It's rare you read a blog that is as good as Alex Hawkes' on the non-doms from which I was distracted by Liechtenstein:
It's getting to the stage where I'm so fed up of non-dom whinging, I might leave the country myself.
Mike Truman has, as ever, an excellent piece on the subject in Taxation this week. In it he talks about the constant moaning of the super-rich about their tax rates, and concludes with the memorable line:
Some non-domiciles have expressed the fear that this may just be the start of a process which will lead to a removal of all their tax privileges; all I can say is that I hope their fears are realised.
Hear, hear.
Read the rest, but I particularly appreciate this which follows Alex's complete rubbishing of a survey on non-doms leaving the UK:
Tax campaigners and others arguing against corporate or personal tax avoidance are frequently vilified, usually in whispered tones, about the lack of rigour to their figures, or for their lack of understanding of the issues behind the numbers.
Can someone explain why this is different, and why it is acceptable to try and influence public debate with dodgy statistics about the number of non-doms about to leave the country? I haven't got a good answer myself.
Alex is right abut the whispering. Those who do it ignore the fact that we also back up our work with arguments, and are a pretty competent lot. That's why those who challenge us whisper, because they daren't tackle us head on.
Perhaps Mike Truman should have the last word on that:
What is not so clear is why the supposedly quality end of the market would fall for the apocalyptic and eschatological predictions of some of the self-interested in the non-domiciled debate.
Let's call it cash Mike. Sordid, but true. However, the truth does come out. It just takes a few brave souls to make sure it does. Alex and Mike are in that club.
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While I don’t want to sound naive, is there any explanation why non doms leaving would be a problem?
It’s not like they’re paying taxes, so the exchequer wouldn’t miss them. There are limits to how much they can inject into the local economy though personal consumption. While some may consider their dizzying wealth makes dour old UK a gayer place, I think most could live as happily without them.
Sadly the article is wrong. The changes will see the following happen. 1. A drain of investment by wealth foreigners in the UK. Why invest in the UK when you can invest outside the UK and not pay tax? This will hit deals like flotations which non-doms will now conduct outside the UK because UK assets are discriminated against. 2. Wealthy non-doms will leave the UK over the next 10 years as their UK commitments wind down, eg: their children finish school, their business deals end. Why stay here? It is too expensive and these are global people with choices. 3. Less talented foreigners will come here as the UK becomes a very expensive place to work and do business. 4. Far fewer US persons will come here as the UK will be a tax death-trap for them. So I see this happening over the next decade with a gradual sickening effect for the economy.
Phil
Not wrong – just in conflcit with your opinion.
That’s quite different.
And can you justify why state aid is needed for all these activities non-doms do? Doesn’t that break the free-enterprise culture you seem to embrace?
Richard
Sadly the article is wrong. The changes will see the following happen. 1. A drain of investment by wealth foreigners in the UK. Why invest in the UK when you can invest outside the UK and not pay tax? This will hit deals like flotations which non-doms will now conduct outside the UK because UK assets are discriminated against. 2. Wealthy non-doms will leave the UK over the next 10 years as their UK commitments wind down, eg: their children finish school, their business deals end. Why stay here? It is too expensive and these are global people with choices.
so why should all people not leave, after all, if it too expensive for non tax payers how are normal people expected to live?
3. Less talented foreigners will come here as the UK becomes a very expensive place to work and do business.
One of the reasons it is expensive, as this blog and others such as prem sikka point out, is that those that benefit most (be they individuals or corporations such as tesco) find it so easy to escape the obligations accepted by the majority of citizens
4. Far fewer US persons will come here as the UK will be a tax death-trap for them. So I see this happening over the next decade with a gradual sickening effect for the economy.
I envy your confident prescience. I can only look back in time and come to the conclusion that the primacy of finance over an economy based around goods and services is the long term problem, not the lack of a healthy influx of ‘talented’ us citizens.
“Far fewer US persons will come here as the UK will be a tax death-trap for them.” I guess they will not be working in the London offices of the Merrill Lynches, Citibanks in future then? Rubbish!
During WW2, the pejorative saying about the Johnny-come-lately US forces was “over-paid, over-sexed and over here”.
I think the man on the Clapham omnibus could accept differential treatment in times of war, but I fail to see why he should accept it in times of peace.