It’s little wonder that non-doms attract so much scorn. Allowing those who have the greatest means to declare themselves as having a permanent home outside the UK and pay lower taxes as a result is an obvious recipe for outrage.
Labour's Ed Miliband pledged to ban the status if he won this year’s election. He lost, but a less likely reformer, George Osborne, announced plans to get rid of it for long-term residents in his Summer Budget. That helps the chancellor in his mission to recast himself as a man of the people, but is tripping up non-doms in the best interest of the economy?
According to figures published by law firm Pinsent Masons this morning, the UK's 114,300 non-doms paid £6.6bn in income tax in 2013/14, up 7% from the year before. That's a lot of cash per head, but does only represent about 2.4% of the total HMRC raises from personal taxes.
But combined with ‘significant amounts’ of capital gains and value added taxes and £223m in remittance-based charges, they ‘contribute a far greater amount to the UK Exchequer than many realize,’ says Pinsent Masons’ head of tax Fiona Fernie.
‘Changes announced in the Budget have led many non-doms to re-assess their position - a large proportion are internationally mobile and will not hesitate to re-locate if a better deal can be found elsewhere,’ she warned. ‘Any mass exodus of non-doms would be a substantial hit to the UK economy.’
That might be true, but hostility to non-doms isn’t motivated by facts and figures. A sense that the ordinary person is being ripped off by the rich means that no amount of statistics is likely to make the debate about 'tax dodging' go away.