Rachel Reeves issued £12bn warning over UK’s richest leaving the UK | Politics | News | EUROtoday

A brand new research claims Rachel Reeve’s crackdown on the non-dom tremendous wealthy dwelling within the UK may price the Treasury billions if millionaires search to flee Britain. The Telegraph reviews the Exchequer may lose £12.2 billion in tax income over the course of this parliament, based on new analysis from the Centre for Economics and Business Research (CEBR).

A so-called “non-dom” is the time period used to explain an individual whose everlasting residence, or domicile, is outdoors the UK. A non-dom beforehand solely paid UK tax on cash earned in Britain; they didn’t must pay the UK authorities tax on cash they made elsewhere on the earth, except that cash went right into a UK checking account. Non-dom refers to an individual’s tax standing, it doesn’t describe their nationality, citizenship or resident standing.

The Chancellor has torn up this earlier tax association, that means that now all UK residents will likely be taxed in Britain on their worldwide earnings and positive aspects.

It’s reported various very wealthy people have already ceased dwelling within the UK because of the brand new Labour guidelines. Billioniare property traders Ian and Richard Livingstone reportedly lately switched their major nation of residence from the UK to Monaco, based on Companies House. Richard Gnodde, the vice chairman of Goldman Sachs in Europe has additionally relocated from London to Milan, an Italian metropolis which gives tax breaks to the rich.

And the Adam Smith Institute mentioned the UK misplaced 10,800 millionaires to abroad nations in 2024, double the quantity in 2023.

Sam Miley, an economist on the CEBR, informed the Telegraph: “Our research highlights that the Treasury’s finances will be highly dependent upon the behaviour of former non-domiciled people. If a quarter of this group were to leave the UK in response to recent reforms, we predict that the Treasury will begin to make a loss.

“This loss could escalate into the billions if a larger share left. For every non-dom deciding to relocate, the Treasury will not only lose the tax revenue from their income and gains, but also from their day-to-day activities, with non-doms typically being high spenders as well as high earners.”

Andrew Griffith, the shadow enterprise secretary, mentioned: “Investors and wealth creators leaving the UK for brighter shores is nothing short of disastrous for our economy. It also means we will all have to pay higher taxes to make up the shortfall.”

A Treasury spokesman said: “We do not recognise these figures. The independent OBR has confirmed that the changes to the regime will raise £33.8bn over the next five years.

“Replacing the outdated non-dom tax regime with a new internationally competitive residence-based system addresses unfairness in our tax system, attracts the best talent and investment to the UK, and ensures everyone who is a long-term resident in the UK pays their taxes here.”