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Number of non-dom taxpayers rises 7 per cent, contributing £8.9bn to UK income

Jul 9, 2024 | blog

HM Revenue and Customs (HMRC) has launched its newest figures on non-domiciled taxpayers for 2023, revealing a notable improve in each the variety of taxpayers and the income generated.

Key findings from the report embrace:

Increase in Non-Dom Taxpayers: 12,900 non-domiciled taxpayers arrived within the UK throughout the 2023 tax yr, marking an 18% improve in comparison with the earlier yr.
Total Non-Dom Taxpayers: HMRC estimates there at the moment are 74,000 non-domiciled taxpayers within the UK, a 7% rise year-on-year.
Revenue Contribution: Non-domiciled taxpayers contributed £8.9 billion in income, a 6% improve from the earlier yr and the best stage since 2017. This contains an estimated £6.2 billion in earnings tax, £384 million in Capital Gains Tax, and £2.3 billion in National Insurance contributions.

Nicholas Hyett, Investment Manager at Wealth Club, commented on the potential adjustments to non-dom standing: “Non-doms will quickly be extinct within the UK, with the brand new authorities seeking to abolish the tax standing that many rich people use to shelter their worldwide earnings from UK tax. These numbers are subsequently a glimpse into the previous, quickly to be a part of the fossil file.

However, the Labour manifesto promised a strategy of evolution with ‘a modern scheme for people genuinely in the country for a short period’. These numbers present how necessary it’s to get that new regime proper. £8.9 billion of tax income is to not be sniffed at, and whereas taxing the wealthy may increase extra income it additionally runs the danger that the worldwide elite resolve to maneuver their taxable wealth someplace with a lighter contact tax regime.

The authorities’s activity is to ship an financial local weather that’s extra welcoming and ideally a superb deal extra dependable than the British summer time has confirmed this yr. If it will possibly obtain that, it has the potential to attain one of the best of all worlds – a tax regime the place the rich contribute extra, however don’t really feel the necessity to flee overseas to sunnier climes.”

Speaking concerning the knowledge, Anthony Whatling, Managing Director at Alvarez & Marsal Tax, commented: “Today’s figures reveal a slight improve in non-dom numbers, a pattern which is more likely to be short-lived given the Labour Government’s upcoming tax reforms. While it could take two years for these proposals to be mirrored in official statistics, anecdotal proof already suggests a considerable variety of non-doms are significantly contemplating relocating from the UK.

Labour has begun outlining a four-year regime to draw wealth to the UK, however it’s but to be seen whether or not 4 years is ample to genuinely entice entrepreneurs to the UK in comparison with different nations in Europe reminiscent of Italy, Spain and Malta. Consequently, we will anticipate a lower within the variety of non-doms coming to the UK as these adjustments take impact.

It could be misguided to miss the optimistic contributions non-doms could make. Today’s figures present mixed tax and NICs liabilities of £12.3 billion. Allowing non-doms to deliver overseas earnings and features tax-free from 2025 is a welcome change that ought to decrease funding limitations; nevertheless, at this time’s figures gained’t seize this potential, leaving us to take a position on the true influence.”

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