'Come clean' on impact of non-dom tax status, Labour urges
Source link The Labour Party is calling for the government to come clean about the true impact of non-domicile tax status for citizens living in the UK.
Non-domiciled status has long been used by wealthy individuals to reduce the amount of UK tax they pay. These individuals remain liable to the UK for their worldwide income and capital gains, but can choose to be taxed on the remittance basis which requires them to pay only UK tax on income and gains they bring into the UK.
The Labour Party believes the government should carry out a comprehensive review of the effect that such exemptions have on tax revenues and the wider economy, and have asked the government to “come clean” by revealing the true cost to the public purse.
The opposition leader Jeremy Corbyn said that “the current system of non-dom status is too easy to exploit and deprives the British taxpayer of billions of pounds and it’s time the government published the real impact of these loopholes and come clean about the value for money they represent”.
The Institute for Fiscal Studies (IFS) estimates that the cost of non-doms to the UK Exchequer is between £4 billion and £7 billion per year. The think tank has also suggested that action should be taken to limit individuals’ ability to take advantage of the remittance basis and reduce what they pay in tax.
The Treasury declined to comment on the Labour’s demand for information, instead insisting that the government was “determined to build a fairer and simpler tax system in which those with the most pay their fair share.”
The Labour party has not revealed what form their review of the non-domicile tax status would take, but it is clear that they are pushing for greater transparency and action to ensure the system is not being exploited. It remains to be seen whether they can push the government to make the necessary changes.