A new study claims Rachel Reeve’s crackdown on the non-dom super rich living in the UK could cost the Treasury billions if millionaires seek to flee Britain. The Telegraph reports the Exchequer could lose £12.2 billion in tax revenue over the course of this parliament, according to new research from the Centre for Economics and Business Research (CEBR).
A so-called “non-dom” is the term used to describe a person whose permanent residence, or domicile, is outside the UK. A non-dom previously only paid UK tax on money earned in Britain; they did not have to pay the UK government tax on money they made elsewhere in the world, unless that money went into a UK bank account. Non-dom refers to a person’s tax status, it does not describe their nationality, citizenship or resident status.
The Chancellor has torn up this previous tax arrangement, meaning that now all UK residents will be taxed in Britain on their worldwide income and gains.
The PM and Chancellor have not had an easy ride with the economy (Image: PA )
It’s reported a number of very rich individuals have already ceased living in the UK as a result of the new Labour rules. Billioniare property investors Ian and Richard Livingstone reportedly recently switched their main country of residence from the UK to Monaco, according to Companies House. Richard Gnodde, the vice chairman of Goldman Sachs in Europe has also relocated from London to Milan, an Italian city which offers tax breaks to the wealthy.
And the Adam Smith Institute said the UK lost 10,800 millionaires to overseas countries in 2024, double the number in 2023.
Sam Miley, an economist at the CEBR, told the Telegraph: “Our research highlights that the Treasury’s finances will be highly dependent upon the behaviour of former non-domiciled people. If a quarter of this group were to leave the UK in response to recent reforms, we predict that the Treasury will begin to make a loss.
“This loss could escalate into the billions if a larger share left. For every non-dom deciding to relocate, the Treasury will not only lose the tax revenue from their income and gains, but also from their day-to-day activities, with non-doms typically being high spenders as well as high earners.”
Labour are waging war on so-called ‘non-doms’ in the UK (Image: Getty )
Andrew Griffith, the shadow business secretary, said: “Investors and wealth creators leaving the UK for brighter shores is nothing short of disastrous for our economy. It also means we will all have to pay higher taxes to make up the shortfall.”
A Treasury spokesman said: “We do not recognise these figures. The independent OBR has confirmed that the changes to the regime will raise £33.8bn over the next five years.
“Replacing the outdated non-dom tax regime with a new internationally competitive residence-based system addresses unfairness in our tax system, attracts the best talent and investment to the UK, and ensures everyone who is a long-term resident in the UK pays their taxes here.”
