Non-doms contributed nearly £9bn to the exchequer through tax and national insurance contributions (NICs) in the 2022/23 tax year, the highest amount since new rules around the regime were brought in in 2017.
Data from HMRC released on Tuesday showed the amount of income tax, capital gains tax and NICs paid by the controversial class of resident rose by £474m in the previous year, meaning the average non-dom paid over £120,000 in tax.
The budget for the Department of Health and Social Care (the government department responsible for looking after the NHS) in the 2022/23 tax year was £182bn, suggesting the total non-dom tax take in the year was enough to fund spending on the public health service for 18 days.
The numbers are for the year ended 6 April 2023. Therefore, they do not include any fallout from either party’s moves to abolish the policy.
They also showed that the number of non-dom taxpayers increased by seven per cent.
Nom-dom numbers grow
HMRC said there were roughly 74,000 non-doms in the UK at the end of the 2023 tax year.
Since then, both the Conservatives and Labour have pledged to clamp down on the 200-year-old regime, which allows wealthy foreign nationals to move to the UK without paying tax on overseas income or capital gains on international assets.
In March, then-Chancellor Jeremy Hunt pledged to abolish the regime despite Rishi Sunak’s wife, Akshata Murty, having previously held the status. Still, he allowed people with the status to continue to avoid inheritance tax on assets held in a foreign trust.
Reeves and Labour have pledged to tighten up that ‘loophole’, prompting some wealth advisors to warn that up to a third of non-doms could leave the UK to flee the curbs.
Tax changes coming
Nicholas Hyett, investment manager at Wealth Club, said: “Non-doms will soon be extinct in the UK… and these numbers are a glimpse into the past.
“However, the Labour manifesto promised a process of evolution with a ‘modern scheme for people genuinely the country for a short period’. These numbers show how important it is to get that new regime right. £8.9bn of tax revenue is not to be sniffed at
“Taxing the rich runs the risk that the global elite decide to move their taxable wealth somewhere with a lighter touch tax regime.”
Others argued the numbers from HMRC showed the need for reform to the regime.
Rachael Henry of Tax Justice UK, a pressure group that advocates for a “fair and effective” tax system, said: “It is only fair and right that those choosing to make their lives in the UK, benefiting from shared services, infrastructure and opportunity, pay their fair share.”
The non-dom status’s origins date back to the Napoleonic wars, when the UK government conceded it would be impractical to charge tax on produce on ships bought and sold abroad.