I welcome this debate. It is an important contribution to the Government’s commitment to fairness in the tax treatment of non-domiciles. I hope that I have made clear the importance of the current non-domicile tax regime for the UK economy.
Businesses see it as playing an important role in ensuring that the UK attracts skilled people from abroad to work, do business and invest. We would place ourselves at a significant competitive disadvantage if we simply scrapped the remittance basis at a time when countries with low tax regimes are competing to attract talent and investment-that would be an own goal.
Of course, it should not be forgotten that non-domiciles still contribute a significant amount of tax-it is estimated at £4 billion a year-to the Exchequer.
That was Labour’s Stephen Timms, then financial secretary to the Treasury, responding to questions from Norman Baker
I think the BBC was caught on the hop this morning as on the day of the much heralded Miliband announcement of the abolishment of Non-Dom status it turns out Balls had recently declared this would cost Britain money not make it money.
The BBC journo’s were so shocked that their natural journalistic instincts won over their usual carefully measured bias and the truth came tumbling out…well, a couple of them allowed themselves to dish the dirt.
The usually pro-Miliband Jon Pienaar told us that this was ‘The mother and father of all banana skins’ and Norman Smith, he of the ‘utterly terrifying’ prediction on Tory plans, said that Labour’s own plans had all gone ‘pear-shaped’….a corker of a story!
https://www.youtube.com/watch?v=h9JTMO0DZiM
The ‘BBC’ itself headlined with this all day despite the Balls revelation coming very early in the day….
Election 2015: Labour would scrap ‘non-dom’ tax status
If the Tories had made the same cock-up the headlines would have instantly been ‘Tory Policy chaos’ or ‘Tory Shambles’….the BBC’s reticence is all the more remarkable when Norman Smith tells us that Miliband’s Non-Dom policy was ‘the party’s most significant announcement of the campaign so far. ‘
Only at about 17:00 did the headline reflect the new situation…
Labour defends plans to scrap ‘non-dom’ tax status
…but even then the report attached hardly changed merely adding this…
Labour has defended its plans to end the non-domicile rule that allows some wealthy UK residents to limit the tax paid on earnings outside the country.
What is even more surprising, or not, is that two other of the BBC’s ‘star’ economics correspondents both fail to mention Balls’ earlier comments about the dangers of abolishing Non-Dom status when they are ‘analysing’ Miliband’s grand plan…..
Here’s Peston…
Are non-doms bad for UK?
And then there’s this curiously titled piece from Nick Robinson….
Election 2015: Non-doms – whose side are you on?
Strangely Peston also quotes Duncan Bannatyne…..
Strikingly the Dragons Den entrepreneur Duncan Bannatyne has argued that non-doms have an unfair cost advantage over other UK based business people.
But Non-Doms do get taxed on any income they make in the UK and if they bring money in from abroad to the UK that is also taxed….so they get no advantage.
What does Bannatyne think of foreign companies who get state aid to encourage them to set up in the UK and bring jobs here?
What benefits do Enterprise Zones offer for businesses?
Businesses basing themselves on Enterprise Zones can access a number of benefits:
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Up to 100% business rate discount worth up to £275,000 per business over a 5 year period
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Simplified local authority planning, for example, through Local Development Orders that grant automatic planning permission for certain development (such as new industrial buildings or changing how existing buildings are used) within specified areas
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Government support to ensure that superfast broadband is rolled out throughout the zone, and, if necessary, public funding
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100% enhanced capital allowances (tax relief) to businesses making large investments in plant and machinery on 8 Zones in Assisted Areas
The BBC doesn’t really ‘fisk’ Miliband’s plans…..for instance where do they mention any other tax breaks such as those on offer in Enterprise Zones, or the double taxation jeopardy of the Dual Residents who don’t get taxed on foreign income if they are taxed on income earned abroad by the country they make that money in….. most Non-Doms will also get taxed on the income they make in other countries….so Miliband is threatening to tax them twice…or sabre-rattling for Public consumption when he knows full well that this is all headline grabbing nonsense from him.
The BBC doesn’t ask the difficult questions about the Labour claim that their policy has been audited by an ‘independent’ tax expert who confirms they may make up to a billion pounds from the policy….the BBC is not so keen to tell us that the IFS, an organisation the BBC usually quotes with allacrity when it criticises the Tories, said this……
It’s very difficult to say how much if any revenue Labour’s policy would raise.
“That’s partly because they haven’t yet given us the full details of the policy, it’s partly because there is a lot about these non-doms that we don’t know… and what’s hardest of all is to guess at how these people would respond to higher tax charges.”
Nor do they tell us that that ‘independent’ expert, Jolyon Maugham QC, is in fact a Labour Party member who promotes them and their policies enthusiastically.
Here’s what the Tax Journal says….and look who stands out as the only one who supports the policy…
The move has been greeted with concern from some professionals. ‘It is a gamble in both a financial and a political sense,’ warned BKL Tax.
Blick Rothenberg partner Nimesh Shah agreed, saying: ‘The government needs to be mindful of the fact that non-doms and their businesses are internationally mobile by their very nature, and could decide to base themselves elsewhere.
Mark Pearce, tax partner at Thomas Eggar, said: ‘Simply abolishing the non-dom rule would be a disaster for the UK economy, as it would inevitably lead to a mass exodus of wealth and talent from the UK.’ He added: ‘Politicians are making sensationalist comments for column inches without giving true thought to the consequences of their stated position.
However, tax barrister Jolyon Maugham QC argued on his blog that the non-dom rule is ‘an unsightly bribe to those with some foreign connection to come to or remain in the UK’.
Here’s the Telegraph…
Ed Miliband’s non-dom crackdown is ‘cataclysmic’
Tens of thousands of entrepreneurs and business leaders will leave Britain because of Labour’s “cataclysmic” plans to scrap the “non-dom” tax status, experts have warned.
Leading tax barristers warned that 30,000 of Britain’s 115,000 foreign investors could leave Britain in the wake of Ed Miliband’s announcement that a Labour government would abolish the tax rules surrounding non-doms.
Mr Miliband claimed that the party will raise “at least” hundreds of millions by abolishing the rules, which he described as “the right thing to do”.
But private banks, accountants, financial advisers and even the ‘independent expert’ who instructed Labour on the policy cast doubt on the Labour leader’s assertions.
They pointed to official figures showing that non-doms pay £8.2billion in tax – as much as 10 million low-income workers.
And where is the exploration of the lie from Ed Balls about the Tories?