UK Income Tax Paid By Non-Doms Hits Record High

By ExpatBriefing.com Editorial 02 May, 2014

Newly released figures show that the amount of UK income tax paid by "non-doms" has risen by 8 percent, to hit a record high of GBP6.8bn (USD11.4bn).

The data relates to the 2011-12 tax year, the latest for which the information is available. The revenue collected stood at just GBP5.7bn in 2008-09, reaching GBP6.2bn in 2009-10 and GBP6.3bn in 2010-11.

According to Jason Collins, Head of Tax at Pinsent Masons, negative portrayals of non-domiciled individuals are inaccurate. Commenting on the figures, he pointed out the amount non-doms pay in income tax has gone up by 19 percent in the last three years alone, making them "more important to the UK economy than ever." They also have "huge spending power, invest in UK businesses and create thousands of jobs in the UK."

Collins believes that "following the credit crunch and the collapse in Government revenues non-doms were seen as a handy scapegoat. Actually they have been major contributors to the public purse all the way through the recession."

According to Collins, the high level of income tax paid also illustrates one of the advantages of the UK's investor visa regime. It allows a High Net Worth individual, with at least GBP1m to invest in the UK, enter the country, and remain there for three years.

Non-doms can choose not to pay tax to the UK Government on income and capital gains that are based outside the UK, so long as they do not bring that income into the country. They are obliged to pay tax on any income generated in the UK.

The non-dom levy introduced in 2008, and amended last year, requires those who have been resident in the UK for more than ten years to pay an annual charge of GBP50,000 (USD84,093) if they intend to continue to exclude earnings made outside of the UK from their UK income tax bill.

The levy has raised GBP178m to date. This is just 2.6 percent of the total UK income tax bill footed by non-doms.

Tags: Individuals | Capital Gains Tax (CGT) | Compliance | Tax | Business | Tax Compliance | United Kingdom | Tax Authority | Tax Rates | HM Revenue And Customs (HMRC) | Revenue Statistics | HM Revenue And Customs (HMRC) | Individual Income Tax | Expats | Tax |

 





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