Chancellor Rachel Reeves is facing pressure from lobbyists representing the UK’s 74,000 non-domiciled residents (non-doms) to scale back her planned tax changes, ahead of her upcoming budget.
The newly formed group, Foreign Investors for Britain, is set to meet with government officials this week to urge a reconsideration of Reeves’s proposed overhaul of the non-dom tax regime, which could include levying inheritance tax on foreign assets.
Non-doms, who are UK residents but are considered domiciled overseas for tax purposes, are currently exempt from paying UK taxes on their overseas income. However, Reeves’s proposed changes have sparked fears that wealthy non-doms will leave the UK, potentially causing a net loss in tax revenues rather than boosting the Exchequer. In 2022-23, non-doms contributed £8.9 billion to UK tax revenues.
The lobby group, which formed in June and has already met with Treasury officials, is proposing an alternative tiered tax system. This would see non-doms paying a fixed annual sum, scaled to their wealth, for a period of 15 years. Under the plan, someone with up to £100 million in personal wealth would pay an annual charge of £200,000, with those worth more than £500 million contributing £2 million annually. Currently, non-doms pay up to £60,000 a year.
Leslie MacLeod-Miller, a spokesperson for Foreign Investors for Britain, said: “We’re pleased the government is listening because this is a real issue. Britain is turning into a departure lounge, and without changes, we risk losing valuable investment and tax revenue.”
The government has so far defended the proposed changes. A Treasury spokesman said: “We are addressing unfairness in the tax system to raise revenue for rebuilding public services. The outdated non-dom tax regime will be replaced with a new residence-based regime focused on attracting the best talent and investment to the UK.”
The non-dom debate comes amid broader concerns about Reeves’s first budget, which is expected to include significant tax reforms as Labour seeks to rebuild the nation’s finances.
Jamie Young
Jamie is a seasoned business journalist and Senior Reporter at Business Matters, bringing over a decade of experience in UK SME business reporting.
Jamie holds a degree in Business Administration and regularly participates in industry conferences and workshops to stay at the forefront of emerging trends.
When not reporting on the latest business developments, Jamie is passionate about mentoring up-and-coming journalists and entrepreneurs, sharing their wealth of knowledge to inspire the next generation of business leaders.
