The Chancellor Rachel Reeves was hoping to rake in up to £1billion a year for extra NHS appointments and public services by closing loopholes in the system at next month’s Budget
Rachel Reeves could reconsider her plans to raid the non-dom tax perks enjoyed by the super-wealthy.
The Chancellor was hoping to rake in up to £1billion a year for public services by closing loopholes in the system at next month’s Budget. But concerns have been raised that it may raise no money if wealthy individuals decide to leave the UK – rather than pay tax on their overseas income.
In a U-turn earlier this year the Tories announced they would axe the non-dom tax status once enjoyed by ex-PM Rishi Sunak’s wife, Akshata Murty. But Labour said the Conservatives’ plans were riddled with “loopholes”.
Labour’s manifesto promised to “abolish the non-dom status once and for all, replacing it with a modern scheme for people genuinely in the country for a short period”.
It said the money raised would help fund new NHS appointments and free breakfast clubs in all primary schools – a policy Ms Reeves said this week would be rolled out from April.
But the Financial Times reported that Government officials had said Ms Reeves could change the policy if the numbers are not satisfactory. “We won’t press on regardless but we are not going to abandon this completely,” one said.
A Treasury spokesman told The Mirror: “These reports are speculation, not government policy. The independent Office for Budget Responsibility will certify the costings of all measures announced at the Budget in the usual way.”
They added: “We are committed to addressing unfairness in the tax system so we can raise the revenue to rebuild our public services. That is why we are removing the outdated non-dom tax regime and replacing it with a new internationally competitive residence-based regime focused on attracting the best talent and investment to the UK.”
In August, Keir Starmer pledged the government was “cracking down on non-doms”. In a speech where he warned the upcoming Budget would be “painful”, he said: “Those with the broadest shoulders should bear the heavier burden, and that’s why we’re cracking down on non-doms.”
