Non Doms

The number of individuals registered with HMRC as non-doms in the UK has fallen by 16% in the two years since the £30,000 annual levy was introduced, according to a Freedom of Information request by law and tax firm, McGrigors.

McGrigors says a significant contributory factor to the fall from 140,000 in 2007/08 to 118,000 in 2009/10 - is the annual £30,000 levy on non-domiciles (the Remittance Basis Charge).

Ray McCann, tax director at McGrigors and a former assistant director at HMRC, said: ‘A lot of the wealthiest non-domiciles are highly mobile. Many of them will have taken the £30,000 charge as a signal that they are no longer welcome in the UK.

‘There are significant tax changes coming in April including allowing non-doms to remit income to the UK to finance commercial investments tax free. These should give a much needed boost to the UK and is likely to be a sign that the Government is worried about the numbers.’

Only 4% of non-doms pay the charge and the number is falling - from 5,410 in 2008/09 to 5,100 in 2009/10. Tax collection levels from the charge fell 6% to £153m.

But HMRC said that whilst there has been a drop in 2008/09, ‘it would be misleading to assume that the charge is forcing people from the UK’.

It pointed to other likely factors, such as the recession which seriously affected the financial services sector in which many non-doms are employed. It adds that the figures for 2007/08 were unusually high, creating the impression that 2008/09 represented a drop from the ‘usual’ levels of the non-dom population.

It said that since 2008 there was a significant number of people who were no longer required to indicate their status on their tax return – those who chose not to be taxed on the remittance basis.

An HMRC spokesman said: ‘The UK non-dom population has been steadily growing over recent years from 83,000 in 1997/98. Whilst the figures did drop in 2008/09 this is likely to be as a result of the wider financial situation and economic slowdown.’

It also stressed that the figures include non-doms who were unaffected by the changes made in 2008 and the fact that people are only required to indicate their domicile status where it has a bearing on their UK tax liability.