hope for realistically is for Labour to remove the inheritance tax component of its non-dom reforms temporarily while alternative proposals, such as a tiered tax system, are considered for implementation in the future.
“The government’s best course of action on Budget day would be to provide reassurance and prevent an exodus,” suggested Lawrance at Charles Russell Speechlys. “However, they currently lack the necessary data to make a definitive decision on the tiered tax system. They simply haven’t had enough time to fully evaluate the implications yet.”