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!
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?
Alan,
Suggest you watch ITN News at Ten which said Labour had scored a success over the Tories as Cameron started defending the rich. The Tories didn’t see this coming, not BBC.
Glad that UKIP quickly confirmed the sensible idea that you should not be able to inherit non dom staus. Nigel very fast to dodge this trap and come out with a sensible policy.
So are we doing bias itv now as well?
Sad to see how much those that want to preserve British culture are so keen to support those who are robbing the country.
Save us the faux outrage. What only upsets you is that you’d rather destroy our culture and give everything away.
He’s back in the fold again with the ‘we’.
And clearly gunning for hall monitor. Next he’ll be quoting house rules he’s made up for a site no one reads or pays attention to. Apparently.
40M+
Don’t think so….everyone I know is laughing long and hard at Labour’s cock up and muddle…even the BBC agrees it was a shambles….’the mother and father of all banana skins’….a policy that had gone ‘pear-shaped’.
Tax expert after tax expert, businessman after businessman, except Labour’s tame ‘independent’ one, are lining up to pour cold water on the policy.
If that’s a success what can we expect when they fail?….oh…been there, done that…2008.
According to Labour’s Newsnight the non-dom announcement has put some ‘fizz’. into the GE.
‘The Tories are in a tizz’ (caught on the wrong side of the argument?)…according the BBC. The Balls thing is a side issue.
Substantively the issue is a disaster for Britain and the lower paid tax-payer who will have to pick up the slack…not that the BBC will consider the fundamental issue.
As for Ed Balls’ claim about someone editing his comments – he should be challenged to prove that statement, by showing the original, then the doctored version, and then providing evidence of his accusations that it was doctored by his political opponents. Don’t bet on the BBC to follow that up, though, and Ed Balls will continue to be allowed by the BBC to put words and policies, unchallenged and without any foundation, into his opponents’ mouths whenever he likes in his interviews. It’s what the BBC does
And, in any event, wasn’t it the BBC’s Norman Smith who tracked back and discovered the clip from BBC Leeds ?
An excellent article Alan. More desperate irrational and damaging nonsense that passes for Labour Party policy.
The real world relevant comparative statistic which I find striking is the £8.2 Billion from non-doms, and the 10million ‘low income workers’. That pays for a big chunk of public services.
There is a genuine issue of qualification for non-dom status. And it’s complicated.
However, to BBC ongoing, tooth grinding, anger inducing bias.
Newsnight 8/4/15. I must confess, by 22.57 I had to switch off this tortuous Labour Party propaganda outfit, in favour of a snippet of FA Cup footy as I could stomach no more. Newsnight tonight unashamedly came out with a more organised Labour narrative on the non-dom issue. Chris Leslie was on for Labour. He could bore a corpse could Chris, he says so much nothing you want to agree with him so he would just shut up. He could have a Teflon coated brain – nothing coming out, nothing going in. The BBC News editorial team with helmsman Katz, Comrade Evan Davis and Allegra Stratton, ran a piece pretending that the Labour Party weren’t in desperate need of political babysitting BBC-style, having attempted to buy votes with a policy which would impoverish our nation which you (Alan) describe above. Unbelievable phraseology by Allegra Stratton to Ed Miliband when asking whether the policy should be enacted even if it meant a loss to the exchequer. The moral ambivalence of these spoilt, overpaid, deluded play-journalists is truly vomit inducing. And edited snippets of the chap Jolyon Maugham QC was shown, introducing him as ‘Tax Lawyer’, not ‘Labour Party Supporter’ or ‘minority voice’.
There is no pretence. BBC are actively promoting Labour. Actively suppressing the truth, perpetuating confusion and promoting envy. They are actively undermining UKIP (see the Clive Myre / Robin Bryant UKIP-bash verbal tennis played on loop on BBC News channel today). They are dismissive of the Lib Dems. In England they are eulogising the SNP on the ultimately content-less performance (and it was a performance) of Nicola Sturgeon last Thursday [perhaps our scottish friends are being given different narrative?]. They are hedging their bets with the Tories and yet again tonight on Newsnight we have Ken Clark, non-conservative social democrat wheeled out to give a centre left ‘defence’ for the former conservative party, feeding the BBC narrative of playing to the baser human instincts of greed, envy, spite and covetousness.
Anyway Alan. Good article.
It has become increasingly clear over recent months that Labour are relying on emotive headlines to get them by. Maybe starting with the energy freeze, and most recently this non-dom stuff, the strategy has been to come up with a cracking populist headline on some issue or other, just to get them noticed to maintain some relevancy.
Many times, these headline announcements have come to nothing. They have either been rubbished for what they are, or otherwise quietly forgotten.
The common feature is that in themselves they do not amount to a policy, there is no content behind them and there is no substance.
In his blog, Dan Hodges highlights a somewhat worrying lack of decision making ability which might explain why there is no policy, but the issue is that when you have MSM organisations such as the BBC behind you, the headline is all that matters. It is all very cynical really.
http://www.spectator.co.uk/features/9494602/ed-miliband-could-still-win-heres-what-would-happen-next/
One of the big differences between the coalition government and the previous administration is the lack of a constant stream of announcements of “initiatives” to solve every perceived problem by throwing money at it in the last five years. I will never forget visiting a head teacher pre 2010 and there neatly lined up on the shelf were loads of files with all the latest dictats from on high.
From what I am seeing presently is Labour seems like a child with ADHD – endless announcements involving control freakery of nearly every aspect of our lives, seemingly believing they have the answer to everything and just leave it to the nanny state to decide what is best for you – and don’t worry someone else will pay for it.
Rather reminiscent of the approach of M. Hollande in France, and look what has happened with those who were delegated to pay for the socialist nirvana promised. High taxes on nothing produced nothing and in a state where a huge proportion of GDP is government spending, the wheels are definitely coming off the wagon!