Statistics released by HMRC have shown the tax contribution by non-doms has gone up by around £250 million over the previous year despite their numbers falling.
It is estimated that non-domiciled tax payers paid £7,828 million in UK Income Tax, Capital Gains Tax and National Insurance contributions in 2018-19. This is a slight increase from the previous year’s estimate of £7,571 million.
In 2018-19, there were an estimated 78,000 individuals claiming non-domiciled taxpayer status in the UK on their Self-Assessment tax returns, slightly down from 78,700 in the previous year.
In the previous two years the estimated number of non-domiciled taxpayers has been falling due to these taxpayers either becoming domiciled or no longer paying tax in the UK. In 2018-19 the number of non-domiciled taxpayers changing status to become domiciled has slowed down.
Despite this fall in the number of non-doms in the UK, HMRC’s statistics found that in 2017-18 the cumulative value of investments in UK businesses on which Business Investment Relief was claimed is £4,018 million with £512 million of this invested in the UK from 300 non-domiciled taxpayers.
Tom Elliott, a partner and head of London private clients at accountancy firm Crowe, said the non-dom stats indicate that the impact of changes made in 2017 has now stabilised.
“Looking at year-on-year movement, the number of non-dom taxpayers declined slightly from 78,700 to around 78,000, while the amount collected across income tax, capital gains and national insurance contributions rose slightly to £7,828 million. The lack of significant fluctuations since the 2017 reforms shows that the UK remains a popular jurisdiction for mobile high net worth families.”
Rebecca Fisher, a partner in the private client team at Russell-Cooke, said that it remained to be seen what the long term outlook is for non-doms but “almost certainly recent events and unprecedented government spending will require funding.”
According to James Heathcote, a director at Lancaster Knox, the statistics show that the non-dom population “still contributes a hugely significant sum to the Exchequer through personal taxation and makes tangible investment in UK PLC” but BIR is “still poorly utilised” and if harnessed properly “could have a profound effect on the UK economy post COVID.”