New Data Reveals Super-Wealthy Non-Dom Taxpayers Thrived Under Sunak As Chancellor | United Kingdom | New

Rishi Sunak ‘loses the campaign’, says Michael Portillo

The number of individuals in the UK under the non-domiciled taxpayer scheme – under which a UK resident does not have to pay UK tax on income and capital gains earned overseas – was 68,300 in the tax year ending in 2021, according to new data published by HMRC. This is down from 76,500 the previous year, likely due to the pandemic hampering new arrivals. Despite the drop, the amount the group as a whole owed in tax remained stable at just under £7.9billion, suggesting they defied the pandemic economic downturn and increased their revenue.

Residency requirements are determined by the time a person spends in the UK in a tax year, automatic if this exceeds six months.

Most residents pay UK tax on all their income, whether it is domestic or overseas.

But special rules apply to residents whose domicile – either their permanent residence or their country of origin – is overseas, exempting them from paying UK tax on overseas income.

This way, non-dom residents can enjoy all the benefits of living in the UK while avoiding taxation on their investments by locating them overseas.

Andy Summers, Associate Professor in the LSE Law Department, said: “The non-dom scheme is used mainly by the very wealthy, who benefit from tax breaks not available to ordinary taxpayers.

“This giveaway could cost the treasury significant revenue and deserves further consideration at a time when everyone is facing tax hikes.”

Income of non-domiciled taxpayers increased under Chancellor Sunak (Image: GETTY)

In the tax year ending April 2021, HMRC reported that 68,300 people claimed non-domiciled taxpayer status on their self-assessment returns.

This is down significantly from 76,500 the previous year, likely due to fewer non-domiciled taxpayers relocating to the UK due to the disruption to international travel caused by the pandemic.

It is estimated that the band as a whole were liable to pay £7.9billion in income tax, capital gains tax and national insurance contributions for their work in the UK in the during the tax year.

Despite the lower number of taxpayers not domiciled in the country, this total tax bill is slightly higher than that for the tax year ending in 2020, suggesting that the wealthiest have stayed and prospered.

READ MORE: Backlash as Brexit blamers shut down over Dover delays

Exterior view of HMRC

Provisions for non-domiciled taxpayers cost the Treasury billions each year (Image: GETTY)

According to a recent study by LSE and University of Warwick.

Analyzing the anonymous tax returns of all claimants between 1997 and 2018, the study found that 20% of the highest-earning bankers had already benefited from this program, as did 40% in the oil industry and 25% in the ‘automobile industry.

London is home to 58% of the non-UK resident taxpayer population, which accounts for 72% of their total tax contribution.

More than 93% were born abroad, with just under 15% coming from India and almost as many from the United States.

DO NOT MISS :
POLL: Should the UK host the Eurovision Song Contest? [POLL]Joe Biden said to ‘resign and take Kamala with you’ [BREAKING]John Cleese leaves BBC interview after series of questions [INSIGHT]Energy bill update shows how you’ll receive £400 paid support [REVEAL]

Roman Abramovich's superyacht in Barcelona

The yacht of former non-domiciled resident Roman Abramovich in the port of Barcelona (Image: GETTY)

Many high-profile figures in the UK are said to have claimed non-dom status in the past, including Lord Ashcroft, former Vice-Chairman of the Conservative Party, Lord Rothermere, owner of the Daily Mail, and Roman Abramovich, former sanctioned owner of the Chelsea Football Club. .

In April, it emerged that then-Chancellor Rishi Sunak’s wife, Akshata Murty, was claiming non-domiciled status.

Ms Murty had a 0.9% stake in Indian digital services company Infosys, founded by her billionaire father, earning her around £50m in dividends since 2015.

Without non-dom status, Ms Murty would have been liable to pay up to £20million in UK tax.

Mr Sunak reportedly declared his wife’s status to the Cabinet Office when he joined the government in 2018 and transferred his shares in the couple’s joint investment company to her before entering Parliament in 2015.

Ms Murty gave up her status in the wake of the ensuing political storm, with many criticizing the chancellor for overseeing historic increases in the tax burden on British households, with his wife saving millions through the scheme.

The non-dom tax exemption is as old as the income tax itself, and its pProponents argue that wealthy non-domiciled taxpayers contribute indirectly to the public purse by spending huge sums on service providers and paying VAT on luxury goods.

However, the political will to scrap the program has grown in recent years, as many from John Major to Ed Miliband have pushed for revisions.

The 2017 reforms ended permanent non-dom status by imposing UK tax rates on all worldwide income for anyone who has been in the country for 15 of the last 20 years.

According to HMRC data, 10,100 formerly non-domiciled taxpayers were subsequently deemed to be domiciled in the UK in the tax year ending 2021.

The amount of income tax, capital gains tax and national insurance contributions payable by taxpayers claiming deemed domicile status was £3.4billion, far exceeding the estimated £2billion lost by those who chose to leave the country as a result of the reforms.

About Terry Simmons

Check Also

Elon Musk: Tesla sold its bitcoin because of the COVID containment in China

During today’s Tesla earnings call, Tesla CEO Elon Musk explained the company’s reason sale of …